The Oncology Institute Inc (TOI) Reports Mixed Q4 and Full Year 2023 Results
Revenue: Q4 consolidated revenue increased by 20.1% year-over-year to $86 million.
Gross Profit: Q4 gross profit decreased by 8.0% year-over-year to $14 million.
Net Loss: Q4 net loss widened to $18.8 million compared to $11.0 million in the prior year quarter.
Adjusted EBITDA: Q4 Adjusted EBITDA was $(6.3) million, a deterioration from $(4.6) million in Q4 2022.
2024 Guidance: Revenue is projected to be between $400 to $415 million with an Adjusted EBITDA of $(8) to $(18) million.
On March 27, 2024, The Oncology Institute Inc (NASDAQ:TOI), a leading community oncology group, announced its financial results for the fourth quarter and full year ended December 31, 2023, alongside providing guidance for the fiscal year 2024. The details were revealed in TOI's 8-K filing. TOI offers a suite of oncology services, including patient services, dispensary, clinical trials, and other healthcare offerings, with revenue primarily generated from patient services.
Q4 and Full Year 2023 Financial Performance
TOI reported a consolidated revenue of $86 million in Q4 2023, marking a 20.1% increase from the same quarter the previous year. This growth was attributed to an increase in capitated contracts and fee-for-service revenue due to practice acquisitions and an increase in clinic count. However, gross profit for the quarter saw an 8.0% decrease to $14 million, mainly due to cost management fluctuations of oral and IV drugs.
The net loss for Q4 2023 was $18.8 million, deepening from a net loss of $11.0 million in the prior year quarter. The basic and diluted loss per share were both $(0.21), compared to $(0.12) and $(0.16) for the prior year quarter, respectively. Adjusted EBITDA for the quarter was negative at $(6.3) million, compared to $(4.6) million for the same period in 2022.
For the full year 2023, TOI's consolidated revenue increased by 28.4% to $324 million compared to the previous year. The net loss for the year was substantial at $83.1 million, a significant decline from a net loss of $83.2 million in the prior year. Adjusted EBITDA for the year was also negative at $(25.8) million, slightly worse than the $(23.5) million reported for the previous year.
Management Commentary and 2024 Outlook
CEO Daniel Virnich expressed satisfaction with TOI's Q4 performance, highlighting strong growth and improved margins. He noted the full-risk capitated contract in South Florida as a significant milestone, demonstrating confidence in TOI's business model.
I am very pleased with our performance in the fourth quarter of 2023, as we delivered strong growth, expanded our gross margin and reduced SG&A. Our full-risk capitated contract in South Florida is a significant milestone for TOI and we are excited to prove our model through this partnership. Our demonstrated ability to concurrently grow topline while improving margins lays the groundwork for continued success in 2024 and beyond."
Looking ahead to 2024, TOI provided guidance anticipating revenue between $400 to $415 million and an Adjusted EBITDA ranging from a loss of $(8) million to $(18) million. These projections are subject to various risks and uncertainties, including market conditions and the impact of potential acquisitions or dispositions.
Balance Sheet and Cash Flow
As of December 31, 2023, TOI reported cash, cash equivalents, and investments totaling $83 million. The company's balance sheet showed total assets of $209.2 million and total liabilities of $152.2 million, with stockholders' equity at $57.0 million.
Operational Highlights and Challenges
TOI highlighted several operational achievements, including the remediation of a material weakness in internal controls and the successful launch of a California-based pharmacy. However, the company faces challenges such as managing drug costs and navigating the complexities of value-based contracts.
Overall, TOI's financial results reflect a company in the midst of expansion and operational refinement. While revenue growth is a positive sign, the increased net loss and negative Adjusted EBITDA indicate areas where efficiency and cost management need to be addressed. Investors and stakeholders will be watching closely to see if TOI can leverage its operational highlights to improve its bottom line in the coming year.
For more detailed information and analysis on The Oncology Institute Inc's financial results, interested parties are encouraged to access the full earnings release and join the upcoming webcast and conference call.
Explore the complete 8-K earnings release (here) from The Oncology Institute Inc for further details.
This article first appeared on GuruFocus.
