Privia Health Group Inc

Previous 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.

Current wording

• Net income attributable to Privia Health Group, Inc. was $3.5 million and $5.6 million, for the three months ended September 30, 2024 and 2023, respectively, and $10.0 million and$20.2 million for the nine months ended September 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 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.

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 64.7% and 58.8% of total revenue for the three months ended September 30, 2024 and 2023, respectively, and 65.4% and 57.9%for thenine months ended September 30, 2024 and 2023, respectively. FFS-administrative services revenue represented 7.0% and 7.2% of total revenue for the three months ended September 30, 2024 and 2023, respectively, and 7.2% and 6.9%for thenine months ended September 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 26.6% 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.

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 27.8% and 33.5% of total revenue for the three months ended September 30, 2024 and 2023, respectively, and 26.9% and 34.8%for thenine months ended September 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% 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.

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 September 30, 2024 and 2023, respectively, and 0.5% and 0.4% for thenine months ended September 30, 2024 and 2023, respectively.

Previous wording

During 2023, the Company entered four new markets through partnerships or affiliations with clinically integrated networks, health systems and independent group practices in Connecticut, Ohio, Washington state and South Carolina.

Current wording

During 2023, the Company entered four new markets through partnerships or affiliations with clinically integrated networks, health systems and independent group practices in Connecticut, Ohio, Washington state and South Carolina. In November 2024, the Company announced it had entered the state of Indiana in partnership with a multi-specialty practice.

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 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.

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 13.1% as of September 30, 2024 compared to September 30, 2023, due to organic growth in our healthcare delivery business as well as our entrances into the 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 10.7% 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.

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 14.0% as of September 30, 2024 compared to September 30, 2023, due to our entrance into the Washington state market, 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 83.3% 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,

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 82.5% and 77.3% of our practice collections for the three months ended September 30, 2024 and 2023, respectively, and 83.1% and 76.3% for the nine months ended September 30, 2024 and 2023, respectively. VBC accounted for 17.3% and 22.4% of Practice Collections for the three months ended September 30, 2024 and 2023, respectively, and 16.6% and 23.4% for the nine months ended September 30, 2024 and 2023, respectively.

Previous 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.

Current wording

Practice Collections increased 2.3% for the three months ended September 30, 2024 when compared to the same period in 2023 and 4.5% for the nine months ended September 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, 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 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.

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 10.2% for the three months ended September 30, 2024 when compared to the same period in 2023 due to organic growth of our medical practice business and increased 10.6% for the nine months ended September 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 23.2% for the three months ended September 30, 2024 from 22.1% for the same period in 2023 and increased to 23.2% for the nine months ended September 30, 2024, compared to 22.0% during the same period in 2023, due to renegotiated certain at-risk

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 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.

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 11.2% for the three months ended September 30, 2024 when compared to the same period in 2023 and increased 8.5% for the nine months ended September 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 47.5% 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.

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 49.6% for three months ended September 30, 2024 compared to 49.1% during the same period in 2023 primarily due to organic growth, and 48.1% for the nine months ended September 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 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.

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 25.8% for the three months ended September 30, 2024, when compared to the same period in 2023 and 19.3% for the nine months ended September 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 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.

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 23.3% for three months ended September 30, 2024 an increase from 20.4% for the same period in 2023 and 22.1% for the nine months ended September 30, 2024, an increase from 20.5% for the same period in 2023, due to organic growth of our medical practice business and new market entries.

Previous 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:

Current wording

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

Previous 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.

Current wording

Revenue was $437.9 million for the three months ended September 30, 2024, an increase from $417.3 million for the three months ended September 30, 2023. Key drivers of this revenue growth include: FFS–patient care revenue and FFS-administrative services, which increased $37.7 million and $0.9 million, primarily attributable to the addition of new providers and an increase in visit volume; shared savings revenue, which increased $13.9 million primarily due to more Attributed Lives in Medicare programs as well as continued strong performance in our value based care programs in the aggregate; and an increase in PMPM revenue of $3.3 million primarily due to growth in Attributed Lives. The decrease in capitated revenue of $(35.1) million during the three months ended September 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.

Previous wording

Revenue was $837.6 million for the six months ended June 30, 2024, an increase from $799.6 million for the same period in 2023. Key drivers of this revenue growth include an increase in FFS–patient care revenue and FFS-administrative services, which increased $91.8 million and $7.6 million, respectively, due to the addition of new providers and increase in visit volumes; and PMPM revenue, which increased $4.6 million primarily attributable to growth in Attributed Lives. The decrease in capitated revenue in 2024 of $(57.2) million due to the renegotiation of capitated arrangements for a more favorable contract structure which is now reflected on a net basis under shared shavings starting with the first quarter of 2024; and a decrease in shared savings revenue of $(9.5) 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.

Current wording

Revenue was $1.28 billion for the nine months ended September 30, 2024, an increase from $1.22 billion for the same period in 2023. Key drivers of this revenue growth include an increase in FFS–patient care revenue and FFS-administrative services, which increased $129.5 million and $8.5 million, respectively, due to the addition of new providers and an increase in visit volumes; PMPM revenue, which increased $7.9 million primarily attributable to growth in Attributed Lives; and shared savings revenue, which increased $4.4 million primarily related to more Attributed Lives in Medicare programs as well as continued strong performance in our value based care programs. The decrease in capitated revenue in 2024 of $(92.3) million due to the renegotiation of capitated arrangements for a more favorable contract structure which is now reflected on a net basis under shared shavings starting with the first quarter of 2024.

Previous 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.

Current wording

Provider expenses were $336.5 million for the three months ended September 30, 2024 compared to $325.2 million for the same period in 2023, and $979.4 million for the nine months ended September 30, 2024 compared to $949.2 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 $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.

Current wording

Cost of platform expenses were $56.1 million for the three months ended September 30, 2024 compared to $50.3 million for the same period in 2023. The increase was driven by an increase in salaries and benefits of $1.8 million related to continued growth during the three months ended September 30, 2024 compared to the same period in 2023, 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, and an increase in platform costs of $1.4 million, primarily related to an increase in Implemented Providers.

Previous wording

Cost of platform expenses were $111.2 million for the six months ended June 30, 2024 compared to $94.9 million for the same period in 2023. The increase was driven by an increase in salaries and benefits of $6.1 million related to continued growth during the six months ended June 30, 2024 compared to the same period in 2023, an increase in platform costs of $3.4 million primarily related to an increase in Implemented Providers, an increase of $3.3 million in stock-based compensation expense primarily related to an additional quarter of expense due to timing of the 2023 equity awards being granted during the second quarter of 2023 compared to 2024 equity awards being granted during the first quarter of 2024, and an increase of $1.7 million in professional services related to additional consulting services.

Current wording

Cost of platform expenses were $167.2 million for the nine months ended September 30, 2024 compared to $145.3 million for the same period in 2023. The increase was driven by an increase in salaries and benefits of $8.0 million related to continued growth during the nine months ended September 30, 2024 compared to the same period in 2023, an increase in platform costs of $4.8 million primarily related to an increase in Implemented Providers, an increase of $4.8 million in stock-based compensation expense primarily related to an additional quarter of expense due to timing of the 2023 equity awards being granted during the second quarter of 2023 compared to 2024 equity awards being granted during the first quarter of 2024, an increase of $2.5 million in professional services related to additional consulting services.

Previous 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.

Current wording

Sales and marketing expenses were $7.0 million for the three months ended September 30, 2024 compared to $7.2 million for the same period in 2023. The decrease was primarily driven by various de minimis expenses during the three months ended September 30, 2024 compared to the same period in 2023.

Previous wording

Sales and marketing expenses were $12.9 million for the six months ended June 30, 2024 compared to $11.2 million for the same period in 2023. The increase was driven primarily by an increase in salaries and benefits of $1.2 million.

Current wording

Sales and marketing expenses were $20.0 million for the nine months ended September 30, 2024 compared to $18.5 million for the same period in 2023. The increase was driven primarily by an increase in salaries and benefits of $1.0 million.

Previous 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.

Current wording

General and administrative expenses were $30.7 million for the three months ended September 30, 2024 compared to $27.2 million for the same period in 2023. The increase was driven by the increase of $2.4 million in stock-based compensation expense, which is primarily attributed an increase in stock-based awards granted in 2024 compared to 2023.

Previous wording

General and administrative expenses were $61.0 million for the six months ended June 30, 2024 compared to $52.8 million for the same period in 2023. The increase was driven by the increase of $7.6 million in stock-based compensation expense which is primarily related to an additional quarter of expense due to timing of the 2023 equity awards being granted during the second quarter of 2023 compared to 2024 equity awards being granted during the first quarter of 2024.

Current wording

General and administrative expenses were $91.7 million for the nine months ended September 30, 2024 compared to $80.0 million for the same period in 2023. The increase was driven by the increase of $10.0 million in stock-based compensation expense, which is primarily related to an additional quarter of expense due to timing of the 2023 equity awards being granted during the second quarter of 2023 compared to 2024 equity awards being granted during the first quarter of 2024.

Previous 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.

Current wording

Depreciation and amortization expenses were $1.8 million for the three months ended September 30, 2024 compared to $1.7 million for the same period in 2023, and $5.4 million for the nine months ended September 30, 2024 compared to $4.8 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 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.

Current wording

Interest income was a net interest income amount of $2.2 million for the three months ended September 30, 2024 compared to $2.9 million for the same period in 2023 and $8.1 million for the nine months ended September 30, 2024 compared to $5.5 million for the same period in 2023. Interest income is primarily based on the cash balance held in interest bearing accounts.

Previous 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.

Current wording

The provision for income taxes was $4.0 million for the three months ended September 30, 2024, compared to the provision for income taxes of $2.5 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 unit vesting events.

Previous wording

The provision for income taxes was $4.2 million for the six months ended June 30, 2024, an increase from the provision for income taxes of $3.6 million for the same period in 2023. The provision for income taxes for the six months ended June 30, 2024 is primarily the result of pre-tax income offset by non-deductible stock-based compensation expense related to the vesting terms of options in connection with the Company’s IPO and its impact on the annualized effective tax rate applied to the six months ended June 30, 2024. The provision for income taxes for the six months ended June 30, 2023 is primarily the result of the pre-tax income offset by the non-deductible stock-based compensation expense related to the vesting terms of options in connection with the Company’s IPO and its impact on the annualized effective tax rate applied to the six months ended June 30, 2023.

Current wording

The provision for income taxes was $8.2 million for the nine months ended September 30, 2024, an increase from the provision for income taxes of $6.0 million for the same period in 2023. The provision for income taxes for the nine months ended September 30, 2024 is primarily the result of pre-tax income offset by non-deductible stock-based compensation expense and its impact on the annualized effective tax rate applied to the nine months ended September 30, 2024. The provision for income taxes for the nine months ended September 30, 2023 was driven by the changes in 162(m) limitations, state provision and excess tax benefits from windfalls.

Previous 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.

Current wording

Net income attributable to non-controlling interest was $1.7 million for the nine months ended September 30, 2024 an increase compared to a (loss) of $(1.5) million during the same period in 2023. The change is primarily related to the ramp up of new markets entered and repurchase of non-controlling interests 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 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.

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 September 30, 2024, we had cash and cash equivalents of $422.0 million. Our cash and cash equivalents primarily consist of highly liquid investments in money market funds and cash.

Previous 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:

Current wording

Net cash provided by operating activities was $34.5 million for the nine months ended September 30, 2024, compared to cash provided by operating activities of $16.7 million for the same period in 2023. Significant changes impacting net cash provided by operating activities for the nine months ended September 30, 2024 compared to net cash provided by operating activities for the same period in 2023 were as follows:

Previous 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.

Current wording

•An increase of $85.2 million in provider liability for the nine months ended September 30, 2024 compared to an increase of $123.9 million during the same period in 2023, a difference of $(38.7) million. The change is primarily due to a decrease in provider expense related to renegotiation of at-risk capitated arrangements during the nine months ended September 30, 2024.

Previous 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.

Current wording

•A decrease of $(118.2) million in accounts receivable, for the nine months ended September 30, 2024 compared to the same period in 2023 of $(156.2) million, a difference of $38.0 million. The change is primarily driven by the renegotiation of at-risk capitated arrangements during the nine months ended September 30, 2024.

Previous 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.

Current wording

•A decrease in net income of $(7.0) million compared to the same period in 2023. Net income was $11.7 million for the nine months ended September 30, 2024 compared to income of $18.7 million for the same period in 2023, primarily driven by the increase in stock-based compensation expense during the nine months ended September 30, 2024 when compared to the same period in 2023.

Previous 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.

Current wording

Net cash used in investing activities was $5.7 million for the nine months ended September 30, 2024 compared to $37.9 million during the same period in 2023, primarily due to Privia’s investments in new markets during the first and third quarters of 2023.

Previous 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.

Current wording

Net cash provided by financing activities was $3.7 million for the nine months ended September 30, 2024, compared to net cash provided of $3.7 million for financing activities for the same period in 2023. The activity primarily consisted of a decrease in proceeds from stock options exercised during the nine months ended September 30, 2024 compared to the same period in 2023 offset by the repurchase of a non-controlling interest 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 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.

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$0.7 million for both the three months ended September 30, 2024 and 2023, and$2.1 million and $2.0 million for the nine months ended September 30, 2024 and 2023, respectively.