Q1 2024 American Oncology Network Earnings Call
This time I'd like to turn the conference over to Dave Gold Chief Financial Officer at a O N. Thank you you may begin.
Dave Gold: Good morning, everyone and thank you for joining us to discuss American on column D. Networks' first quarter of 2024 results before we begin we would like to remind you that this conference call may include forward looking statements. These statements, which are subject to various risks uncertainties and assumptions could cause our actual results to differ materially from these statements.
Speaker Change: These risks uncertainties and assumptions are detailed in yesterday's press release as well as our filings with the SEC, which can be found on our website at investors <unk> a oncology dot com, we undertake no obligation to revise or update any forward looking statements or information, except as required by law during our call.
Today, we will also reference certain non-GAAP financial information such as adjusted EBITDA, which is derived from the closest GAAP measure net income we use these non-GAAP measures as we believe it supplements nearest GAAP measure and we believe it is useful for our investors presentation of this non-GAAP.
Todd <unk>: Financial information is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with GAAP reconciliations of GAAP to non-GAAP measures can be found in yesterday's press release and in our SEC filings joining me on the call today is our CEO Todd <unk> following our prepared.
Todd <unk>: Our remarks, we'll open the call for your questions.
Dave Gold: Thank you Dave Good morning, everyone. Thank you for joining us on our first quarter of 2024 earnings call I am pleased with our financial and operational performance as our momentum from the prior year has carried over into 2024.
Todd <unk>: Diving in we continue to make great progress executing our growth plan and strategic priorities with the completion of two practice acquisitions during the first quarter and the announcement of two additional practice acquisitions. So far in the second quarter and the first quarter. We added 17, new providers to the Aon platform and at <unk>.
Todd <unk>: Total of 40 year to date.
Speaker Change: <unk> has a differentiated offering to physicians, providing operational autonomy purchasing scale integrated pharmacy and lab centralized back office robust tech platform and aligned economic incentives. It is.
Speaker Change: Designed so that our practices in markets with a significant number of oncologists remain competitive and our practices in markets with limited capacity can operate like larger practices and gain the benefit of scale.
Speaker Change: Consistent with our growth strategy, we expanded our presence during the quarter in our existing markets of Texas with the addition of Woodlands Cancer Institute and Maryland, with the Onboarding of Bay Hematology Oncology. In addition in early April we announced network growth with strategic expansions in Hawaii in Georgia.
Speaker Change: The practices that we acquired in the quarter I've been able to immediately benefit from our integrated care platform that provides numerous novel advantages to patients and providers are key differentiators include integrated in house clinical services like specialty pharmacy lab as well as our centralized operations and technology platform, which drive better practice economics reduce administrative burden.
Speaker Change: And allow physicians to focus on what is most important delivering high quality patient care.
This straightforward with differentiated value proposition helps to fuel, our M&A pipeline and support our longer term growth strategy, notably.
Speaker Change: Notably on April one we announced another key enhancements to our service offering with the launch of meaningful insights biotech analytics or member and innovative healthcare technology company servicing the pharmaceutical industry and our network by optimizing and personalizing health care treatments.
Speaker Change: <unk> curates and applause advanced artificial intelligence technologies to extract meaningful insights accelerating advances in cancer care and patient outcomes I'm very excited about the opportunity and impact. This platform will have in the oncology and brought our health care space and we see it as a way to further support and improve the utilization of our answer.
Speaker Change: <unk> services and the expansion of our clinical platform.
Speaker Change: Lastly, I'd like to highlight our strong engagement scores across all of our stakeholders as an organization. We demonstrated best in class net promoter scores of 75% or greater from our positions to members and most impressively over 90% from our patients.
Speaker Change: I am extremely grateful to our team and all the great work they do to create the best outcomes for our patients every day.
Speaker Change: Since our founding we've been disrupting the existing community oncology landscape in a cost effective and scalable way by growing our integrated care platform. We demonstrated our highly successful strategy of growing the business from our inception in 2018 to almost $1 3 billion in 2023 today, we partner with over 240 providers.
Speaker Change: Spanning 21 states plus the district of Columbia to ensure the delivery of high quality cutting edge cancer care to patients across the United States. We are excited to continue our momentum in 2020 for maximizing our growth improving efficiencies and continue to execute on our robust pipeline of opportunities.
Dave: Finally, I'd like to thank Dave for his contributions to Aon over the last several years, Dave has been instrumental in helping to set up a strong finance functions and help us become a public company as recently announced they will step down from me on this month with Dave Asghar, becoming our interim CFO and with that I'll turn the call over to Dave <unk> to provide.
Dave <unk>: More financial detail on our first quarter results.
Thanks, Todd and thank you to everyone for joining us on our call today I've truly enjoyed my time at <unk> and I'd like to thank Todd and the rest of the <unk> team for all the support over the last several years. So now let's dive into our quarterly results.
Speaker Change: Revenue was $364 3 million for the first quarter of 2024 as compared to $303 7 million for the year ago period, an increase of $66 million or 20%.
Speaker Change: The overall increase was primarily attributable to an increase in revenue per encounter a 12, 8% driving $59 7 million of the revenue increase and a $6 two increase in patient encounters between comparable periods driving $18 7 million of revenue increase during the first quarter cost of revenue increased $76 four.
Speaker Change: $354 9 million as compared to $278 5 million in the year ago period.
Speaker Change: The increase was primarily driven by Dragon medical supply costs due to increased patient encounters and increased cost per account their patient encounter volume growth increased cost of revenue by $14 9 million, while our cost per encounter drove a $42 $8 million increase the increase in cost of patient counters was driven.
Speaker Change: By a combination of higher drug and supply costs as well as drug and service mix patients required cost of revenue also include equity based compensation of $13 $3 million net.
Speaker Change: Net loss before non controlling interest was $24 9 million for the quarter of 2024 as compared to net loss before non controlling interest of $1 5 million for the first quarter of 2023, adjusted EBITDA was $2 million for the first quarter of 2024 as compared to $4 million for the year ago period, a decrease of $2 million.
Speaker Change: Moving on to our balance sheet and liquidity at the end of the first quarter. We had a total liquidity of $132 $7 million comprised of cash and cash equivalents of $74 9 million short term marketable securities of $30 1 million $26 7 million of incremental borrowing capacity under the.
Speaker Change: P&C loan facility and $1 million of incremental borrowing capacity under the PNC line of credit. We also had $81 3 million outstanding under the PNC loan facility bearing interest at seven 1% in the <unk> line of credit was Undrawn.
Speaker Change: Ill turn it back over to Todd for closing remarks.
Todd <unk>: Thank you Dave.
Todd <unk>: I'm proud of the progress we've made during this quarter with our continued expansion in existing markets as well as with the launch exciting launch of NEVA, which uses data to drive more accurate and personalized treatment plans for our patients today, we are better positioned to deliver high quality and affordable care to more patients in their communities and we will continue to make investments in our industry.
Speaker Change: Three leading platform of services to position us for ongoing future success.
Speaker Change: As the only true national oncology platform, we are excited to be the destination of choice for community oncology practices, enabling them to successfully grow and better treat patients and their community with that I'll turn it over to the operator to open the line for any questions.
Speaker Change: Thank you we will now be conducting a question and answer session.
Speaker Change: I'd like to ask a question. Please press star one on your telephone keypad confirmation tone will indicate that your line is another question.
Speaker Change: And you May press star two if you'd like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: One moment, please open the call for questions.
Okay.
Speaker Change: Yeah.
Speaker Change: Thank you.
Todd <unk>: I would like to turn the floor back to Todd <unk> for any closing comments.
Camilla: Thank you Camilla.
Todd <unk>: We are excited about the opportunities ahead of us and are committed to delivering value to our patients partners and shareholders. We look forward to updating you on our.
Todd <unk>: On our second quarter results on our next earnings call. Thank you for your time today.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time.
Speaker Change: You for your participation.
The next available conference specialist will be with you momentarily.
Okay.
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Speaker Change: Welcome to the Viva Conference Center the next available.
Speaker Change: Conference Center May have your name.
Andrew: Okay, Andrew in your company.
Andrew: And the call you'd like to join.
Andrew: Okay.
Speaker Change: I don't have American oncology as it could is it possible it's under something else.
Speaker Change: And let me check our larger American College he.
Speaker Change: I Wonder if it has an acronym maybe.
Speaker Change: Alright.
Speaker Change: Jamie.
Speaker Change: It's American express.
Speaker Change: Yeah.
Speaker Change: I don't have anything for the entire day under under that company name. It doesn't look like we've ever.
Speaker Change: Oh, Thank you Sir.
Speaker Change: We have allocated one hour for prepared remarks and Q&A.
Speaker Change: At this time I would like to turn the conference over to Dave <unk>, Chief Financial Officer at Aon.
Speaker Change: You may begin.
Speaker Change: Good morning, everyone and thank you for joining us to discuss American on column D networks first quarter of 2024 results before we begin we would like to remind you that this conference call may include forward looking statements. These statements, which are subject to various risks uncertainties and assumptions could cause our actual results to differ materially from our from these statements.
These risks uncertainties and assumptions are detailed in yesterday's press release as well as our filings with the SEC, which can be found on our website at investors Dot a oncology dot com, we undertake no obligation to revise or update any forward looking statements or information, except as required by law during.
Speaker Change: Our call today, we will also reference certain non-GAAP financial information such as adjusted EBITDA, which is derived from the closest GAAP measure net income we use these non-GAAP measures as we believe it supplements nearest GAAP measure and we believe it is useful for our investors presentation of this non-GAAP.
Speaker Change: Financial information is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with GAAP reconciliations of GAAP to non-GAAP measures can be found in yesterday's press release and in our SEC filings joining me on the call today is our CEO Todd <unk> following.
Speaker Change: Our prepared remarks, we'll open the call for your questions.
Dave: Thank you Dave Good morning, everyone. Thank you for joining us on our first quarter of 2024 earnings call I am pleased with our financial and operational performance as our momentum from the prior year has carried over into 2024.
Speaker Change: Diving in we continue to make great progress executing our growth plan and strategic priorities with the completion of two practice acquisitions during the first quarter and the announcement of two additional practice acquisitions. So far in the second quarter and the first quarter. We added 17, new providers to the Aon platform and a total of 40 year to date.
Speaker Change: <unk> has a differentiated offering to physicians, providing operational autonomy purchasing scale integrated pharmacy and lab centralized back office robust tech platform and aligned economic incentives is designed so that our practices in markets with a significant number of oncologists remain competitive and our practices of markets.
Speaker Change: With limited capacity can operate like larger practices and gain the benefit of scale.
Speaker Change: Consistent with our growth strategy, we expanded our presence during the quarter in our existing markets of Texas with the addition of Woodlands Cancer Institute in Maryland, with the Onboarding of Bay Hematology Oncology. In addition in early April we announced network growth with strategic expansions in Hawaii in Georgia to.
Speaker Change: The practices that we acquired in the quarter I've been able to immediately benefit from our integrated care platform that provides numerous novel advantages to patients and providers are key differentiators include a integrated in house clinical services like specialty pharmacy lab as well as our centralized operations and technology platform, which drive better practice economics reduce administrative burden.
Speaker Change: And allow physicians to focus on what is most important delivering high quality patient care.
Speaker Change: This straightforward with differentiated value proposition helps to fuel, our M&A pipeline and support our longer term growth strategy, notably.
Speaker Change: Notably on April one we announced another key enhancements to our service offering with the launch of meaningful insights biotech analytics or <unk>, an innovative healthcare technology company servicing the pharmaceutical industry and our network by optimizing and personalizing health care treatments.
Speaker Change: <unk> curates and applause advanced artificial intelligence technologies to extract meaningful insights accelerating advances in cancer care and patient outcomes I'm very excited about the opportunity and impact. This platform will have in the oncology and brought our health care space and we see it as a way to further support and improve the utilization of our answer.
Speaker Change: <unk> services and the expansion of our clinical platform.
Speaker Change: Lastly, I'd like to highlight our strong engagement scores across all of our stakeholders as an organization. We demonstrated best in class net promoter score of 75% or greater from our positions to members and most impressively over 90% from our patients.
Speaker Change: I'm extremely grateful to our team and all the great work they do to create the best outcomes for our patients every day.
Speaker Change: Since our founding we've been disrupting the existing community oncology landscape in a cost effective and scalable way by growing our integrated care platform. We demonstrated our highly successful strategy of growing the business from our inception in 2018 to almost $1 3 billion in 2023 today, we partnered with over 240 providers.
Speaker Change: Spanning 21 states plus the district of Columbia to ensure the delivery of high quality cutting edge cancer care to patients across the United States. We are excited to continue our momentum in 2020 for maximizing our growth improving efficiencies and continue to execute on our robust pipeline of opportunities.
Finally, I'd like to thank Dave for his contributions to Aon over the last several years, Dave has been instrumental in helping to set up a strong finance functions and help us become a public company as recently announced they will step down from me on this month with Dave Asghar, becoming our interim CFO and with that I'll turn the call over to Dave <unk> to provide.
Dave <unk>: More financial detail on our first quarter results.
Dave: Thanks, Todd and thank you to everyone for joining us on our call today I've truly enjoyed my time at <unk> and I'd like to thank Todd and the rest of the <unk> team for all the support over the last several years. So now let's dive into our quarterly results.
Dave: Revenue was $364 3 million for the first quarter of 2024 as compared to $303 7 million for the year ago period, an increase of $66 million or 20%.
Dave: The overall increase was primarily attributable to an increase in revenue per encounter a 12, 8% driving $59 7 million of the revenue increase and a $6 two increase in patient encounters between comparable periods driving $18 7 million of the revenue increase during the first quarter cost of revenue increased $76 four.
Dave: $354 9 million as compared to $278 5 million in the year ago period.
Dave: The increase was primarily driven by Dragon medical supply costs due to increased patient encounters and increased cost per encounter patient encounter volume growth increased cost of revenue by $14 9 million, while our cost per encounter drove a $42 8 million increase the increase in cost of patient counters was driven.
Dave: By a combination of higher drug and supply costs as well as drug and service mix patients required cost of revenue also include equity based compensation of $13 $3 million net.
Dave: Net loss before non controlling interest was $24 9 million for the quarter of 2024 as compared to net loss before non controlling interest of $1 5 million for the first quarter of 2023, adjusted EBITDA was $2 million for the first quarter of 2024 as compared to $4 million for the year ago period, a decrease of $2 million.
Dave: Moving on to our balance sheet and liquidity at the end of the first quarter. We had a total liquidity of $132 $7 million comprised of cash and cash equivalents of $74 9 million short term marketable securities of $30 1 million $26 7 million of incremental borrowing capacity under the PNC.
Dave: P&C loan facility and $1 million of incremental borrowing capacity under the PNC line of credit. We also had $81 3 million outstanding under the PNC loan facility bearing interest at seven 1% in the P&C in line of credit was Undrawn.
Speaker Change: I'll turn it back over to Todd for closing remarks.
Todd: Thank you Dave.
Todd: I'm proud of the progress that we've made during this quarter with our continued expansion in existing markets as well as with the launch exciting launch of NEVA, which uses data to drive more accurate and personalized treatment plans for patients today, we are better positioned to deliver high quality and affordable care to more patients in their communities and we will continue to make investments in our industry.
Todd: Leading platform of services to position us for ongoing future success.
Todd: As the only true national oncology platform, we are excited to be the destination of choice for community oncology practices, enabling them to successfully grow and better treat patients and their community with that I'll turn it over to the operator to open the line for any questions.
Speaker Change: Thank you we will now be conducting a question and answer session.
Speaker Change: Like to ask a question. Please press star one on your telephone keypad confirmation tone will indicate that your line is another question.
Speaker Change: And you May press star two if you'd like to remove your question from the queue.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: One moment, please open the call for questions.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: I would like to turn the floor back to Todd Shawn Harris for any closing comments.
Speaker Change: Yes.
Speaker Change: Thank you Camilla.
Speaker Change: We are excited about the opportunities ahead of us and are committed to delivering value to our patients partners and shareholders. We look forward to updating you on our.
Speaker Change: On our second quarter results on our next earnings call. Thank you for your time today.
Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time.
Speaker Change: You for your participation.