The Oncology Institute's Q2 2025: Navigating Contradictions in Drug Pricing, Revenue Growth, and Patient Volume

Drug pricing and capitated margins, impact of Inflation Reduction Act (IRA) and drug pricing reform, revenue growth drivers in 2025, impact of contract changes on patient volume and revenue, and expansion and new patient growth are the key contradictions discussed in The Oncology Institute's latest 2025Q2 earnings call.



Revenue Growth and Pharmacy Performance:
- The Oncology Institute reported $120 million in revenue for Q2 2025, representing more than 20% year-over-year growth.
- This growth was driven by record monthly performance in the pharmacy business, alongside a 10% year-over-year increase in fee-for-service revenue, particularly in Florida and Oregon.

Improved Adjusted EBITDA:
- The company's adjusted EBITDA loss for Q2 2025 was $4.1 million, a significant improvement of $4.6 million compared to the same period last year.
- This improvement resulted from organic growth in fee-for-service and pharmacy revenue, disciplined clinical payroll and SG&A expenses, and enhanced drug margins.

Expansion in Capitated Contracts:
- TOI added over 50,000 capitated lives in Nevada and California through new value-based contracts, and plans for continued growth in the second half of the year.
- These contracts are expected to increase utilization of existing clinic investments without adding significant SG&A expenses.

Pharmacy Revenue and Margin Expansion:
- Pharmacy revenue for Q2 2025 was $62.6 million, representing a 41% increase year-over-year and 27% sequentially.
- The growth was due to increased patient volumes, reduced leakage of prescriptions to outside pharmacies, and operational discipline in managing drug procurement.