Privia Health Group Inc's Q3 2025: Contradictions Emerge on MSSP Guidance, Payer Relationships, MA Margins, and Value-Based Care Strategy

Date of Call: November 06, 2025

Financials Results

• Revenue: $940.4M practice collections in Q3, up 27.1% YOY (YTD practice collections $2.6B, up 19.6% YOY)

Guidance:

• Implemented providers expected to increase ~11.2% year-over-year to ~5,325 by year-end 2025.
• Total attributed lives growth expected to be ~12.5% in 2025.
• Practice collections expected to grow ~17.1% in 2025 (midpoint).
• Care margin expected to grow ~13.2% in 2025 (midpoint).
• Adjusted EBITDA expected to grow ~32% at the midpoint; >80% of full-year adjusted EBITDA expected to convert to free cash flow.
• Expect to end 2025 with at least ~$410M cash assuming no further BD deployment; Evelyn ACO deal to close by year-end and contribute to 2026 adjusted EBITDA.

Business Commentary:

* Revenue and Provider Growth: - Privia Health reported a 27.1% increase in practice collections to $940.4 million in Q3, with implemented providers growing 13.1% year-over-year. - The growth was driven by strong performance across the value-based care book and new provider signings and implementations.

• Adjusted EBITDA Improvement:
• Adjusted EBITDA increased 61.6% over the previous year to reach $38.2 million, with an EBITDA margin of 30.5%.

• This improvement was due to better-than-expected results across the value-based care book and significant operating leverage.

• MSSP Performance:

• Privia managed over $2.5 billion in medical spend in its MSSP program for 2024, with a savings rate of 9.4%, up from 8.2% in 2023.

• The improved performance was attributed to successful cost management and increased savings in the Medicare Shared Savings Program.

• Acquisition and Market Expansion:

• Privia Health announced an acquisition of an ACO business from Elevance Health for $100 million in cash and an earnout of up to $13 million.
• The acquisition adds over 120,000 value-based care attributed lives and enters Privia into new states, enhancing its national footprint.
  
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management highlighted strong results: practice collections +27.1% YOY to $940.4M, adjusted EBITDA +61.6% to $38.2M (30.5% of care margin), YTD practice collections +19.6% to $2.6B, pro forma cash $409.9M with no debt, and the company raised 2025 outlook above prior high end—all signaling confidence and momentum.

Q&A:

• Question from Mark Olan (Nephron Research): Given strong MSSP results in 2024, will that outperformance be factored into future baselines or is 2024 above the run rate?
  Response: They will continue the multi-year methodology: factor CMS data, attribution, program changes and prior-year outperformance into next-year estimates—2024 results are incorporated into updated guidance.

• Question from Elizabeth Anderson (Evercore ISI): How is the core business trending into Q4 and can you comment on the prior projection of >$130M EBITDA for 2026?
  Response: No quarterly guidance; momentum remains strong, updated guidance sits near $120M (2024 base) and management expects ~20% growth toward 2026 targets, with formal guidance issued in February.

• Question from Jake Mail (The Ringers): What drove the sharp increase in revenue/practice collections per provider this quarter?
  Response: Broad-based drivers: higher ambulatory utilization, value-based outperformance vs accruals, new markets (Arizona, Indiana) and net new providers boosting collections per provider.

• Question from Matt Gillmor (KeyBank): How do you think about synergies with the Evelyn ACO and the ~1,000 physician base' appetite to join Privia medical groups?
  Response: Evelyn provides cross-sell and long-term ROI opportunities for practices to join Privia medical groups; improving ACO performance is a multiyear effort with multiple synergy levers.

• Question from Thomas Walsh (Barclays): Can you discuss the moving pieces in the capitated business this quarter, including revenue step-ups, prior-year claims development, and membership changes?
  Response: Capitated book is small (~20–22k lives); Q3 benefited from timing/retro activity and better-than-expected performance versus accruals; management remains cautious on broader MA capitation exposure.

• Question from Jailendra Singh (Truist Securities): With Reach uncertainties, does this create M&A opportunities to buy entities shifting away from Reach/MSSP?
  Response: Yes—market dislocation creates BD opportunities to acquire non-core or struggling value-based assets at reasonable prices (Evelyn cited as an example).

• Question from Jeff Garro (Defen): Have your payer conversations changed given execution on value-based care—any step-change in contracting?
  Response: Contracting is ongoing and local; strong state-level performance creates case studies that support broader, differentiated value-based elements in fee-for-service and other contracts.

• Question from Ryan Langston (TD Cowen): On MA cap performance, how much was one-time retro pickup vs core performance and can you grow MA lives within existing contracts?
  Response: It was a mix of prudent accruals and core outperformance; the book is small; growth comes from same-state provider additions and new MA contracts—both channels are being pursued.

• Question from A.J. Rice (UBS): Any notable utilization trends heading into Q4 or evidence of acceleration due to coverage changes?
  Response: Ambulatory utilization remains elevated and is expected to stay high; that supports fee-for-service results and is incorporated into value-based planning.

• Question from Derek Gross (Piper Sandler) on behalf of Jessica Tassan: Did the Evelyn acquisition include the partial capitation BCBS NC contract and other contracts?
  Response: Yes—the acquired business included all contracts (commercial, MA, MSSP); company will not disclose contract-level financial specifics but will report aggregated metrics.

• Question from Daniel Grosslight (Citi): Implied Q4 guide shows limited profitability growth—are there investments weighing on margin and did IMS contribute this quarter?
  Response: No incremental investments; conservative posture given strong YTD results; IMS was implemented in September and will begin contributing in Q4; bonus accruals are already expensed.

• Question from Jack Slevin (Jefferies): Should we expect higher cash outflows for variable comp given outperformance?
  Response: Yes—bonus accruals are included in guidance and P&L; higher cash payouts will hit in Q1 as a result of outperformance.

• Question from Jenny Shen (BTIG) on behalf of David Larsen: Any anticipated impacts from the new federal bill on Medicaid/exchange for Privia?
  Response: Medicaid and exchange are small for Privia; no meaningful impact expected given business mix and lack of downside Medicaid risk.

• Question from Ryan Daniels (William Blair): Could changes to the inpatient-only list or ASC opportunities be a bigger growth lever?
  Response: Yes—ancillary/ASC opportunities are a focus as density grows; selectively pursue outpatient surgery, ortho and chronic specialty capabilities where it helps manage total cost of care.

• Question from Joaquin (Bank of America) on behalf of Craig Jones: What would make you more comfortable taking more MA risk (e.g., a V29 change)?
  Response: Comfort requires stabilized program rules and sustainable payer-provider alignment; they favor shared-risk models and will remain cautious until excesses normalize and long-term equilibrium is evident.

Contradiction Point 1

MSSP Performance and Guidance

It involves differing expectations and explanations of MSSP performance and guidance, which are critical for understanding the financial outlook and strategic direction of the company.

How will you guide future MSSP performance based on 2024’s strong results? Should this outperformance be considered the new baseline, or is there a risk of a declining run rate? - Mark Olan (Nephron Research)

2025Q3: We will continue to update our planning based on data from CMS, considering changes in attribution, program structure, and fee rates. Any outperformance in MSSP is integrated into future guidance, which reflects our recent results and any updated VON 2025. - Parth Mehrotra(CEO)

Is the MSSP trend as favorable as CMS projections suggest? - Michael Ha (Baird)

2024Q4: Our methodology is consistent. Shared savings performance is influenced by program trends and risk management. Privation continues to adopt a prudent approach with no assumptions of significant shared savings growth. - Parth Mehrotra(CEO)

Contradiction Point 2

Payer Relationships and Contracting

It highlights differing perspectives on the company's relationships with payers and the outlook for new contracts, which are crucial for growth and financial stability.

How will your payer relationships evolve in the next year, considering your progress on value-based care? - Jeff Garro (Defen)

2025Q3: Our relationships with payers are ongoing and broad-based. We continue to work closely with them, demonstrating strong results across various payer types. Our differentiated value proposition is well-received, leading to improved patient outcomes and reduced costs. - Parth Mehrotra(CEO)

Are there more opportunities with payers currently? - Ryan Scott Daniels (William Blair & Company L.L.C.)

2025Q2: Our payer contracting has been very strong, particularly in new geographies where we see payer interest in executing multi-year contracts. We had very strong forward-looking discussions with payers across the value-based care market. - Parth Mehrotra(CEO)

Contradiction Point 3

MA Contribution Margin

It involves the explanation of MA contribution margin, which is a key financial metric for understanding Privia's financial health and its managed care operations.

Can you explain the key factors affecting the capitated business this quarter, including revenue, prior year claims adjustments, and membership changes? - Andrew Mock (Barclays)

2025Q3: Our small capitated book performed well. Trends included timing of data and retroactive adjustments, with Q3 being the high mark for the year. We are cautious about the future, given the persistent pressures in MA. - Parth Mehrotra(CEO)

Are there any new market entry costs in the 2025 guidance, and could you elaborate on the MA contribution margin? - David Larsen (BTIG)

2024Q4: The MA contribution margin considers the entire capitated revenue and total claims, resulting in positive contribution margin. - David Mountcastle(CFO)

Contradiction Point 4

Value-Based Care Strategy

It involves the company's strategy regarding risk-sharing arrangements in value-based care, which is crucial for growth and financial stability.

How do ACO programs like ACO Reach impact Privia's MSSP strategy, and is there potential for M&A opportunities? - Jailendra Singh (Truist Securities)

2025Q3: We see opportunities in the current landscape, with many entities struggling to scale profitably. We will look to acquire entities at reasonable prices, an example being the Evelyn acquisition. - Parth Mehrotra(CEO)

Can you discuss the growth in capitated lives and your 2026 MA strategy? - Jessica Tassan (Piper Sandler)

2025Q1: For MA, we prefer risk-sharing arrangements with payers due to current challenges. We'll continue to grow attributed lives in MA, focusing on shared risk rather than full capitation. - Parth Mehrotra(CEO)

Contradiction Point 5

MSSP Performance Expectations

It involves differing expectations for MSSP performance, which is a key component of the company's revenue and growth strategy.

How will you guide future MSSP performance given 2024's strong results? Should this outperformance be the new baseline or is a run rate decline possible? - Mark Olan (Nephron Research)

2025Q3: We will continue to update our planning based on data from CMS, considering changes in attribution, program structure, and fee rates. Any outperformance in MSSP is integrated into future guidance, which reflects our recent results and any updated VON 2025. - Parth Mehrotra(CEO)

Were there any surprises in the MSSP implementation compared to expectations, and have there been changes in care management strategies? - Alberta Massey (Leerink Partners)

2025Q1: Timing aside, V28 doesn't significantly affect MSSP for us. Pressures in MA are playing out as expected, and we're cautious about taking additional risk without proper compensation. - Parth Mehrotra(CEO)