Privia Health’s third quarter results surpassed Wall Street’s expectations, yet the market responded negatively—a reaction management attributed in part to uncertainties surrounding the sustainability of recent performance gains. CEO Parth Mehrotra pointed to broad-based growth across both fee-for-service and value-based care, with notable momentum from new provider signings and higher attributed patient lives. Mehrotra highlighted strong execution in the Medicare Shared Savings Program and the company’s ability to drive operational leverage through expanding its provider network and entering new markets, stating, “This outstanding performance gives us confidence to raise our 2025 outlook.” CFO David Mountcastle added that operational improvements led to significant margin expansion, particularly in the company’s value-based care business.
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Privia Health (PRVA) Q3 CY2025 Highlights:
- Revenue: $580.4 million vs analyst estimates of $497.7 million (32.5% year-on-year growth, 16.6% beat)
- Adjusted EPS: $0.29 vs analyst estimates of $0.22 (33.7% beat)
- Adjusted EBITDA: $38.19 million vs analyst estimates of $28.29 million (6.6% margin, 35% beat)
- The company lifted its revenue guidance for the full year to $2.08 billion at the midpoint from $1.9 billion, a 9.2% increase
- EBITDA guidance for the full year is $119.5 million at the midpoint, above analyst estimates of $113.8 million
- Operating Margin: 2.5%, up from 1.3% in the same quarter last year
- Sales Volumes rose 13.1% year on year, in line with the same quarter last year
- Market Capitalization: $2.98 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Privia Health’s Q3 Earnings Call
- Marco Criscuolo (Nephron Research) asked if the strong 2024 MSSP results set a new baseline for future planning. CEO Parth Mehrotra explained that performance is factored into updated guidance, reflecting both prior-year results and current-year estimates.
- Elizabeth Anderson (Evercore ISI) inquired about momentum in the core business for the fourth quarter and EBITDA targets for 2026. Mehrotra said trends remain strong, but the company does not provide quarterly guidance and will update on 2026 targets after evaluating year-end results and the Evolent transaction.
- Matthew Gillmor (KeyBanc) sought clarity on synergy opportunities and integration plans for the Evolent acquisition. Mehrotra said the process will evolve over multiple years, with initial focus on cross-selling and improved performance at the acquired ACOs.
- Thomas Walsh (Barclays) asked about factors behind the step-up in capitated business revenue and sustainability. Mehrotra and CFO Mountcastle attributed the improvement to prudent contract management and timing effects, cautioning that trends in Q3 may not continue.
- Matthew Shea (Needham & Company) asked how the Evolent deal changes Privia’s cadence of new market entry and appetite for further M&A. Mehrotra replied that the company will maintain its disciplined approach, using its strong cash position to pursue opportunities without altering its fundamental strategy.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely monitor (1) the integration progress and synergy realization from the Evolent Health ACO acquisition, (2) the pace of implemented provider growth and successful expansion into new states, and (3) the evolution of value-based care contract performance, particularly in Medicare and Medicaid. Tracking management’s discipline in capital allocation and risk selection amid shifting regulatory environments will also be essential for assessing long-term execution.
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