Privia Health’s first quarter results were met with a strong positive reaction from the market. Management credited robust provider growth and strong ambulatory utilization as primary drivers behind the quarter’s outperformance. CEO Parth Mehrotra highlighted the company’s continued momentum in new provider signings across all operating markets, which underpinned the 11.7% year-on-year increase in implemented providers. Additionally, Mehrotra pointed to the 12.8% rise in practice collections, attributing this to elevated patient visits across primary care and specialties, supported by the company’s diversified network. The announcement of the expansion into Arizona through the acquisition of IMS, one of the state’s largest independent multi-specialty practices, was also noted as a key strategic move for future growth. However, management clarified that there was no financial impact from Arizona in Q1; all related financial contributions will begin in Q4 2025.
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Privia Health (PRVA) Q1 CY2025 Highlights:
- Revenue: $480.1 million vs analyst estimates of $450.7 million (15.6% year-on-year growth, 6.5% beat)
- Adjusted EPS: $0.22 vs analyst estimates of $0.18 (19.7% beat)
- Adjusted EBITDA: $26.92 million vs analyst estimates of $23.5 million (5.6% margin, 14.5% beat)
- The company reconfirmed its revenue guidance for the full year of $1.85 billion at the midpoint
- EBITDA guidance for the full year is $107.5 million at the midpoint, in line with analyst expectations
- Operating Margin: 1.1%, in line with the same quarter last year
- Sales Volumes rose 11.7% year on year (17.3% in the same quarter last year)
- Market Capitalization: $2.68 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Privia Health’s Q1 Earnings Call
- Jailendra Singh (Truist): Asked about the differentiation and expected contribution of the IMS acquisition in Arizona. CEO Parth Mehrotra responded that IMS provides an immediate scale opportunity and complements Privia’s approach, but specific financial impacts are embedded in overall guidance and will begin once IMS is implemented on the Privia platform.
- Josh Raskin (Nephron Research): Inquired about the mix of primary care versus specialists at IMS and how that impacts practice collections. Mehrotra explained IMS has a slightly higher specialist mix but healthy balance, which results in higher collections per provider.
- Richard Close (Canaccord): Questioned the sustainability of strong ambulatory utilization. Mehrotra noted that elevated patient activity, especially during flu season, is likely to continue and is reflected in current guidance.
- Jessica Tassan (Piper Sandler): Sought insight on growth in capitated lives and strategy for Medicare Advantage contracts. Mehrotra confirmed growth was organic and reiterated a cautious approach to MA risk, preferring shared-risk models over full capitation.
- Matt Shea (Needham): Asked about the faster breakeven timeline for new markets like Arizona. Mehrotra attributed this to the scale of the IMS transaction, which is expected to offset typical new market entry costs sooner than past expansions.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will monitor (1) the pace and profitability of the Arizona integration, with IMS financial contributions starting in Q4 2025, (2) ongoing provider recruitment and attributed lives growth in both new and existing markets, and (3) the impact of ambulatory utilization trends on both fee-for-service and value-based revenue streams. Execution on disciplined risk selection and margin expansion will also be key areas of scrutiny.
Privia Health currently trades at $21.35, down from $23.32 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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