Privia Health Group, Inc.

Notes to Consolidated Financial Statements

1. Organization and Summary of Significant Accounting Policies

Organization

Privia Health Group, Inc. (“Privia Health”, “Privia”, “we”, “our” or the “Company”) is a technology-driven, national physician-enablement company that collaborates with physician practices, health plans, and health systems to achieve the quadruple aim of better outcomes, lower costs, improved patient experience, and greater provider engagement and satisfaction. The Company pursues the quadruple aim by entering markets and organizing existing physicians and non-physician clinicians into a unique practice model that combines the advantages of a partnership in a large regional medical group (each, a “Medical Group”) with significant provider autonomy for physicians (collectively, “Privia Physicians”) and non-physician clinicians (collectively, “Privia Clinicians” and, together with the Privia Physicians, the “Privia Providers”) joining the Company’s Medical Groups.

As of December 31, 2025, Privia operated insixteen markets: 1) the Mid-Atlantic Region (states of Virginia, Maryland and the District of Columbia); 2) Georgia; 3) Gulf Coast Region (Houston-San Antonio-Austin, Texas); 4) North Texas (Dallas/Fort Worth, Texas); 5) West Texas (Abilene, Texas); 6) Florida; 7) Tennessee 8) California; 9) Montana; 10) Ohio; 11) North Carolina; 12) Connecticut; 13) Washington state; 14) South Carolina; 15) Indiana; and 16) Arizona.

Under our Privia Medical Group model, Privia Physicians join the Medical Group in their geographic market as an owner of the Medical Group. We own a majority interest in certain of our Medical Groups (each, an “Owned Medical Group”), with Privia Physicians collectively owning a minority interest, and we own no interest in certain other Medical Groups for which we provide services through a management agreement (each, a “Non-Owned Medical Group”). In those markets in which state regulations prohibit us from owning Medical Groups, the Non-Owned Medical Groups may be owned by the Privia Physicians or owned indirectly through a professional entity (a “Nominee PC”) by a licensed physician holding a Privia leadership position (such physician leader, a “Nominee Physician”, and each such Non-Owned Medical Group owned in this manner, a “Friendly Medical Group”). In those markets where we partner with health systems, our health system partner owns a majority interest in the Non-Owned Medical Groups, with Privia Physicians owning a minority interest. Privia Physicians furnish healthcare services through our Medical Groups and continue to own their historical practice entities (“Affiliated Practices”), which provide certain services to the Medical Groups, such as use of space, non-physician staffing, equipment and supplies. Privia Physicians typically enter into a physician member services agreement (“PMSA”) with a medical group, which requires the Privia Physician to provide healthcare services through and on behalf of the medical group, and the Medical Group enters into a Support Services Agreement (“SSA”) with the Affiliated Practice to provide those certain services to the Medical Group.

In some instances, we also move into and expand in new and existing markets through our Privia Care Partners model, which offers an affiliation model to providers who are looking solely for value-based care (“VBC”) solutions. For those practices, we furnish population health services, reporting and analytics, in addition to certain management services.

The Company does not own any Affiliated Practice, and does not bear risk of loss related to the Affiliated Practices which are typically owned by certain Privia Physicians. As of the reporting date, the Company has Friendly Medical Groups in Tennessee, West Texas, Washington state, South Carolina and Indiana. The Company has entered into a restriction agreement with each of its Nominee Physicians and their respective Nominee PCs, which grant the Company, among other rights, the ability to direct the transfer of each Nominee PC’s ownership rights in the Friendly Medical Groups to other licensed physicians. We consolidate Owned Medical Groups and Friendly Medical Groups into our financial statements, while we do not consolidate Non-Owned Medical Groups. For further information on Non-Owned Medical Groups and Friendly Medical Groups, please refer to “Variable Interest Entities”.

The Company also provides management services through local management services organizations (each, an “MSO”) to the Medical Groups through a Management Services Agreement (“MSA”) in each market. The Company owns 100% of all MSOs, except seven where the Company holds a majority ownership interest.

We derive our revenues from the following three principal sources: (i) FFS-patient care revenue from the provision of healthcare services to patients through Privia Providers of Owned Medical Groups and Friendly Medical Groups, in addition to management and administrative services earned for administrative services provided to Non-Owned Medical Groups (“FFS-administrative services”), (ii) VBC revenue collected on behalf of our Privia Providers in the form of (a) capitated revenue and (b) management and administrative fees, which primarily consist of shared savings, including quality bonuses, and per member per month (“PMPM”) care management fees, as well as (iii) other revenue from additional services offered to Privia Providers or directly to patients or employers, including ancillary services such as clinical lab, pharmacy and imaging services. The operations of our Owned Medical Groups, owned Accountable Care Organizations (“ACO”), owned MSOs and Friendly Medical Groups are reflected within our consolidated financial results.

Basis of Presentation

The consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its subsidiaries. Amounts shown on the consolidated statements of operations within the operating expense categories of provider expense, cost of platform, selling and marketing, and general and administrative are recorded exclusive of depreciation and amortization.

All significant intercompany transactions are eliminated in consolidation.

Variable Interest Entities

Management evaluates the Company’s ownership, contractual, and other interests to determine if the Company holds a variable interest in a variable interest entity (“VIE”). These evaluations are complex, involve judgment, including the use of estimates and assumptions based on available historical information, among other factors. If the Company determines that an entity in which it holds a contractual or ownership interest is a VIE and that the Company is the primary beneficiary, the Company consolidates such entity in its consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Management periodically reassesses whether changes in the facts and circumstances regarding the Company’s involvement with a VIE, or other arrangements, result in a change to the consolidation conclusion. Any such changes in consolidation status are applied prospectively.

The Company evaluates its relationship with (a) Non-Owned Medical Groups and their Affiliated Practices, (b) Friendly Medical Groups and their Affiliated Practices, (c) Affiliated Practices associated with Owned Medical Groups and (d) Owned Medical Groups it forms or acquires, to determine if any of these entities should be consolidated into the Company’s financial statements. The Company does not have an ownership interest in any Affiliated Practices (whether those of Owned Medical Groups, Non-Owned Medical Groups or Friendly Medical Groups); nor does the Company have an ownership interest in Non-Owned Medical Groups or Friendly Medical Groups. The PMSA and SSA entered into by Non-Owned Medical Groups and Friendly Medical Groups with their Privia Physician members and the Affiliated Practices are not contractual relationships within Privia’s legal structure. The only contractual relationship between Privia and Non-Owned Medical Groups is established through the MSA. For Friendly Medical Groups, in addition to the MSA, the Company has a contractual relationship, evidenced by a restriction agreement (each a “Restriction Agreement”) with its Nominee Physicians and their respective Nominee PCs. Management has determined, based on the provisions of the MSAs between the Company and Non-Owned Medical Groups, and after considering the requirements of Accounting Standards Codification (“ASC”) Topic 810, Consolidation (“ASC 810”), that the Company is not required to consolidate the financial position or results of operations of (i) Affiliated Practices associated with Owned Medical Groups; (ii) Non-Owned Medical Groups or, (iii) Affiliated Practices of a Non-Owned Medical Group. However, management has determined, based on the provisions of the Restriction Agreement by and among the Company, the Nominee Physicians and their respective Nominee PCs, the governing documents of the Friendly Medical Groups, and after considering the requirements of ASC 810, that the Company should consolidate the financial position and results of operations of the Friendly Medical Groups and the Nominee PCs, but not the Affiliated Practices of the Friendly Medical Groups.

ASC 810 requires the Company to consolidate the financial position, results of operations and cash flows of a Non-Owned Medical Group affiliated by means of a service agreement if the Non-Owned Medical Group is a VIE and the Company is its primary beneficiary. A Non-Owned Medical Group would be considered a VIE if (a) it is thinly capitalized (i.e., the equity is not sufficient to fund the Non-Owned Medical Group’s activities without additional subordinated financial support) or (b) the equity holders of the Non-Owned Medical Group as a group have one of the following four characteristics: (i) lack the power to direct the activities that most significantly affect the Non-Owned Medical Group’s economic performance, (ii) possess non-substantive voting rights, (iii) lack the obligation to absorb the Non-Owned Medical Group’s expected losses, or (iv) lack the right to receive the Non-Owned Medical Group’s expected residual returns.

The characteristics of both (a) and (b) do not exist and as such the Non-Owned Medical Groups do not represent VIEs. Accordingly, the Company has not consolidated the financial position, results of operations or cash flows of the Non-Owned Medical Groups that are affiliated with the Company by means of a service agreement for the years ended December 31, 2025, 2024, and 2023. Each time the Company enters into a new service agreement, or enters into a material amendment to an existing service agreement, with a Medical Group, the Company considers whether the terms of that agreement or amendment would change the elements it considers in accordance with the VIE guidance. Management performed this analysis for Affiliated Practices of Owned Medical Groups, which have contractual relationships with Privia through the SSA, and determined these entities do not represent VIEs pursuant to ASC 810 criteria and therefore are not consolidated.

The Company, however, does meet the criteria for consolidation of the Owned Medical Groups, Nominee PCs and the Friendly Medical Groups based on ASC 810 criteria.

Privia Medical Group – West Texas, PLLC, (“PMG West Texas”) is a physician-owned Medical Group, with PMG West Texas Holdings, PLLC (“Friendly WTX PC”), a Texas professional limited liability company wholly owned by a Nominee Physician, owning majority membership interests and having governance and control rights via the governing documents of PMG West Texas. The Company has a contractual relationship with Friendly WTX PC through a Restriction Agreement. The VIE analysis was performed, and the Company determined that characteristic (b) exists as a result of meeting (i), (ii) and (iv) and, as such, PMG West Texas and Friendly WTX PC do represent VIEs and are consolidated as they do meet the criteria in ASC 810.

Privia Medical Group Tennessee, PLLC (“PMG-TN”) is a physician-owned Medical Group, with PMG-TN Physicians, PLLC (“Friendly TN PC”), a Tennessee professional limited liability company wholly owned by a Nominee Physician, owning majority membership interests therein and having governance and control rights via the governing documents of PMG-TN. Again, the same analysis was performed, and the Company determined that characteristic (b) exists as a result of meeting (i), (ii) and (iv) and, as such, PMG-TN and Friendly TN PC do represent VIEs as they do meet the criteria in ASC 810.

Privia Medical Group Washington, PLLC, (“PMG WA”) is a physician-owned Medical Group, with PMG Washington Holdings, PLLC (“Friendly WA PC”), a Washington professional limited liability company wholly owned by a Nominee Physician, owning majority membership interests and having governance and control rights via the governing documents of PMG WA. The Company has a contractual relationship with Friendly WA PC through a Restriction Agreement. The VIE analysis was performed, and the Company determined that characteristic (b) exists as a result of meeting (i), (ii) and (iv) and, as such, PMG WA and Friendly WA PC do represent VIEs and are consolidated as they do meet the criteria in ASC 810.

Privia Medical Group South Carolina, LLC, (“PMG SC”) is a physician-owned Medical Group, with PMG South Carolina Holdings, PLLC (“Friendly SC PC”), a South Carolina professional limited liability company wholly owned by a Nominee Physician, owning majority membership interests and having governance and control rights via the governing documents of PMG SC. The Company has a contractual relationship with Friendly SC PC through a Restriction Agreement. The VIE analysis was performed, and the Company determined that characteristic (b) exists as a result of meeting (i), (ii) and (iv) and, as such, PMG SC and Friendly SC PC represent VIEs and are consolidated as they meet the criteria in ASC 810.

Privia Medical Group Indiana, LLC, (“PMG IN”) is a physician-owned Medical Group, with PMG Holdings Indiana, LLC, (“Friendly IN PC”), an Indiana professional limited liability company wholly owned by a Nominee Physician, owning majority membership interests and having governance and control rights via the governing documents of PMG IN. The Company has a contractual relationship with Friendly IN PC through a Restriction Agreement. The VIE analysis was performed, and the Company determined that characteristic (b) exists as a result of meeting (i), (ii) and (iv) and, as such, PMG IN and Friendly IN PC represent VIEs and are consolidated as they meet the criteria in ASC 810.

Privia Medical Group Arizona, PLLC ("PMG-AZ") is an Owned Medical Group, with the Company owning a majority of the membership interests and having governance and control rights through the governing documents of PMG-AZ. The VIE analysis was performed, and the Company determined that characteristic (a) exists, and, as such, PMG-AZ does represent a VIE and is consolidated as it does meet the criteria in ASC 810.

The aggregated carrying value of the VIE assets and liabilities included in the consolidated balance sheets after elimination of intercompany transactions and balances each were $18.9 million and $12.1 million as of December 31, 2025 and 2024, respectively. Total revenues and operating expenses were each $215.5 million, $104.5 million, and $61.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. On an on-going basis, management evaluates its significant estimates and assumptions, including, but not limited to, revenue recognition, stock-based compensation, estimated useful lives of assets, intangible assets subject to amortization, the fair value of assets acquired and liabilities assumed in business combinations, and the provision for income taxes. These estimates are based on historical experience, current conditions, and other assumptions that management believes are reasonable under the circumstances. Actual results could differ from those estimates. Estimates and assumptions are reviewed and updated as new information becomes available, additional experience is gained, future events occur, or the Company’s operating environment changes.

Operating Segments

In accordance with ASC 280, Segment Reporting (“ASC 280”) the Company has determined that it operates in a single operating segment, and accordingly, reportsone reportable segment – Privia Health Group, Inc. Refer to Note 16. “Segment Financial Information” for additional information regarding the Company’s services.

Cash and Cash Equivalents

The Company considers all unrestricted, liquid financial instruments purchased with original maturity dates of three months or less to be cash equivalents. Cash equivalents are stated at cost which approximates fair value.

Accounts Receivable

Substantially all of the Company’s accounts receivable arise from the provision of health care services to patients, the costs of which are primarily paid by federal and state governmental authorities or commercial insurance companies. Accounts receivable are recorded at the amount of consideration the Company expects to receive in exchange for providing healthcare services to patients, which is estimated using historical reimbursement rates and management’s analysis of prior collection experience, including expected contractual and other adjustments.

Accounts receivable are written off when they are deemed uncollectible due to circumstances that affect the ability of third-party payers or self-pay patients to remit payments. While write-offs have historically been within management’s expectations and the related allowances established, future write-offs may differ from historical experience, and could result in material differences between actual results and the Company’s recorded allowances.

Unearned Revenue

The Company records unearned revenue, which is a contract liability, when payment is received prior to the Company’s obligated performance of the related services.

Property and Equipment, Net

Property and equipment consist of furniture and fixtures, leasehold improvements, and computer hardware and software. Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is recognized using the straight-line method over the estimated useful lives of the related assets. The estimated useful life of leasehold improvements is the lesser of the lease term or useful life of the asset, while other property and equipment are depreciated over estimated useful lives, generally ranging from three toseven years.

Business Combinations

Accounting for business combinations requires the allocation of the fair value of the purchase consideration to the identifiable tangible and intangible assets acquired, and liabilities assumed based on their estimated fair values, which are determined primarily using income-based valuation methods. The excess of the fair value of the purchase consideration over the fair values of these identifiable net assets acquired is recorded as goodwill. These valuations require the use of significant estimates and assumptions, particularly with respect to intangible assets. Significant assumptions used in valuing intangible assets include, but are not limited to, projected revenue growth rates and attrition, medical claims expense, cost of care, operating expenses, discount rates, contract terms and the estimated useful lives of the acquired assets.

The Company’s estimates of fair value are based on assumptions management believes to be reasonable; however, such assumptions are inherently uncertain and unpredictable and, as a result, actual results may differ from those estimates. The allocation of purchase consideration to identifiable assets acquired and liabilities assumed affects the Company’s amortization expense, as acquired finite-lived intangible assets are amortized over their estimated useful lives. Indefinite-lived intangible assets, including goodwill, are not amortized. During the measurement period, which does not exceed one year from the acquisition date, the Company may record adjustments to the amounts initially recorded with a corresponding offset to goodwill. Upon conclusion of the measurement period, any subsequent adjustments are recognized in earnings.

During the years ended December 31, 2025, and 2024, the Company completed several acquisitions to strengthen its market position in existing markets and to expand into new markets. The consideration paid in each acquisition was determined through arm’s-length negotiations. Each acquisition was accounted for using the acquisition method pursuant to the requirements of Financial Accounting Standards Board (“FASB”) ASC Topic 805, Business Combinations(“ASC 805”). The results of operations of the acquisitions have been included in the Company’s consolidated financial statements since their respective acquisition date. For additional information, refer to Note 3. “Business Combinations.”

Impairment of Long-Lived Assets

Long-lived assets consist of property and equipment. Long-lived assets to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. Factors considered in determining whether an impairment review is required include significant underperformance in relation to expectations, adverse industry or economic trends and significant changes or planned changes in the manner in which the assets are used. If an impairment review is performed, the Company assesses recoverability by comparing the carrying value of the long-lived asset group to the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the long-lived asset group. If the carrying amount exceeds the undiscounted future cash flows, an impairment loss is recognized. The impairment loss is based on the excess of the carrying value of the impaired asset group over its fair value, determined using discounted cash flows. The Company did not record any impairment losses on long-lived assets during the years ended December 31, 2025, 2024, or 2023.

Goodwill

Goodwill represents the excess of the purchase price, plus the fair value of any non-controlling interests in the acquiree, over the fair value of identifiable net assets acquired. The Company performs a qualitative assessment on goodwill at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. If the qualitative assessment indicates that the fair value of a reporting unit is more likely than not below its carrying amount, the Company performs a quantitative impairment test. The quantitative goodwill impairment test compares the fair value of the reporting unit with its carrying amount. Any excess of the carrying value over the fair value is recognized as an impairment loss, limited to the total amount of goodwill allocated to that reporting unit. The Company has a single reporting unit and accordingly performs a single assessment of goodwill.

For the years ended December 31, 2025, 2024, and 2023, there was no impairment loss related to goodwill. For additional information, refer to Note 4. “Goodwill and Intangible Assets, Net.”

Intangible Assets, net

Definite-lived intangible assets represent the estimated fair value of identifiable intangible assets acquired. These assets are amortized using the straight-line method over their estimated useful lives as follows:

The Company evaluates its finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is assessed by comparing the carrying amount of the asset to the sum of the undiscounted future cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount exceeds the undiscounted future cash flows, the asset is written down to its fair value, which is determined based on estimated discounted future cash flows. In performing this assessment, management considers, among other factors, current operating results, forecast, the manner in which the intangible assets are used, and the effects of obsolescence, demand, competition, and other economic factors. Based on these assessments, no impairment loss was recorded for the years ended December 31, 2025, 2024, and 2023. For additional information, refer to Note 4. “Goodwill and Intangible Assets, Net.”

Debt Issuance Costs

Debt issuance costs represent costs incurred in connection with the issuance of debt. When debt is outstanding, these costs are recorded as a direct reduction of the related debt. When no debt is outstanding, debt issuance costs are recorded as an asset. Debt issuance costs are amortized over the term of the arrangement using the effective interest method and included in interest expense in the accompanying consolidated statements of operations.

Revenue Recognition

The Company derives revenues from the following three sources: (i) FFS revenue, (ii) VBC revenue and (iii) other revenue from additional services offered by Privia to its Privia Providers or directly to patients or employers. To determine revenue recognition for arrangements that are within the scope of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company applies the following five-step model:

i. Identify the contract(s) with a customer;

ii. Identify the performance obligations in the contract;

iii. Determine the transaction price;

iv. Allocate the transaction price to the performance obligations in the contract; and

v. Recognize revenue as the entity satisfies a performance obligation.

FFS Revenue

FFS-patient care

The Company’s FFS-patient care revenue is primarily generated from the provision of healthcare services to patients. The provision of medical services represents a single performance obligation under the Company’s third-party payer arrangements, and accordingly, the transaction price is allocated entirely to that performance obligation. Revenue is recognized as services are rendered and approved by Privia Providers, which typically occurs on the same day the services are provided. Payment for services are received from third-party payers and, in certain cases, from patients who are insured but are financially responsible for a portion of the services through co-payments, coinsurance, or deductibles. Patients without health insurance are generally required to pay for services in full.

FFS-patient care revenue is reported net of contractual allowances from third-party payers and patients. The Company has certain agreements with third-party payers that provide for reimbursement at amounts different from the Company’s standard billing rates. The differences between the estimated reimbursement rates and the standard billing rates are recorded as contractual adjustments, and are deducted from gross revenue to arrive at FFS-patient care revenue. The Company estimates implicit price concessions based on historical collection experience by patient class using a portfolio approach as a practical expedient rather than estimating individually.

The financial statement effects of applying this practical expedient are not materially different from those that would result from an individual contract approach. Subsequent changes in estimates of the transaction price including those determined on a portfolio basis when applicable are generally recorded as adjustments to revenue in the period in which the change occurs. For the years ended December 31, 2025, 2024, and 2023, changes in the Company’s estimates of implicit price concessions, contractual adjustments, and expected payments for performance obligations satisfied in prior periods were not significant.

With respect to fee-for-service (“FFS”) patient care revenue generated by Owned Medical Groups and Friendly Medical Groups, the Company evaluated whether it acts as a principal or an agent under ASC 606, given that healthcare services are furnished by Privia Providers rather than employees of the Medical Groups. ASC 606-10-55-37A states that an entity is a principal if it obtains control of a right to a service to be performed by another party, which provides the entity with the ability to direct that party to perform the service on the entity’s behalf. The Owned Medical Groups, which are majority-owned and controlled by the Company, own the contractual relationships with the patients and the third-party payers, and they direct Privia Providers to perform healthcare services on the Company’s behalf. Although the Company is prohibited by law from interfering in the physician-patient relationship or making clinical care decisions, the Company’s Owned Medical Groups are responsible for the fulfillment of healthcare services to patients. Further, the Company employs Chief Medical Officers and Medical Directors who provide clinical oversight and direction over the clinical affairs of the Owned Medical Groups. Owned Medical Groups provide the care coordination activities, patient outreach and education activities, and set quality standards for Privia Providers. The Company verifies that Privia Providers have the proper qualifications (e.g., correct licenses, certificates, etc.) for the Company’s Owned Medical Groups, for the Company and as a delegate on behalf of certain third-party payers. In addition to overseeing health care services, Owned Medical Groups are primarily responsible for delivering services to patients and retain discretion in establishing pricing through agreements with patients and their insurance payers. The Owned Medical Groups also negotiate and enter into provider agreements with third-party payer insurance companies, which define the respective obligations of Owned Medical Groups and the third-party payers including reimbursement rates for all services provided.

In assessing who is the principal in providing the patient care services, the Company considered who controls the provision of patient care services. Based on the Company’s oversight of Owned Medical Groups (including setting the expectations for the Owned Medical Group’s patients and the commercial payers’ expectations of the Owned Medical Groups) and the contractual relationships with patients and their third-party payers, the Company concluded it is the principal in these arrangements.

FFS-administrative services

The Company’s FFS-administrative services business provides administration and management services pursuant to MSAs with Non-Owned Medical Groups. The MSAs with the Non-Owned Medical Groups range from 5 –20 years in duration and outline the terms and conditions of the administration and management services to be provided, including revenue cycle management services such as billings and collections, as well as other services, including, but not limited to, payer contracting, information technology services, accounting and treasury services.

Under certain MSAs, the Company is compensated for administrative services equal to the cost of providing specified services, including a fixed margin, if applicable. While the margin is fixed, the cost of providing services may fluctuate over the life of the contract. In other MSAs, the Company is paid a fixed percentage of net collections though the net collections may vary over time.

Each MSA constitutes a single performance obligation to provide a series of administration and management services over the contract period. The Company has determined that each Non-Owned Medical Group receives the services daily and has concluded that an output method is appropriate for recognizing administrative services fee revenue.

Administrative fee revenue is reported at the amount that reflects the consideration to which the Company expects to be entitled in exchange for the provision of administration and management services to the Non-Owned Medical Groups. Certain MSAs include provisions for rebates to customers if specified conditions are met. The Company estimates the transaction price for such variable consideration using the most likely amount method and includes these amounts in the net transaction price to the extent that it is probable that a significant reversal will not occur when the uncertainty is resolved. FFS-administrative services revenue is reduced by the amount of any rebates earned by customers. Rebates of $3.5 million, $1.8 million, and $2.7 million were recorded for the years ended December 31, 2025, 2024, and 2023, respectively.

VBC Revenue

The Company’s VBC business consists of its clinically integrated networks and ACOs which bring together independent physician practices within the Company medical groups to share data, improve care coordination, and collaborate on initiatives designed to improve outcomes and reduce healthcare spending. The Company has multi-year contracts with the U.S. federal government and large payer organizations typically ranging from three tofive years. Payments under these contracts are made in the following forms: (1) capitated revenue, (2) shared savings, and (3) care management fees on a per member per month basis.

Capitated Revenue

Capitated revenue represents fees earned under contracts with various Medicare Advantage payers (“Payers”) in at-risk capitation arrangements. Under these arrangements, the Company is entitled to monthly fees for the provision of a defined range of healthcare services for Medicare Advantage health plan members (“attributed beneficiaries” or “attributed lives”) assigned to the Company’s contracted physicians, typically primary care providers. Monthly fees are calculated as a percentage of the premium Payers receive from the Centers for Medicare & Medicaid Services (“CMS”) for these attributed beneficiaries. In at-risk arrangements, the Company generally accepts financial risk for beneficiaries attributed to its contracted physicians and, is responsible for the cost of contracted healthcare services required by those beneficiaries in accordance with the terms of the agreement. Fees are recorded gross in revenue because the Company is acting as a principal in coordinating and controlling the range of services provided (other than clinical decisions) under its capitation contracts. Capitated contracts are generally multi-year arrangements and contain a single performance obligation representing the stand-ready obligation to provide all necessary medical care to members over the contract period. Revenue is recognized in the month during which each eligible beneficiary is entitled to receive healthcare benefits.

The capitation contract transaction price is a fixed percentage of premium per attributed life subject to periodic adjustment under CMS’s risk adjustment payment methodology. CMS determines premiums based on each attributed life’s health status and certain demographic factors, using diagnosis data submitted by both the Company and healthcare providers. The Company estimates adjustments to capitated revenue using the most likely amount methodology and includes in revenue only to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. Capitated revenue is also subject to adjustments for incentives or penalties tied to the achievement of quality metrics defined in the Company’s contracts. Incentive revenue is recognized using the most likely amount methodology and only to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.

Neither the Company nor any of its affiliates are a registered insurance company, as state law in the states in which the Company operates do not require such registration for risk bearing providers.

Shared Savings

Under shared savings arrangements, the Company may earn financial incentives for increasing accountability over the cost, quality and efficiency of the care provided to attributed members. Incentive payments are earned when, for a given twelve-month measurement period, the Company meets or exceeds quality and utilization standards established by the payer and achieves savings on medical costs for the population of attributed members. To determine the amount of shared savings payments, payers evaluate the Company’s performance during the measurement period using agreed-upon benchmarks, metrics and performance criteria.

The Company estimates the transaction price by analyzing performance during the relevant time period in connection with the contractually defined benchmarks, metrics, performance criteria, inflation trends, risk adjustment factors, attribution criteria and other factors. Revenue is recognized only when the price can be reasonably estimated and it is probable that a significant reversal will not occur once any uncertainty associated with the variable consideration is subsequently resolved. Shared savings revenue is recorded in the period under which the underlying services are provided during the pre-set twelve-month measurement period.

Care management

Under PMPM arrangements, the Company is paid a per member per month rate for each covered individual attributed by the payer to the Company (“attributed members”). Revenue is recognized in the month for which the PMPM rate applies and for which the member was attributed. The PMPM rate is based on a predetermined monthly contractual rate for each attributed member regardless of the volume of care coordination services provided under the contracts with the payers. The PMPM rate varies based on payer and product. Contingent PMPM amounts are not recognized into revenue until such contingency is resolved.

Revenue is reported at the amount that reflects the consideration to which the Company expects to be entitled in exchange for the provision of care coordination services to its population of attributed members. The Company’s contracts with payers have a single performance obligation that consists of a series of services for the provision of care coordination services for the population of attributed members for the duration of the contract. The transaction price for the contracts is variable, as it is primarily based on a PMPM rate on monthly attributed membership, which can fluctuate over the life of the contract.

The majority of the Company’s net PMPM transaction price relates specifically to the transfer of services for a distinct increment of the series and is recognized as revenue in the month in which attributed members are entitled to receive care coordination services.

The remainder of the Company’s revenue is derived from leveraging the Company’s existing base of providers and patients to deliver value-oriented services including concierge services, virtual visits, virtual scribes and coding, clinical trials, behavioral health management, and partnerships with self-insured employers to offer direct primary care to their employees.

Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, other receivables and assets, accounts payable, and debt. The Company considers the carrying values of cash and cash equivalents, accounts receivable, other receivables, accounts payable, debt to related parties and debt to be indicative of their respective fair values. The carrying amount for debt approximates fair value which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three level hierarchy for fair value measurements is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, defined as follows:

Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2—inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s financial instruments are classified as Level 1 assets and liabilities, as their fair values are based on unadjusted quoted prices in active markets for identical assets or liabilities.

Non-Controlling Interest

Non-controlling interest represents equity ownership that is not attributable to the Company. The consolidated financial statements include the assets, liabilities, revenues, and expenses of subsidiaries in which the Company has a controlling financial interest, including Privia Management Services Organization, LLC, Privia Management Company Montana, LLC, BASS Privia Management Company of California, LLC, Privia Management Company West Texas, LLC, Privia Management Company North Carolina, LLC, Privia Management Company of Ohio, LLC, Privia Services Company Connecticut, LLC, Privia Quality Network Connecticut, LLC, Privia Quality Network Delaware, LLC, our Owned Medical Groups, and Friendly Medical Groups. Net income attributable to non-controlling interests is separately presented in the consolidated statements of operations.

Income Taxes

The Company accounts for income taxes in accordance with the provisions of ASC Topic 740, Income Taxes(“ASC 740”). Under ASC 740, the Company follows the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Should the Company determine that it is more likely than not that some portion or all of its deferred tax assets will not be realized, a valuation allowance to the deferred tax assets would be established in the period such determination was made. State corporate taxes were calculated based on a blended rate calculated based on the Company’s allocation and apportionment to the states. Calculation under the blended rate does not result in a material difference.

ASC 740 requires an entity to recognize the financial statement impact of a tax position when it is more likely than not that the position will be sustained upon examination. If the tax position meets the more likely than not recognition threshold, the tax effect is recognized at the largest amount of the benefit that has greater than a fifty percent likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance for classification, interest and penalties, accounting in interim periods, disclosure, and transition. ASC 740 requires that a liability created for unrecognized tax benefits be presented as a separate liability and not combined with deferred tax liabilities or assets.

At December 31, 2025, and 2024, the Company believes it has appropriately accounted for any unrecognized tax benefits. To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected. As there are no uncertain tax positions, the Company does not have any accrued interest or penalties associated with any unrecognized tax benefits. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in various state jurisdictions. As of December 31, 2025, the periods subject to examination by the Company’s major jurisdictions (federal and various states) are generally for the years December 31, 2020 through December 31, 2024.

Provider Liability

Provider liability represents amounts payable to physicians, hospitals and other ancillary providers, including Privia Physicians, their related practices, as well as providers contracted through the Company’s payer arrangements. These liabilities include amounts not yet paid for physician guaranteed payments and other required distributions pursuant to the service agreements as well as medical claim costs for services provided to attributed beneficiaries for which the Company is financially responsible under at-risk capitated revenue arrangements whether paid directly by the Company or indirectly by payers with whom the Company has contracted.

Leases

The Company evaluates whether a contract is or contains a lease at the inception of the contract. Upon lease commencement, defined as the date on which a lessor makes the underlying asset available to the Company for use, the Company classifies the lease as either an operating or finance lease. The Company’s leases primarily consist of operating leases for office space in certain states in which the Company operates. The Company also has operating leases for equipment, which are not significant.

Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Lease liabilities are measured at the present value of the remaining, fixed lease payments at lease commencement. The Company uses its incremental borrowing rate based on the information available at the later date of adoption, inception, or modification in determining the present value of lease payments. Right-of-use assets are measured at an amount equal to the initial lease liability, plus any prepaid lease payments (less any incentives received) and initial direct costs, at the lease commencement date. The Company has elected to account for lease and non-lease components as a single lease component for its facility leases. As a result, the fixed payments that would otherwise be allocated to the non-lease components are accounted for as lease payments and are included in the measurement of the Company’s right-of-use asset and lease liability. Lease expense for lease payments is recognized on a straight-line basis over the lease term and included in general and administrative expense within the accompanying consolidated statements of operations.

The Company does not recognize a lease liability or right-of-use asset within its consolidated balance sheets for short-term leases defined as a lease, that at its commencement date, has a term of 12 months or less and does not include a purchase option that the lessee is reasonably certain of exercise. Instead, short-term lease payments are recognized into expense on a straight-line basis over the lease term. When determining whether a lease qualifies as a short-term lease, the Company evaluates the lease term and the purchase option in the same manner as all other leases.

Provider Expense

Provider expense represents amounts accrued or payments made to physicians, hospitals and other service providers, including Privia Physicians, their related physician practices, and providers with whom the Company has contracted through payer partners. Those costs include physician guaranteed payments and other required distributions pursuant to the service agreements as well as medical claims costs for services provided to attributed beneficiaries under at-risk capitated revenue arrangements for which the Company is financially responsible whether paid directly by the Company or indirectly by payers with whom the Company has contracted. Provider expense is recognized in the period in which services are provided.

Cost of Platform

Cost of platform represents direct costs incurred to provide services to Privia Physicians and their practices. These costs include third-party electronic medical records and practice management software expenses, employee-related expenses, including salaries, employee benefits costs, stock-based compensation, consulting expenses, travel expenses and technology related costs for the team. Cost of platform excludes depreciation and amortization expense. Third-party electronic medical records and practice management software expenses are paid on a percentage of revenue basis, while employee-related expenses are variable based on the number of employees used to service the Company’s implemented physicians.

Sales and Marketing

Sales and marketing expense consists primarily of employee-related expenses, including salaries, stock-based compensation, commissions, and employee benefits for personnel engaged in marketing, sales, community outreach, and sales support. These expenses reflect the costs of both field-based and corporate sales and marketing teams. Sales and marketing expenses also include travel expenses and central and community-based advertising to drive awareness, engagement, and retention among current and prospective patients as well as the infrastructure required to support the Company’s marketing initiatives.

General and Administrative

Corporate, general and administrative expense includes employee-related expenses, including salaries, benefits and stock-based compensation, as well as expenses related to technology infrastructure, operations, clinical and quality support, finance, legal, human resources, and development departments. Additionally, general and administrative expense includes all corporate technology and occupancy costs.

Stock-Based Compensation

The Company accounts for share-based compensation in accordance with the provisions of ASC 718, Compensation–Stock Compensation (“ASC 718”), which requires the issuer to recognize compensation expense for all share-based payments made to employees based on the fair value of the share-based payment at the grant date. The Company estimates the fair value of stock options granted to employees and contractors using the Black-Scholes option-pricing model. Option valuation models require several inputs, such as the expected stock price volatility, the fair value of the stock, the risk free rate, the expected term of the award and the dividend yield. The Company records share-based compensation forfeitures as a reversal of previously recognized compensation expense as the forfeitures occur. For additional information, refer to Note 11. “Stockholders’ Equity.”

The Company issues certain Performance Stock Unit (“PSU”) awards that vest upon satisfaction of specified service conditions, performance-based conditions, and/or market conditions. For some awards, the performance metrics have been identified; however, certain targets have not yet been established. For the awards with performance-based conditions where the target will be fully established at a future date, the Company has determined that the service inception date precedes the grant date for these awards as (a) the awards were authorized prior to establishing an accounting grant date, (b) the recipients began providing services prior to the grant date, and (c) there are performance conditions that, if not met by the accounting grant date, will result in the forfeiture of the awards. As the service inception date precedes the accounting grant date, stock-based compensation expense is recognized over the requisite service period based on the estimated fair value at each reporting date. For awards that are solely based on employment and the achievement of certain market performance metric targets, which have already been determined, the fair value of the PSUs is determined on the grant date using a Monte Carlo valuation model. Stock-based compensation expense for these awards is fixed and is recognized on a straight-line basis over the requisite service period.

Net Income per Share Attributable to Common Stockholders

Basic net income per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

Diluted net income per share attributable to common stockholders is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, including the effect of dilutive common stock equivalents, determined using the treasury stock method. Dilutive securities are excluded from diluted earnings per share in periods in which their inclusion would be antidilutive.

Recently Adopted Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes - Improvements to Income Tax Disclosures(“ASU 2023-09”). The amendments require (i) enhanced disclosures in connection with an entity's effective tax rate reconciliation and (ii) income taxes paid disaggregated by jurisdiction. The amendment is effective for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 for the annual period ending December 31, 2025 on a prospective basis. See Note 10. “Income Taxes” for the related disclosures.

Recently Issued Accounting Pronouncements Pending Adoption

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (“DISE”)(“ASU 2024-03”). The amendments require disclosures about the nature of expenses included in the income statement, such as purchases of inventory, employee compensation and depreciation. The amendment is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of ASU 2024-03 on its financial statements and related disclosures.

In May 2025, the FASB issued ASU No. 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in a Variable-Interest Entity. The amendment clarifies the guidance when an entity involved in an acquisition transaction effected primarily by exchanging equity interests and the legal acquiree is a VIE that meets the definition of a business. Entities must identify the accounting acquirer using the factors in ASC 805-10-55-12 through 55-15, rather than relying solely on the VIE consolidation model. The amendment is effective for annual reporting periods beginning after December 15, 2026, including interim periods within the fiscal years and applied prospectively to acquisitions after the adoption date. The Company is currently evaluating the impact of this standard on its financial statements and related disclosures.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets(“ASU 2025-05”), which provides a practical expedient for estimating expected credit losses for current accounts receivable and current contract assets. The amendment is effective for annual reporting periods beginning after December 15, 2025, including interim periods within the fiscal years and applied prospectively after the adoption date. The Company does not expect ASU 2025-05 to have a material impact on its financial statements and related disclosures.

2. Revenue Recognition

The following table presents the Company’s revenues disaggregated by source:

FFS-patient care is primarily generated from third-party payers with which the Company has established contractual billing arrangements. The following table presents the approximate percentages by source of net revenue received for healthcare services provided for the periods indicated:

FFS-administrative services revenue is earned through the Company’s MSA with Non-Owned Medical Groups primarily based on a fixed percentage of net collections from patient care generated by those medical groups.

VBC revenue is primarily earned through contracts that include Capitated revenue, Shared savings and Care management fees. Capitated revenue is generated from “at-risk contracts” under which the Company receives a fixed monthly payment from third-party payers in exchange for providing healthcare services to attributed beneficiaries. The Company is responsible for delivering or covering the cost of required healthcare services attributed to these beneficiaries. At-risk Capitated revenue is recorded gross in revenues as the Company acts as the principal in arranging, providing, and controlling managed healthcare services provided to the attributed lives. Shared savings revenue and Care management fees are generated through contracts with large commercial payer organizations and the U.S. Federal Government.

For shared savings arrangements, the Company estimates the transaction price by analyzing the activities during the relevant time period in consideration of the agreed-upon benchmarks, metrics, performance criteria, inflation trends, risks adjustment factors, attribution criteria and any other contractually defined factors. Revenue is recognized only when the transaction price can be reasonably estimated and it is probable that a significant reversal will not occur, once uncertainties related to the variable consideration are resolved. Revenue is recorded over the period in which services are provided, typically during a pre-set twelve-month measurement period. Subsequent changes to the estimated transaction price are generally recorded as adjustments to revenue in the period of the change. In September 2025, the Company received final settlement notices from CMS for the Company’s portion of MSSP shared savings generated during the 2024 performance year. For the year ended December 31, 2025, the amount of revenue recognized related to the change in estimate of our Shared Savings accrual was $28.5 million.

Contract Asset

The Company has the following contract assets:

Remaining Performance Obligations

The Company does not disclose the value of the remaining performance obligations or the expected timing of revenue recognition at the end of the reporting period as it has minimal unsatisfied performance obligations. Patients generally have no obligation to continue receiving services at the Company’s facilities and substantially all performance obligations are satisfied at the time the service is rendered.

3. Business Combinations

2025 Acquisitions

Arizona

In April 2025, the Company entered the Arizona market with the acquisition of a 51% ownership interest in PMG AZ. The acquisition was accounted for using the acquisition method pursuant to the requirements of ASC 805. The results of operations and cash flows for the period subsequent to the acquisition are included in the accompanying consolidated statement of operations and consolidated statement of cash flows.

The preliminary fair value of the assets acquired and liabilities assumed at the acquisition date are as follows (in thousands):

Information regarding the net cash paid for the acquisition is as follows (in thousands):

In connection with the 2025 transaction related to PMG AZ, the seller is entitled to additional amounts up to a maximum value of $25.0 million, subject to meeting certain future targets. Of the $25.0 million, $10.0 million may be earned over athree-year period beginning at the acquisition date, and $15.0 million may be earned upon renewal of certain agreements in 2030. The Company accounted for these additional amounts as post combination expense and expects to recognize any amounts earned within General and administrative expenses in the consolidated statements of operations and Accounts payable and accrued expenses and Other non-current liabilities, for current and long-term liabilities, respectively, within the consolidated balance sheets.

During the year ended December 31, 2025, a measurement period adjustment was recorded to offset deferred tax assets, thereby increasing goodwill by $1.7 million. The goodwill relating to this acquisition is primarily attributable to synergies related to the assembled workforce. None of the goodwill recognized for the acquisition of PMG AZ is expected to be deductible for tax purposes. The Company is in the process of completing its final valuation analysis to identify and determine the fair value of tangible and identifiable intangible assets acquired and the liabilities assumed. Thus, the final allocation of the purchase price may differ from the preliminary estimates used at December 31, 2025 based on additional information obtained and completion of the valuation of the identifiable intangible assets.

Evolent

In December 2025, the Company acquired an ACO business from Evolent Health, Inc. (“Evolent”). The accompanying consolidated balance sheet includes the preliminary estimated fair values of the net assets acquired. The results of operations and cash flows for the period subsequent to the acquisition are included in the accompanying consolidated statement of operations and consolidated statement of cash flows.

The preliminary fair value of the assets acquired and liabilities assumed at the acquisition date were as follows (in thousands):

Information regarding the net cash paid for the acquisition is as follows (in thousands):

In connection with the 2025 transaction related to Evolent, the seller is entitled to additional consideration up to $13.0 million if certain conditions are met. The Company has recognized the acquisition-date fair value of the contingent consideration of $2.9 million and determined the liability to be a Level 3 instrument due to significant inputs that are not observable in the market. The fair value of the contingent consideration was calculated based on the income approach. The expected (probability-weighted) payment amount is estimated based on the likelihood of achieving the threshold and target levels. The present value of the expected payment was calculated by discounting the expected payment amount from the expected payment date to the valuation date, at an appropriate discount rate. The amount will be remeasured and adjusted quarterly, if necessary, based on the assessed fair value.

The goodwill relating to this acquisition is primarily attributable to synergies related to the assembled workforce. All of the goodwill recognized for the acquisition of Evolent is expected to be deductible for tax purposes. The Company is in the process of completing its final valuation analysis to identify and determine the fair value of tangible and identifiable intangible assets acquired and the liabilities assumed. Thus, the final allocation of the purchase price may differ from the preliminary estimates used at December 31, 2025 based on additional information obtained and completion of the valuation of the identifiable intangible assets.

In December 2025, the Company acquired 51% of Privia Medical Group Florida, LLC from Health First Medical Group, LLC.

Pro Forma Total Revenues

The 2025 acquisitions contributed revenues of $51.9 million from the date of acquisition through December 31, 2025. The following table summarizes the unaudited pro forma total revenues of the combined entity had the date of the acquisition been January 1, 2024:

2024 Acquisitions

In January 2024, PMG West Texas Holdings, PLLC, a Nominee PC, acquired a majority ownership interest in an independent physician association in the Gulf Coast Market. The Company, through one of its affiliates, is a party to a Restriction Agreement with the Nominee PC. The results of operations of the acquisition are included in the Company’s consolidated financial statements since the acquisition date.

In November 2024, the Company acquired Privia Medical Group Indiana, LLC, (“PMG IN”). PMG IN is a physician-owned Medical Group, with PMG Indiana Holdings, LLC (“Friendly IN PC”), an Indiana professional limited liability company wholly owned by a licensed physician with a leadership role in the Company, holding a majority membership interest and having governance and control rights pursuant to the governing documents of PMG IN. The Company has a contractual relationship with Friendly IN PC through a Restriction Agreement. Friendly IN PC owns 51% interest in PMG IN. The results of operations of the acquisition have been included in the Company’s consolidated financial statements since the acquisition date.

The purchase price for the acquisitions noted above was allocated as follows:

The goodwill relating to these acquisitions is primarily attributable to synergies related to the assembled workforce. Goodwill is measured as the excess of the consideration transferred over the fair value of the net assets acquired on the acquisition date.

4. Goodwill and Intangible Assets, Net

For the purposes of the goodwill impairment assessment, the Company as a whole is one reporting unit as the Chief Operating Decision Maker (“CODM”) reviews financial results on a consolidated basis. The Company recognizes the excess of the purchase price, plus the fair value of any non-controlling interests in the acquiree, over the fair value of identifiable net assets acquired as goodwill. The Company performs a qualitative assessment on goodwill at least annually or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable. If it is determined in the qualitative assessment that the fair value of a reporting unit is more likely than not below its carrying amount, then the Company will perform a quantitative impairment test. The quantitative goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. Any excess in the carrying value of a reporting unit’s goodwill over its fair value is recognized as an impairment loss, limited to the total amount of goodwill allocated to that reporting unit. The carrying value of goodwill at December 31, 2025 and 2024 is $209.8 million and $141.6 million, respectively. No indicators of impairment were identified during the years ended December 31, 2025, 2024, and 2023. As of December 31, 2025, there was no accumulated impairment of goodwill.

During January 2024, PMG West Texas Holdings, PLLC, a Nominee PC, acquired a majority ownership interest in an independent physician association in the Gulf Coast Market. The Company, through one of its affiliates, is party to a Restriction Agreement with the Nominee PC. The Company recorded Goodwill of $0.7 million in connection with the acquisition, representing the excess of the purchase price over the fair value of the net assets acquired.

During November 2024, the Company entered into the Indiana market through the acquisition of Privia Medical Group Indiana, LLC (“PMG IN”), whereby Privia acquired majority ownership in PMG IN. The Company recorded Goodwill of $2.2 million in connection with PMG IN, which represents the excess of the purchase price over the fair value of the net assets acquired.

During April 2025, the Company entered into the Arizona market through the acquisition of PMG AZ, whereby Privia acquired a 51% ownership interest in PMG AZ. During the year ended December 31, 2025, the Company recorded Goodwill of $43.8 million in connection with PMG AZ, which represents the excess of the purchase price over the fair value of the net assets acquired.

During December 2025, the Company acquired an ACO business from Evolent Health, Inc. In this connection, the Company recorded Goodwill of $24.4 million, which represents the excess of the purchase price over the fair value of the net assets acquired.

A summary of the Company’s intangible assets is as follows:

The remaining weighted average life of all amortizable intangible assets is approximately 17.5 years at December 31, 2025.

Amortization expense for intangible assets was approximately $9.2 million, $6.2 million and $5.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Remaining estimated amortization expense for the Company’s intangible assets is as follows:

5. Leases

The Company leases office space under various operating lease agreements. The initial terms of these leases range from 3 to 9 years and generally provide for periodic rent increases and renewal options.

The components of lease expense were as follows:

The aggregate future lease payments for operating leases in the years subsequent to December 31, 2025 are as follows:

6. Property and Equipment, Net

A summary of the Company’s property and equipment, net is as follows:

Depreciation and amortization expense for property and equipment was approximately $0.7 million, $1.1 million and $1.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.

7. Account Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following:

8. Provider Liability

Provider liability represents amounts payable to physicians, hospitals and other ancillary providers, including both Privia physicians (and their related physician practices), and providers the Company has contracted with through payer partners. These liabilities include amounts not yet paid for physician guaranteed payments and other required distributions pursuant to the service agreements as well as medical claims costs for services provided to attributed beneficiaries for which the Company is financially responsible under at-risk Capitated revenue arrangements, whether paid directly by the Company or indirectly by payers with whom the Company has contracted. Provider expense is recognized in the period in which services are provided and include estimates of claims that have been incurred but have either not yet been received, processed, or paid and as such, not reported.

The Company’s provider liability balance represents management’s best estimate of its obligation for unpaid provider expenses. Management exercises judgment to determine the assumptions used for developing the required estimates. Provider liability estimates are developed using actuarial methods commonly used by health insurance actuaries that include a number of factors and assumptions including medical service utilization trends, changes in membership, observed medical cost trends, historical claim payment patterns and other factors.

Periodically, the Company re-examines previously established provider liability estimates based on actual claim submissions and other changes in facts and circumstances. The Company adjusts its provider liability estimates as more complete claims information becomes available, recognizing changes in the period in which they are identified. Differences between estimated liabilities and actual claim settlements are recognized in the period the claims are settled.

Liabilities for unpaid medical claims under at-risk capitation arrangements, included in Provider liability in the accompanying consolidated balance sheets, are as follows:

9. Debt

On November 16, 2023, Privia Health Group, Inc., PH Group Holdings Corp., and Privia Health, LLC, as borrower, (collectively, the “Privia Parties”) entered into a credit agreement (the “Revolving Credit Agreement”) with Wells Fargo Bank, National Association, as issuing lender, and certain other lenders, with borrowing availability of revolving loans and letters of credit up to $125 million (the “Revolving Credit Facility”). The Revolving Credit Facility is senior secured, expires in November 2028 and bears interest at either i) a base rate, as defined, plus an applicable margin ranging from 0.25% to 0.75%, or ii) Secured Overnight Financing Rate (“SOFR”) plus 0.10%, plus an applicable margin that ranges from 1.25% to 1.75%, depending on the consolidated leverage ratio, as defined. The Revolving Credit Facility includes a commitment fee on the unused Revolving Credit Facility that ranges from 0.20% to 0.30% (0.20% per annum at year end) depending on the consolidated leverage ratio, as defined. The facility generally may be used for capital expenditures, expenses related to transactions and general corporate purposes.

The Revolving Credit Agreement contains customary affirmative, negative and financial covenants, and events of default. The occurrence of an event of default under the Revolving Credit Agreement may cause the unpaid principal and accrued interest, and all other obligations under the Revolving Credit Agreement to become immediately due and payable.

As of December 31, 2025, no amounts were outstanding under the Revolving Credit Facility. Substantially all of the Company’s real and personal property serve as collateral under this agreement.

10. Income Taxes

The provision for income taxes for years ending December 31, 2025, 2024, and 2023 are as follows:

Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and deferred tax liabilities as of December 31, 2025, and 2024 are as follows:

For the years ended December 31, 2025, and 2024, the Company completed an assessment of the likelihood of realizing all or some portion of its net deferred tax assets. Based on an analysis of the positive and negative evidence, the Company determined it was more likely than not that the Company will be in a position to realize the benefits of the deferred tax asset as a result of consistent profitability. As such, no valuation allowance was recorded in either year. As of December 31, 2025, the Company has remaining federal and state net operating loss carryforwards of approximately $26.9 million and $24.7 million (post-apportioned state NOL) respectively, that begin to expire in 2035.

The following is a reconciliation of income tax computed at the U.S. federal statutory income tax rate to the provision for income taxes for the year ended December 31, 2025:

The following is a reconciliation of income tax computed at the U.S. federal statutory income tax rate to the provision for income taxes for the years ended December 31, 2024, and 2023:

The stock compensation impacting the income tax provision is primarily attributable to stock-based compensation expense that is not deductible under Section 162(m), partially offset by tax deductible stock-based compensation.

The 2020 through 2024 federal and state income tax returns are within the statute of limitations and are currently not under examination by any federal or state tax authority.

The Company assesses the uncertainty in its income tax positions to determine whether a tax position of the Company is more likely than not to be sustained upon examination, including resolution of any related appeals of litigation processes, based on the technical merits of the position. For the tax position meeting the more-likely-than-not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon the ultimate settlement with the relevant taxing authority. As of December 31, 2025, and 2024, the Company had not recorded any reserves for uncertain tax positions or related interest and penalties.

The following is a reconciliation of the income taxes paid (net of refunds received) for the year ended December 31, 2025: