The Oncology Institute Inc (TOI) Reports Q3 2023 Results: Revenue Up, Net Loss Widens
TOI's Q3 2023 consolidated revenue increased by 26% year-over-year to $82 million.
Net loss for Q3 2023 expanded to $17.4 million from $2.7 million in Q3 2022.
Adjusted EBITDA improved slightly to $(5.3) million in Q3 2023 compared to $(6.7) million in Q3 2022.
TOI reaffirms its full year 2023 guidance, projecting revenue between $290 to $320 million.
On November 8, 2023, The Oncology Institute Inc (NASDAQ:TOI), a leading community oncology group, released its financial results for the third quarter ended September 30, 2023. The company has also reaffirmed its full-year guidance for 2023, signaling confidence in its operational strategy and growth trajectory.
Financial Performance Overview
TOI reported a significant increase in consolidated revenue, reaching $82 million in Q3 2023, which represents a 26% rise compared to the same period last year. The growth was primarily driven by an uptick in patient services revenue, which saw a 20.2% increase, and a notable 42.2% surge in dispensary revenue. Despite the revenue growth, TOI experienced a net loss of $17.4 million, a substantial increase from the $2.7 million net loss reported in Q3 2022. This was largely attributed to a $19 million gain recognized in the prior year's quarter related to the change in fair value of earnout liabilities and conversion option derivative liabilities.
Operational Highlights and Management Commentary
TOI's operational highlights for the quarter included the opening of its 70th clinic, the addition of 5 physicians, and the implementation of Ambience, an AI tool designed to enhance productivity. Daniel Virnich, CEO of TOI, expressed satisfaction with the company's performance, emphasizing the expansion of gross margin and reduction in SG&A expenses. Virnich highlighted the full-risk capitated contract in South Florida as a significant milestone, stating,
Our demonstrated ability to concurrently grow topline while improving margins lays the groundwork for continued success in 2024 and beyond."
Year-to-Date Financials and Adjusted EBITDA
For the nine months ended September 30, 2023, TOI's consolidated revenue was $238.5 million, a 31.7% increase from the previous year. Gross profit for the period rose by 23.9% to $45.2 million. However, the net loss for the nine months was $64.3 million, a stark contrast to the net income of $11.2 million reported for the same period in 2022. Adjusted EBITDA for the nine months was $(19.6) million, slightly worse than the $(18.9) million recorded in the prior year.
Balance Sheet and Cash Flow
As of September 30, 2023, TOI reported cash, cash equivalents, and investments totaling $87.4 million. The balance sheet showed total assets of $218.3 million and total liabilities of $146.5 million. The company's stockholders' equity stood at $71.8 million.
Looking Ahead
TOI has reaffirmed its full-year 2023 guidance, projecting revenue between $290 to $320 million and an adjusted EBITDA of $(25) to $(28) million. The company expects to cover 1.75 million to 2.0 million lives under value-based contracts by the end of the year.
TOI's achievement of these targets is subject to various risks and uncertainties, as disclosed in its filings with the U.S. Securities and Exchange Commission. The company's outlook is based on the assumption of a largely reopened global market, which could be negatively impacted by any reimplementation of closures or other restrictive measures.
Investors and interested parties were invited to join a conference call and webcast to discuss the Q3 results. For more detailed information on The Oncology Institute Inc's financials and operations, please visit TOI's Investor Relations website.
Explore the complete 8-K earnings release (here) from The Oncology Institute Inc for further details.
This article first appeared on GuruFocus.
