The Oncology Institute (TOI) Q3 2024 earnings summary

Executive summary

• Welcomed a new CFO with extensive healthcare finance experience and continued expansion into Oregon, now operating 86 clinics across 14 markets and serving 1.9 million value-based contract lives.

• Emphasized value-based care, expanding capitation contracts and pharmacy operations, and targeting community-based oncology care.

• Achieved strong growth with 13 new capitation contracts year-to-date and expanded radiopharmaceutical therapy services, including certification in California.

• Completed a strategic review; the board decided to focus on organic growth after insufficient acquisition interest, citing confidence in market position.

Financial highlights

• Q3 2024 revenue was $99.9 million, up 21.8% year-over-year and 1.3% sequentially; nine-month revenue was $293.1 million, up 22.9% from the prior year.

• Gross profit for Q3 2024 was $14.4 million, down 10.1% year-over-year; gross margin declined to 14.4% from 19.5%.

• Net loss for Q3 2024 was $16.1 million, an improvement from $17.4 million in Q3 2023; nine-month net loss was $51.5 million, improved from $64.3 million in 2023.

• Adjusted EBITDA for Q3 2024 was negative $8.2 million, compared to negative $5.3 million in Q3 2023; nine-month Adjusted EBITDA was negative $27.8 million.

• Cash and equivalents increased to $47.4 million as of September 30, 2024, up from $33.5 million at year-end 2023.

Outlook and guidance

• Management expects significant improvement in net loss in Q4 2024 and beyond, driven by new capitation contracts and pharmacy growth.

• Projected over $1 million Adjusted EBITDA contribution from radiopharmaceutical services in 2025.

• Annualized revenue from new capitation deals signed in 2024 exceeds $50 million.

• Cash on hand is expected to fund operations and capital needs for at least the next 12 months.

• The company believes it is well-positioned for growth without needing to add providers or increase overhead.