The Oncology Institute (TOI) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 23% year-over-year to $98.6 million, driven by strong dispensary growth, new capitation contracts, and expansion across multiple states.

• Net loss for Q2 2024 was $15.5 million, improved from $16.9 million in Q2 2023; adjusted EBITDA was $(8.7) million, down from $(6.9) million.

• The company operates 87 clinics in 14 markets, serving over 64,000 patients and managing 2.1 million lives under value-based contracts as of June 30, 2024.

• Board initiated a strategic review of financial and operational alternatives to enhance shareholder value, engaging Leerink Partners and Latham & Watkins LLP as advisors.

• Management expects improvement in net loss and adjusted EBITDA in the second half of 2024 as new contracts go live and margin pressures ease.

Financial highlights

• Q2 2024 consolidated revenue: $98.6 million, up 23% year-over-year and 4.1% sequentially.

• Gross profit for Q2 was $13 million, with gross margin at 13.2%, down from 18.8% in Q2 2023 due to higher dispensary costs.

• Adjusted EBITDA for Q2 was $(8.7) million; net loss was $15.5 million, an improvement from Q2 2023.

• Cash, cash equivalents, and marketable securities totaled $46.4 million at quarter end.

• No goodwill impairment was recorded in 2024, compared to $16.9 million in the prior year period.

Outlook and guidance

• Full-year 2024 revenue guidance unchanged at $400–$415 million; gross profit guidance updated to $62–$69 million and adjusted EBITDA to $(21)–$(28) million due to margin pressures and contract changes.

• Management expects continued operating losses and negative cash flows due to ongoing investments and public company costs.

• Cash on hand and marketable securities are expected to fund operations for at least the next 12 months.

• Annualized revenue from new capitation deals signed year-to-date exceeds $41 million, with expected adjusted EBITDA contribution of $13 million.

• Interest expense expected at $4–$5 million, other adjustment add-backs at $2–$4 million, and depreciation/amortization at $4–$6 million.