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.

• Service revenue for Q4 2024 was $702.8 million, with full year revenue up 1.3% to $2.79 billion.

• Adjusted EBITDA declined 21.2% year-over-year to $161.1 million, with Q4 Adjusted EBITDA at $40.4 million (5.7% margin).

• Net loss for FY 2024 was $201.3 million, impacted by higher service and interest expenses and a $105.3 million goodwill impairment.

• The company responded with cost reductions, capital raises, board refreshment, and a focus on technology-enabled platforms and strategic divestitures.

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).

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

• Contract receivables decreased by $26.2 million to $117.8 million; contract payables decreased by $94.8 million to $22.6 million at year-end.

Outlook and guidance

• No formal 2025 guidance 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 to see modest volume growth offsetting Medicare Advantage attrition.

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