ModivCare (MODV) Jefferies Global Healthcare Conference summary

Transformation and strategic direction

• Ongoing transformation since late 2022 aims to capitalize on platform scale and market shift toward home-based and access-focused healthcare.

• Strategy centers on delivering lowest cost and best member experience, with significant progress in the last 12-18 months.

• Transformation includes building a strong team, implementing new processes, and leveraging technology.

• Headwinds from COVID and Medicaid redetermination are largely behind, with focus now on execution.

• Market tailwinds support growth as healthcare moves outside clinical settings.

NEMT (Non-Emergency Medical Transport) business outlook

• Shifted from a pure capitated model to a shared risk contract structure, reducing margin volatility.

• State contracts (~40% of revenue) are stable, with high retention and new wins expected; $600M in state business up for renewal in 2024.

• MCO business is growing, with $140M in new annual contract value won last year and $32M last quarter.

• Margin improvement driven by automation, digital integration, and cost reduction; targeting 8% EBITDA margin by year-end, normalizing to 9-10% in 2025+.

• High single-digit revenue growth expected as business stabilizes post-redetermination.

Execution milestones and cost initiatives

• Key metrics to watch: payroll per trip and provider costs, both trending down due to automation.

• Technology adoption (app, text, API integration) reduces call volume and enhances member experience.

• $30-40M annual cost savings expected, with $60M run rate after full implementation.

• Continued focus on ecosystem digitization and process standardization.