ModivCare (MODV) Q4 2024 earnings summary

Executive summary

• 2024 was marked by unprecedented disruption in Medicaid and Medicare Advantage, impacting revenue, cash flow, and working capital due to redetermination, increased utilization, and reimbursement cuts.

• Service revenue for 2024 grew 1.3% to $2.79 billion, with Q4 revenue flat at $702.8 million; net loss for the year was $201.3 million, slightly improved from 2023.

• Adjusted EBITDA declined 21.2% year-over-year to $161.1 million, with Q4 adjusted EBITDA at $40.4 million (5.7% margin); margins and EPS fell sharply.

• The company responded by reducing costs, strengthening partnerships, integrating business segments, and launching a divestiture process to monetize select platforms and reduce debt.

• Board refreshment included new independent directors and a Chief Transformation Officer, with further changes per lender agreement.

Financial highlights

• Q4 2024 revenue was $702.8 million; full-year revenue reached $2.79 billion, up 1.3% year-over-year.

• Q4 adjusted EBITDA was $40.4 million (5.7% margin); full-year adjusted EBITDA was $161.1 million, down 21% year-over-year.

• Q4 net loss was $23.5 million; full-year net loss was $201.3 million; adjusted net income for Q4 was $2.7 million ($0.19 per share), and $11.2 million ($0.79 per share) for the year.

• Free cash flow in Q4 was $24.7 million; year-end cash was $113 million, with a fully drawn revolver of $269 million.

• Net cash provided by financing activities was $144.4 million for the year, driven by increased borrowings and a new term loan.

Outlook and guidance

• No formal 2025 guidance was provided due to ongoing strategic review and anticipated portfolio changes.

• Management expects working capital to normalize in 2025 as utilization stabilizes and clients transition to fee-for-service contracts.

• NEMT contract losses in 2025 expected to be partially offset by new wins, with positive pricing and cost efficiency improvements anticipated.

• PCS expected to see modest organic hours growth; monitoring segment to see modest volume growth offsetting Medicare Advantage attrition.

• Margins in NEMT expected to remain flat year-over-year in 2025, normalizing to 8–10% EBITDA in 2026.