Q1 2025 The Oncology Institute Inc Earnings Call

Operator: Good afternoon and welcome to the Oncology Institute's first quarter 2025 earnings. Today's call is being recorded and we have allocated one hour for prepared remarks and Q&A.

Good afternoon, and welcome to the Encore Oncology Institute first quarter 'twenty 45 earnings conference call today's.

Today's call is being recorded and we've allocated one hour for prepared remarks and Q&A.

Operator: At this time, I'd like to turn the conference over.

Speaker Change: At this time I'd like to turn the conference over.

Mark Hueppelsheuser: Mark Hueppelsheuser, General Counsel at TOR. Thank you. You may be.

Speaker Change: Mark Apple Heizer.

Speaker Change: General Counsel appeal are.

Speaker Change: You may begin.

Mark Hueppelsheuser: The press release announcing the Oncology Institute's results for the first quarter of 2025 are available at the investor section of the company's website, theoncologyinstitute.com. A replay of this call will also be available at the company's website after the conclusion of this call.

Speaker Change: The press release announcing the oncology institutes results for the first quarter of 2025 are available at the investors section of the company's website, the oncology Institute Dot com.

Speaker Change: A replay of this call will also be available at the company's website. After the conclusion of this call.

Mark Hueppelsheuser: Before we get started, I would like to remind you of the company's safe harbor language included within the company's press release for the first quarter 2025. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For a further discussion of risks related to our business, see our filings with the SEC.

Speaker Change: Before we get started I would like to remind you of the company's safe Harbor language included within the company's press release for the first quarter 2025 management may make forward looking statements, including guidance and underlying assumptions forward looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially.

Speaker Change: For further discussion of risks related to our business see our filings with the SEC.

Mark Hueppelsheuser: This call will also discuss non-GAAP financial measures, such as adjusted EBITDA and free cash flow. Reconciliation of these non-GAAP measures to the most comparable GAAP measures are included in the earnings release furnished to the SEC and available on our website.

Speaker Change: This call will also discuss non-GAAP financial measures such as adjusted EBITDA and free cash flow reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in the earnings release furnished to the SEC and available on our website.

Mark Hueppelsheuser: Joining me on the call today is our CEO, Dan Virnich, and our CFO, Rob Carter. Following our prepared remarks, we'll open the call for your questions.

Speaker Change: Joining me on the call today is our CEO, Dan Vernick and our CFO Rob Carter.

Speaker Change: Following our prepared remarks, well open the call for your questions with that I'll turn the call over to that.

Dan Virnich: With that, I'll turn the call over to Dan. Thank you, Mark. Good afternoon, everyone, and thank you for joining our first quarter 2025 earnings call. Today, we will discuss first quarter 2025 results with a focus on our strong start to the year and momentum on our path to profitability and positive cash flow by the end of 2025. I'd like to start with some key updates on Q1 performance. I'm happy to report that revenue for Q1 increased by 10% versus the prior year period. This was driven by a few important factors. Our retail, pharmacy, and dispensary business continues to grow rapidly and set still records, contributing $49.3 million in revenue and over $9 million in gross profit in Q1 alone.

Dan Vernick: Thank you Mark.

Speaker Change: Good afternoon, everyone and thank you for joining our first quarter 2025 earnings call.

Speaker Change: Today, we will discuss first quarter 2025 results.

Speaker Change: On our strong start to the year and momentum on our path to profitability and positive cash flow by the end of 2025.

Speaker Change: I'd like to start with some key updates on Q1 performance.

Speaker Change: I'm happy to report that revenues for Q1 increased by 10% versus the prior year period. This was driven by a few important factors.

Speaker Change: Our retail pharmacy and dispensary business continues to grow rapidly in fact, bill record contributing $49 3 million revenue and over $9 million in gross profit in Q1 alone.

Dan Virnich: This business segment grew over 20% in the first quarter of 2025 versus prior years. As noted on our year-end call in March, we had a very strong start to the year with new capitated contract wins, adding over 80,000 lives in the first quarter on four agreements across the Florida, California, and Nevada markets. Anticipated new capitation contracts in the first half of 2025 are projected to add approximately $50 million in new revenue on an annualized basis. We started our first fully delegated capitation agreement with a major health plan in Florida on March 1st, where we are delegated for utilization management, claims, and network.

Speaker Change: This business segment grew over 20% in the first quarter of 2025 versus prior year.

Speaker Change: As noted on our year end call in March we had a very strong start to the year with new capitation contract wins, adding.

Speaker Change: Adding over 80000 lives in the first quarter on poor agreement across the Florida, California, and Nevada markets.

Speaker Change: Anticipated new capitation contracts in the first half 'twenty 25 are projected to add approximately 50 million in new revenue on an annualized basis.

Speaker Change: We started our first fully delegated capitation agreement with the major health plans in Florida on March 1st where we are delegated for utilization management claims and network.

Dan Virnich: This is going to be our preferred model for health plan relationships going forward, as it gives us differential ability to manage therapeutics with our MSO practice partners, as well as engage with them on future high value opportunities for TOI through our retail pharmacy and clinical trials program. We also signed a new capitation contract in Nevada during the first quarter, which adds over 80,000 Medicaid lives to Clark County with an effective date of July 1. Our fee-for-service business also returned to growth in the quarter, growing 9% quarter-over-quarter and 2% year-over-year, highlighting the impact of our investments in referral relationship management and call center expansion.

Speaker Change: This is going to be our preferred model for health plan relationships going forward I think is that differential ability to manage therapeutics with our MSL practice partners as well as engage with them on future high value opportunities for T O Y through our retail pharmacy and clinical trials program.

Speaker Change: We also signed a new capitation contract in Nevada during the first quarter, which adds over 80000 Medicaid lives Clark County, with an effective date of July one.

Speaker Change: Our fee for service business also returned to growth in the quarter growing 9% quarter over quarter, and 2% year over year, highlighting the impact of our investments in relationship management and call Center expansion.

Dan Virnich: Achieving profitability and our near-term path to positive free cash flow generation in Q4 remain the management team's north star. Some highlights from Q1 related to this effort include Adjusted EBITDA loss of $5.1 million, which is on the upper end of our guidance for the quarter. Gross profit of $17.2 million, which represents growth of 44.1% year over year. Continued acceleration of near-term capitation opportunities in the pipeline, with line of sight to an additional 100,000 lives with anticipated effective dates in Q2 and Q3. Focus on growing our radiation oncology and radiopharmaceutical segments, which will be accretive to fee-for-service margins.

Speaker Change: Achieving profitability and our near term path to positive free cash flow generation in Q4, we made the management team starts sharp.

Speaker Change: Some highlights from Q1 related to this effort include.

Speaker Change: Adjusted EBITDA loss of $5 1 million, which is on the upper end of our guidance for the quarter.

Speaker Change: Gross profit of $17 2 million, which represents growth of 44.1% year over year.

Speaker Change: Can you acceleration of near term capitation opportunities in the pipeline with line of sight to an additional 100000 lives with anticipated it back a day in Q2.

Speaker Change: In Q3.

Speaker Change: Okay on growing our radiation oncology and radiopharmaceutical segment, which will be accretive to fee for service margin.

Dan Virnich: Successful outsourcing of our Clinical Trials Program to Helios Clinical Trials. Helios will operate as a site management organization, and we believe their expertise will dramatically accelerate trials growth in existing and new markets in the second half of the year. However, the structure of the transaction will involve deconsolidating clinical research revenue from QI's income statement, which will modestly impact our full-year revenue, which Rob will discuss in more detail shortly. As it stands today, we are not currently projecting a negative impact to drug costs in 2025 related to recently announced tariffs, although we are carefully assessing country of origin for all therapeutics in our portfolio, ensuring we have optionality for all disease classes to protect our margins.

Speaker Change: Successful outsourcing about clinical trials for ran to Geely as clinical trials.

Speaker Change: You'll be able to operate at the site management organizations, we believe their expertise will dramatically accelerate trials growth in existing and new markets. The second half of the year. However, the structure of the transaction one ball you consolidate in clinical research revenue for Q1 income statement, which will modestly impact our full year revenue, which Rob will discuss in more detail shortly.

Speaker Change: As it stands today, we are not currently protecting a negative impact of drug costs in 2025 related to recently announced tariffs.

Speaker Change: Although we are carefully assessing country of origin for all therapeutics in our portfolio, ensuring we have optionality for all disease classes to protect our margins.

Dan Virnich: Finally, we successfully executed a partial pay-down of our convertible preferred debt of $20 million in Q1 with permanent elimination of our minimum cash covenant, followed by a capital raise that added $16 million back to our balance sheet. Combined, these transactions strengthen TOI's financial position and provide us with greater flexibility to execute on our strategic priorities.

Speaker Change: Finally, we successfully executed a partial pay down of our convertible preferred debt of $20 million in Q1 with permanent elimination of our minimum cash covenant followed by capital raised that added $16 million back to our balance sheet combined these transactions strengthen T y financial position.

Speaker Change: And provide us with greater flexibility to execute on our strategic priorities.

Dan Virnich: Finally, this afternoon, we announced that Dr. Jeff Langsam is joining the TOI team as Chief Clinical Officer. Jeff joins us from Cigna, where he led national efforts in oncology and specialty pharmacy, lending to his role at TOI, where he will lead our efforts around therapeutics, utilization management, and MSO practice engagement. The Chief Clinical Officer role was conceived as part of TOI's evolution in light of the increasingly complex drug and delegation landscape in which TOI operates, allowing us to further distance our capabilities and delivered value.

Speaker Change: Finally, this afternoon, we announced that Dr. Jeff Lang, the amaze, joining the T O I team as Chief clinical officer.

Speaker Change: Jeff joined Us from Cigna, where he led national effort in oncology and specialty pharmacy lending too as well with your wide where he will lead our efforts around therapeutics utilization management and M. S O practice engagement.

Speaker Change: The Chief clinical officer role was conceived as part of T O I's evolution.

Speaker Change: Might it be increasingly complex drug and delegation landscape in which T O I operate allowing us to further distance our capabilities and delivered value.

Dan Virnich: To this end, Dr. Langsam's role is designed as a net addition to TOI's central clinical infrastructure and is expected to remain collaborative, but ultimately distinct from that of TOI's chief medical officer, Dr. Yale Podness, who will continue to serve as the chief clinician overseeing our provider staff.

Speaker Change: To this end Doctor Lincoln's role is designed as a net addition, T O I's central clinical infrastructure.

Speaker Change: And is expected to remain collaborative, but ultimately distinct from that of July as Chief Medical Officer, Dr. Yale Partners.

Speaker Change: We will continue to serve as the chief clinician overseeing our providers that.

Dan Virnich: Last week, we also announced that TOI will be presenting clinical trial data at the American Society of Clinical Oncology, ASCO, annual meeting later this month, which demonstrates the value and effectiveness of TOI's clinical model at reducing cost of care while driving improvements in part A utilization for the patients that we serve.

Speaker Change: Last week, we also announced the T O I will be presenting clinical trial data at the American society of clinical oncology <unk>.

Speaker Change: <unk> annual meeting later, this month, which demonstrates the value and effectiveness of T like clinical model and reducing cost of care, while driving improvement in part of utilization for the patients that we serve.

Rob Carter: With that, I will turn the call over to Rob to provide additional details on our Q1 performance and 2025 outlook. Thanks, Dan, and good afternoon. Let's begin by reviewing our financial performance for the Consolidated Revenue for Q1 2025. was $104.4 million. an increase of 10.3% compared to Q1 2024. The increase in revenue was driven primarily by a 24.2% growth in TOI's dispensary segment due to continued growth in the attachment of prescriptions to our patient base. Notably, we saw our fee-for-service business return to growth during the first quarter, increasing 2.3% to $35.6 million in 2025 versus the prior year period.

Speaker Change: With that I will turn the call over to Rob to provide additional details on our Q1 performance and 2025 outlook.

Rob Carter: Thanks, Dan and good afternoon, everyone, let's begin by reviewing our financial performance for the quarter consolidated revenue for Q1 2025.

Speaker Change: $104 4 million.

Speaker Change: An increase of 10, 3% compared to Q1 2024.

Speaker Change: The increase in revenue was driven primarily by a 24, 2% growth in T. O I S. Dispensary segment due to continued growth in the attachment of prescriptions to our patient visits.

Speaker Change: Notably we saw our fee for service business returned to growth during the first quarter, increasing two 3% to $35 6 million.

Speaker Change: We were at 425 versus the prior year period.

Rob Carter: We are encouraged by the positive patient and referral feedback on TOI services. And our strong track record for high-quality care combined with our value-oriented model gives us confidence in our continued fee-for-service growth driven by patient choice and health system and community providers' patient referrals. Gross profit in Q1 of 2025 was $17.2 million, an increase of 44.1% compared to Q1 of 2025. This increase is attributed to improvement in revenue and margin in both capitation and fee-for-service within patient services. as well as improvement in both revenue and margin in TLI's dispensary segment. Margin improvement in the first quarter for both patient services and dispensary businesses is attributable to the recognition of a one-time rebate recognized over the fourth quarter of 2024 and first quarter of 2025 related to the renewal of a three-year contract with TOI's primary drug company.

Speaker Change: We are encouraged by the positive patient and if all feedback on Toi services at.

Speaker Change: Our strong track record for high quality care combined with our value oriented model gives us confidence in our continued fee for service growth driven by patient choice and health system HDD providers patient referrals.

Speaker Change: Gross profit in Q1 of 2025 was 17 2 million.

Speaker Change: An increase of 44, 1% compared to Q1 of 2020 for this increase is attributed to improvement in revenue and margin in both capitation fee for service with inpatient services as.

Speaker Change: As well as improvement in both revenue and margin and she likes dispensary segment.

Speaker Change: Margin improvement in the first quarter for both patient services and dispensary businesses is attributable to the recognition of a onetime rebates recognized over the fourth quarter of 2024 and first quarter of 2025.

Speaker Change: Related to the renewal of a three year contract with T O I's primary drug supplier issues.

Rob Carter: is not expected to occur in future quarters, although we do expect the benefit of drug price increases to improve over the course of 2020. SG&A, including depreciation and amortization, was $27.2 million in Q1 of 2025, a 9% decline compared to Q1 of 2024. As a percentage of revenue, SG&A, including depreciation and amortization, was 26% in the quarter, decreasing 560 basis points from Q1 of 2024. Loss from operations was $9.9 million, an improvement from an $18 million loss in Q1 of 2024. Net loss was $19.6 million in the quarter, an improvement of $303,000 compared to Q1 of 2024.

Speaker Change: This is not expected to recur in future quarters, Although we do expect the benefit of drug price increases to improve over the course of 2025.

Speaker Change: SG&A, including depreciation and amortization was $27 2 million in Q1 of 2025, 8% decline compared to Q1 of 2024.

Speaker Change: As a percentage of revenue SG&A, including depreciation and amortization was 26% in the quarter decreasing to 560 basis points from Q1 2024.

Speaker Change: Loss from operations was $9 9 million improvement from an $18 million loss in Q1 of 2024.

Speaker Change: Net loss was $19 6 million in the quarter, an improvement of 303000 compared to Q1 of 2024.

Rob Carter: Adjusted EBITDA was negative 5.1 million compared to negative 10.9 million in Q1 of 2024. Free cash flow was negative $3.9 million compared to negative $15.4 million in Q1 of 2020.

Adjusted EBITDA was negative $5 1 million compared to $10 9 billion.

Speaker Change: In Q1 of 'twenty 'twenty four.

Speaker Change: Free cash flow was negative $3 9 million compared to negative $15 4 million in Q1 of 2024.

Rob Carter: Moving to the balance sheet. As of the end of Q1 2025, our cash and cash equivalents balance was $39.8 million. This represents an increase of $3.7 million of cash and cash equivalents compared to Q1 of 2024. This is attributable to our capital raise completed in the first quarter, as well as efforts to maximize efficiencies in working capital, particularly in accounts receivable and inventory management. Also, we were able to reduce our principal balance on our senior secured convertible note through our debt pay down and debt to equity exchange agreement, reducing our quarterly cash interest payments by approximately $1 million annually.

Speaker Change: Moving to the balance sheet.

Speaker Change: As of the end of Q1, 2025, our cash and cash equivalents balance was $39 8 million, which.

Speaker Change: This represents an increase of $3 7 million of cash and cash equivalents compared to Q1 of 2024.

Speaker Change: This is attributable to our capital raise completed in the first quarter as well as efforts to maximize efficiencies in working capital, particularly in accounts receivable and inventory management.

Speaker Change: Also we were able to reduce our principal balance on our senior secured convertible note to our debt paydown in debt for equity exchange agreement, reducing our quarterly cash interest payments by approximately 1 million annually.

Rob Carter: As Dan mentioned, in the first quarter, we successfully closed a private placement that resulted in gross proceeds of approximately $16.5 million and further contributes to our prioritization of organic growth and building working capital and liquidity to fund TOI's ongoing growth. In conjunction with this transaction, a major shareholder entered into an exchange agreement whereby approximately 4.1 million of aggregate principal amount of senior security convertible notes were exchanged for common equivalent preferred stock and warrants for common.

Speaker Change: As Dan mentioned in the first quarter, we successfully closed a private placement.

Speaker Change: And gross proceeds of approximately $16 5 million and further contributes to our prioritization organic rates in building working capital and liquidity to find T O I's ongoing growth.

Speaker Change: In conjunction with this transaction as a major shareholder entered into an exchange agreement whereby approximately $4 1 million of aggregate principal amount.

Speaker Change: Senior secured convertible notes were exchanged for common equivalent preferred stock and warrants for common stock.

Rob Carter: Turning to guidance, following our strong first quarter results, we remain confident in our trajectory for the remainder of the year, and are reaffirming our fiscal year 2025 guidance. As Dan mentioned earlier, we are outsourcing our clinical trials business to Helios Clinical Trials. under the terms of the new arrangement. TOI will recognize revenue solely for our share of the profit, which will reduce our expected revenue for the year by $5 million. However, we are not revising our full year guidance as we anticipate the increased revenue from the dispensary segment will offset this. Therefore, we continue to expect revenue in the range of $460 to $480 million, adjusted EBITDA in the range of negative $8 million to negative $17 million, and pre-cash flow of negative $12 million to negative $21 million per year.

Speaker Change: Turning to guidance following our strong first quarter results, we remain confident in our trajectory for the remainder of the year and are reaffirming our fiscal year 2025 guidance.

Speaker Change: Dan mentioned earlier, you're outsourcing our clinical trials business to Helios clinical trials.

Speaker Change: Under the terms of the new arrangement.

Speaker Change: We'll recognize revenue solely for our share of the profit, which will reduce our expected revenue for the year by $5 million.

Speaker Change: However, we are not revising our full year guidance as we anticipate increased revenue from the dispensary segment will offset this impact.

Speaker Change: Therefore, we continue to expect revenue in the range of $460 million to $480 million adjusted EBITDA in the range of negative $8 million to negative 17 free.

Free cash flow of negative 12 million to negative 21 million for the year.

Rob Carter: Additionally, we remain on track to deliver positive adjusted EBITDA in the fourth quarter.

Speaker Change: Additionally, we remain on track to deliver positive adjusted EBITDA in the fourth quarter.

Rob Carter: We will also be providing select guidance for the second quarter of 2025. In Q2, we expect adjustability, but a loss will be in the range of negative 4 to negative 5. We expect the positive margin contribution of our fully delegated Florida contract combined with increased encounter volume in radiation oncology and continued growth in our dispensary segment will support the quarter-to-quarter improvements in adjusted EBITDA. All in all, we believe our execution to date with accelerating growth and improving profitability sets us up well to achieve our full year target.

Speaker Change: We will also be providing select guidance for the second quarter of 2025.

Speaker Change: In Q2, we expect adjusted EBITDA loss will be in the range of negative four to negative $5 million.

Speaker Change: We expect the positive margin contribution of our fully delegated Florida contract.

Speaker Change: And with increased encounter volume in radiation oncology and continued growth in our dispensary second icon will support the quarter to quarter improvements in adjusted EBITDA.

Speaker Change: All in all we believe our execution to date with accelerating growth and improving profitability sets us up well to achieve our full year targets.

Rob Carter: Before I wrap up, I'd like to briefly address two political headlines that have been topical On the topic of tariffs and any possible impact on TOI, as it currently stands, we have not observed any impact related to tariffs or drug price inflation, and our pricing catalogs are fixed through the second quarter with our support. We do not currently anticipate any trends in drug prices that will create risks to our guidance or business performance, but we are continuing to closely monitor the situation and we are actively evaluating country of origin for TOI supply chains. Importantly, due to TOI's significant experience actively managing drug formulary as a core capability of our value-based care model, we do believe our clinical team has the ability to mitigate any potential impact from terrorists on individual drugs or manufacturers.

Speaker Change: Before I wrap up I'd like to briefly address two political headlines that have been topical recently.

Speaker Change: On the topic of tariffs and any possible impact to you all as it currently stands we have not observed any impact related to tariffs for drug price inflation.

Speaker Change: Pricing catalogues are fixed through the second quarter with our suppliers.

Speaker Change: We do not currently anticipate any trends in drug prices that will create risks to our guidance or business performance, but we are continuing to closely monitor the situation and we are actively evaluating country of origin for T O y supply chain.

Speaker Change: Fortunately <unk> significant experience actively managing drug formulary as a core capability of our value based care model. We do believe our clinical team has the ability to mitigate any potential impact from tariffs individual drugs or manufacturers were to materialize.

Rob Carter: were to materialize.

Rob Carter: On the topic of executive orders related to pharmaceutical pricing practices. The size and scale of our capitated business where drug costs are inversely correlated with profit. The ability of TUI to control formulary in our clinics and influence formulary in our delegated network to manage drug pricing risk within clinical guidelines. and the multiple variables that contribute to fee-for-service and pharmacy drug margins, which constitute the spread between cost and reimbursement, rather than the absolute cost of the drug. This spread relationship may or may not be impacted by a knee-jerk pricing reform.

Speaker Change: On the topic of the executive orders related to pharmaceutical pricing practices.

Speaker Change: It's too early to draw any concrete conclusions on the ultimate outcome of drug regulation. We believe there are several factors that make T y less susceptible to drug pricing impacts.

Speaker Change: The size and scale of our cat potato business, where drug costs are inversely correlated with profits.

Speaker Change: The ability of <unk> to control formulary and I collection influenced formulary in our delegated network to manage drug pricing risk with any clinical guidelines.

Speaker Change: And the multiple variables that contribute to fee for service and pharmacy drug margins, which constitute the spread between cost and reimbursement rather than the absolute cost of the drugs themselves. This spread relationship may or may not be impacted by any drug pricing reform.

Dan Virnich: With that, I'll turn it back to Dan for closing. Thanks, Rob. Looking to the remainder of the year, we will continue to build on our momentum through strong operational management, increased efficiencies and strategic market expansion. As we discussed today, we are executing against a near-term path to sustained cash flow positivity and profitability in the second half of 2025, setting up wells to deliver profitable growth in 2026. Our organic fee-for-service growth, pharmacy attachment, and existing value-based contract pipeline give me confidence in our strong trajectory, supporting our progress against our strategic priorities. We appreciate the continued support of our shareholders and the great work from our team as we execute against our plan to drive long-term shareholder value.

Dan Vernick: With that I'll turn it back to Dan for closing comments.

Dan Vernick: Thanks, Rob looking to the remainder of the year, we will continue to build on our momentum very strong operational management increased efficiencies and strategic market expansion.

Dan Vernick: As we discussed today, we are executing against our near term path of sustained cash flow positivity and profitability in the second half of 2020 by setting up well to deliver profitable growth in 2026.

Dan Vernick: Our organic fee for service growth pharmacy attachment and existing value based contract pipeline give me confidence in our strong trajectory supporting our progress against our strategic priorities.

Dan Vernick: We appreciate the continued support of our shareholders and the great work from our team as we execute against our plan to drive long term shareholder value.

Operator: With that, we're now ready to take your questions. Operator. Thank you.

Dan Vernick: With that we're now ready to take your questions operator.

Dan Vernick: Thank you.

Operator: We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that you are in the question. You may press star 2 to remove yourself from the Participants using speaker equipment, it may be necessary to pick up a handset before pressing the start key. One moment while we poll for questions.

Speaker Change: We will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: From Asia tone will indicate that you're in the question queue. You May press star two to remove yourself from the queue for participants using speaker equipment. It may be necessary to pick up the handset before pressing the star keys.

Speaker Change: One moment, while we poll for questions.

David Larson: And our first question comes from David Larson with BTIG. Please proceed with your question. Hey, congratulations on a good start to the year. Can you talk a little bit about the gross profit growth of 44% year over year? What was the main driver of that?

Speaker Change: And our first question comes from David Larsen with BTG. Please proceed with your question.

David Larsen: Hey, congratulations on a good start to the year can you talk a little bit about the gross profit growth of 44% year over year. What was the main driver of that in my mind. That's that's obviously a very important metric considering my kind of I think for too.

David Larson: In my mind, that's that's obviously a very important metric, considering like, I think for 2024, gross profit actually may be declined by 9% year over year. So thanks very much driver of gross profit be great.

David Larsen: 24, gross profit actually maybe declined by 9% year over year. So.

David Larsen: Thanks, very much driver of gross profit would be great.

Rob Carter: Yeah, David, hey, this is Rob. Thanks for the question. So a couple things contributing to this. First off the bat is the one time rebate that we mentioned that was attributable to a new contract signed with our primary distributor. The second piece is that, as you know, our drug pricing changes quarterly. January is a big quarter for drug price changes. It was relatively favorable from what we've seen in previous years, so that combined with some nice volume increases, particularly on the dispensary side, contributed to the pickup and overall margin. How much was the rebate for, please?

Yeah, David Hey, this is Rob thanks for the question. So a couple of things contributing to this.

David Larsen: First off the bat is the onetime rebates that we mentioned.

Speaker Change: That was attributable to a new contract signed with our primary distributor.

Speaker Change: The second piece is that as you know a drug pricing changes quarterly January.

Speaker Change: Big quarter for drug price changes.

Speaker Change: It was relatively favorable from what we've seen in previous years.

Speaker Change: That combined with some nice volume increases, particularly on the dispensary side contributed to the tick up in overall margin.

Speaker Change: How much was the rebate for please.

Rob Carter: It was about $1.5 million. 1.5 million.

Speaker Change: It's about $1 5 million.

Speaker Change: 1.5 million okay.

David Larson: Okay. It looks like your gross profit on a year over year basis was up more than 5 million. So there was still a very good growth beyond that. Okay. And then can you talk a little bit about your fee-for-service revenue, please, your patient service revenue, like the cap revenue, was that down 1% year-over-year and fee-for-service was up 2% year-over-year? I guess I would have thought there would have been more growth than that. And do I see 81 clinics compared to 87 clinics in the year-ago period? Was there a change there? Any thoughts around the patient service revenue?

Speaker Change: It looks like your gross profit on a year over year basis was up more than 5 million. So there was still a very good growth.

Speaker Change: Okay.

And then can you talk a little bit about your fee for service revenue. Please your patient service revenue.

Speaker Change: The cap revenue was that down 1% year over year in fee for service was up 2% year over year, I guess I would've thought there would have been more growth than that and and do I see 81 clinics compared to 87 clinics in the year ago period was there was there a change there.

Speaker Change: And any thoughts around the patient service revenue was a little low.

David Larson: It looked a little bit light to me on a year-over-year basis.

Speaker Change: Like to me on a year over year basis.

Dan Virnich: Yeah, I'll start on the CAP side. So, as we've called out, the pipeline is robust, numerous launches. The most meaningful and impactful launched in March. That's the fully delegated contract in Florida. The impact of that will be seen to a much greater degree later in the year. Also, a couple other launches here in the next upcoming months that will also contribute significantly.

Yeah, I'll start on the cap side, so as we've called out the pipeline is robust numerous launches.

The most meaningful and impactful launched in March.

Speaker Change: Fully delegated contract in Florida, and the impact of that will be seen.

Speaker Change: Much greater degree later in the year.

Speaker Change: Also a couple of other launches.

Here in the next upcoming months that will also contribute significantly.

Dan Virnich: Hi, David. It's Dan Virnich. I can comment on the sites going from 87 to 81. Compared to this quarter a year ago, we closed a couple low-volume locations that were unprofitable for TOI, and you're seeing that reflected in the change from 87 to 81. However, I will call out that we've added over 30 additional MSO sites of care in the Florida market. So, if you move to this hybrid employee and MSO model in our delegated contract, that's our total available sites of care actually went up. Right.

Dan Bernake: Hi, David its Dan Bernake I can comment on the sites from 87 to 81.

Dan Bernake: Here too this quarter a year ago, we closed a couple of low volume locations that were unprofitable for T O I.

Dan Bernake: And youre seeing that reflected in the change from <unk> 87 to 81, However, I will call out that we've added over 30 additional msos types of care in the Florida market.

Dan Bernake: As you move to this hybrid employee MSL model delegating contracts are total available take actually went up.

David Larson: I'll take earnings growth over revenue growth all day long. So, okay, great.

Dan Bernake: Alright, I'll take earnings growth over revenue growth all day long so yeah. Okay.

Rob Carter: And then can you talk a little bit about your SG&A management? It looks like SG&A costs declined 11% year over year and by like around 600 basis points of revenue, which is obviously great. Just your thoughts in terms of like total SG&A savings expectations for 2025? Yeah, we remain committed to keeping SG&A roughly flat for 2025, which I think is important to note, given our overall projections on growth for the organization. We've been very disciplined at our approach related to vendor and labor management, and continue to seek ways to operate our business more efficiently. We have a number of initiatives going on on the technology side as well, where we are going to be looking to engage AgenTech AI in some key workflow processes over the next 12 to 18 months, which we believe will drive even greater efficiencies and manage down our SG&A as a percent of revenue.

Dan Bernake: Great.

Dan Bernake: And then.

Speaker Change: Can you talk a little bit about your SG&A management.

Speaker Change: It looks like SG&A cost declined 11% year over year and by like around 600 basis points of revenue, which is obviously great. Just what are your thoughts in terms of like total SG&A savings expectations for 2025.

Yeah, we remain committed to keeping SG&A roughly flat for 2025, which I think is important to note given our overall projections on growth for the organization, we've been very disciplined in our approach related to vendor and labor management.

Speaker Change: And continue to seek ways to operate our business more efficiently we have a number of initiatives going on in the technology side as well, where we are going to look to looking to engage and take AI and key workflow processes over the next 12 to 18 months, which we believe will drive even greater efficiencies and manage down our SG&A as a percent of revenue.

Rob Carter: Okay, and then in 2024, there was a pretty significant impact from DIR fees, I did not hear you mention those on this call. Are we now past DIR fees? Or is that still a potential headwind this year? No, we are past DIR fees. DIR fees, as they used to exist, no longer do. It's all priced as a point of sale. The impact that we saw last year was overall reimbursement pressure as that change went into effect. And so that's behind us and things are looking significantly better relative to last year. So that was a $15 million drag on revenue and EBITDA last year, and you have completely sort of lapped that.

Speaker Change: Okay and then in 2024, there was a pretty significant impact from DIR fees I did not hear you mentioned those on this call are we now past DIR fees or is that still.

Speaker Change: A potential headwind this year.

Speaker Change: No. We we are past DIR fees D rfps as they used to exist.

Speaker Change: No longer do.

It's all priced as a point of sale the impact we saw last year was our.

Overall reimbursement pressure is that change went into effect and so.

Speaker Change: That's behind Us and things.

Speaker Change: Things are looking at significantly better relative to last year.

Speaker Change: So that was a 15 million dollar drag on revenue and EBITDA last year and you have completely sort of lapped out is that correct.

Rob Carter: Is that correct? That's right. What we consider as dispensary margins going forward are steady states. Okay, good. And then there was one large payer contract that I think was maybe 11% of revenue that kind of disappeared in 2024. I think you've kind of fully lapped that. And what I'm also hearing from you is you're actually entering into, I think you highlighted four new arrangements this quarter, and we should see patient service revenue ramp as we progress through the year because of these new contracts. Is that correct? That's correct. Yeah, that was in reference to the new capitated contract signed as part of our value based arrangements.

Speaker Change: That's right that's right.

Speaker Change: What we consider as.

Speaker Change: Dispensary margins going forward are steady state.

Speaker Change: Okay, Good and then.

Speaker Change: There was one large payer contract that I think was maybe 11% of revenue.

Speaker Change: That kind of disappeared in 2024, I think you've kind of fully lapped that and what I'm also hearing from you is youre actually entering into I think you highlighted four new arrangements this quarter and we should see patient service revenue ramp as we progress through the year because of these.

Speaker Change: New contracts is that correct.

Speaker Change: That's correct, yeah that was in reference to the new capitation contracts signed as part of our value based arrangements, but all of those are tied to fee for service revenue that flows through our dispensary.

Rob Carter: But all those are tied to fee-for-service revenue that flows through our dispensary. And then we are seeing additional growth in just fee-for-service patient services.

Speaker Change: And then we are seeing additional broken just fee for service patient services revenue.

Rob Carter: Can you provide a little color around why that contract ended and just like the purpose of that question is, you know, is are there any other contracts in 25 that might be a risk to your relationship with some of the largest plants that you're working with? Yeah, that was a contract that was an old contract where we had kind of a mutually agreeable determination related to a number of just disputes. So we overall have a very stable contract portfolio, we've got an incredibly low historical contract turn rate, and do a lot to manage our client relationships and show the value that we provide.

Speaker Change: Can you provide a little color around why that contract ended in it and just like the purpose of that question. As you know is are there any other contracts and 25 that might be a risk how is your relationship with some of the largest plants.

Speaker Change: You're working with.

Speaker Change: Yeah Yeah.

Speaker Change: Had a contract that was no contract, where we had kind of a mutually agreeable termination related to number of just disputes.

Speaker Change: So it will be overall very stable contract portfolio, they've done incredibly low historical contract churn rate.

Speaker Change: And I do a lot to manage our client relationships and shut it out let me provide so I don't anticipate any likely that'd be terminated any progress you're making five.

Rob Carter: So I don't anticipate any, you know, likely likely terminations as we progress through 2025.

Rob Carter: Okay, and then do you have any thoughts on IV margins? I think I think that was a little bit of a headwind early last year. Just any any thoughts there? Yeah, similar to dispensary, what we've seen so far, based on new year pricing is favorable to what we were expecting, certainly favorable to 2024. The general progression that we see throughout the year is improvement in overall margin. And so things are going slightly better than planned there. Okay, that's, that's great.

Speaker Change: Okay, and then do you have any thoughts on I V margins I think I think that was a little bit of a headwind early last year, just any any thoughts there.

Speaker Change: Yeah, similar to dispensary, what we've seen so far based on your pricing is favorable to what we were expecting certainly favorable to 2024.

Speaker Change: The general progression that we see throughout the year is improvement in overall margin and so yeah things are doing slightly better than planned there.

Speaker Change: Okay.

Rob Carter: And then you mentioned, you know, tariffs, and this executive order, and then there's also the most favored nation clause, or, you know, executive order that may or may not get through. So if drug prices, let's say, go up by 25% across the board, is that good or is that bad for the Oncology Institute? Because higher drug prices would eventually result in more revenue and probably more margin for you in your fee-for-service book, is that correct? Yeah, yeah, that's accurate. and in dispensary. And it's mainly Medicare Part B as in Boyd, not Medicare Part D. Is that correct?

Speaker Change:

That's great and then Hugh you mentioned.

Speaker Change: With tariffs and this executive order and then there's also the most favored nation clause or executive order that may or may not get through.

Speaker Change: So if if drug prices, let's say go up by 25% across the board.

Speaker Change: Is that good or is that bad for the oncology Institute because higher drug prices would eventually result in <unk>.

Speaker Change: More revenue I'm, probably more margin for you in your fee for service book is that correct.

Speaker Change: Yeah, Yeah, that's exactly right.

Speaker Change: Andean dispensary, and it's mainly Medicare part B as in boy not Medicare part D is that correct.

Speaker Change: Okay.

Rob Carter: Sorry, mainly in terms of what? In terms of reimbursement for fee-for-service revenue and also, um, Yes, that's correct. I mean, hypothetically, it would have impact B and E. Okay.

Speaker Change: Sorry, mainly in terms of what.

Speaker Change: In terms of reimbursement for a fee for service revenue and also Hmm, yes. That's.

Speaker Change: Correct, I mean, hypothetically, what it would have impact be Andy.

Speaker Change: Okay.

David Larson: It looks like a pretty good quarter. Congrats on a good start to the year and thanks for taking my questions. I'll hop back in the queue. Thank you very much. We appreciate it. Thank you.

Speaker Change: Okay.

Speaker Change: Hum.

Speaker Change: It looks like a pretty good quarter congrats on a good start to the year and thanks for taking my questions and I'll hop back in the queue.

Speaker Change: Thanks, so much David.

Speaker Change: Got it.

Speaker Change: Thank you.

Yuan Zhi: And our next question comes from Yuan Zhi with B Riley Securities. Please proceed with your question. Thank you for taking our questions.

Speaker Change: Our next question comes from you on a Z with B Riley Securities. Please proceed with your question.

Speaker Change: Thank you for taking our questions maybe we can start with the recent report by United House.

Yuan Zhi: Maybe we can start with the recent report by UnitedHealth. It was reported that the seniors within their Medicare Advantage plan used health care services twice as much as last year. I want to check if you noticed a similar trend within oncology practice, or is it related to some other diseases or surgery practice? Yeah, I can't speak to what other drivers might be associated with that. What I can say is that we track that on a very close basis for the oncology care needs of the populations we serve. And, you know, we haven't seen a jump to the magnitude that United mentions.

Speaker Change: It was reported as off disease senior Aerospace engineer, a Medicare advantage plan used healthcare services twice as much last year I want to track if you'll notice just similar trends within oncology practice or is this really had to some other business days or surgery practice.

Speaker Change: Yeah, I can't speak to what other drivers might be associated with that what I can say is that we track that on a very close basis for the oncology care needs of the populations, we serve and we haven't seen a jump to 90 day, United mentioned I don't know if that's driven by other drugs.

Yuan Zhi: I don't know if that's driven by other drugs outside of oncology or other utilization trends, which have been more unfavorable than expected.

Part of oncology or other utilization trends, which have been more unfavorable than expected.

Yuan Zhi: Yeah, maybe a follow-up question here. So they also reported the enrolled patients are sicker. I guess my question is two-part. First, did you notice similar trends there? And two, when you negotiate a value-based contract with a payer, is it based on historical data from insurance companies? Or is it based on your own database and external surveys to reflect the latest patient profile? Yeah, so for the first part of the question, we haven't noticed a change in prevalence or average stage of cancer of patients we're treating, so that would correlate to a thicker population that hasn't pivoted that we've noticed.

Speaker Change: Maybe a follow up question here. So they also report.

Speaker Change: Even though the patients on CCAR I.

Speaker Change: I guess my question is two parts first if you do not have similar trends there too.

Speaker Change: Negotiate value based contracts, where the payer is database all historical data from the insurance companies or is it based on your own database and external surveys to reflect the latest patient profile.

Speaker Change: Yeah. So for the first part of the question.

Speaker Change: Haven't noticed a change in <unk> or our average stage of cancer patients we're treating.

Speaker Change: So yeah that would correlate to I think a population that hasn't pivoted that we've noticed in terms of pricing, we do that based off of historical utilization up through the most recent period before we make a contract with the fact that they are pretty recent trend on utilization and then we factor in a cost trend really.

Yuan Zhi: In terms of pricing, you know, we do that based off of historical utilization up through the most recent period before we make a contract go so we have a pretty recent trend on utilization, and then we factor in a cost trend related to historical drug price changes as well in our forward-looking utilization, so that's pretty real-time as far as how it's contributing to the pricing of our contract. Yep, got it.

Speaker Change: Two historical drug price changes as well.

Our forward looking utilization, so that's a pretty real time as far as how it's how it's contributing to the pricing of our contracts.

Yes got it.

Yuan Zhi: So on your new territory part, is there any metrics you can share on the progress to fill up the capacities in your Florida clinic, whether it is the lives under management in terms of overall capacity or patient encounters? I'm so sorry, Yuan, could you please repeat the first part of the question? Yeah, is there any metrics you can share on the progress to fill up capacities in your Florida clinic? Yeah, got it.

Speaker Change: On your new territory apart is there an <unk> per share all of their programs to fill out the capacity of our floor reduction.

Speaker Change: Rather it is the lives under management in terms of more capacity or patient encounters.

Speaker Change: I'm, so sorry, you're on could you. Please repeat the first part of the question.

Speaker Change: Is there any metrics you can share on the programs to.

Anthony you are already at our clinics.

Speaker Change: Next.

Speaker Change: Yeah, absolutely. So we track we project encounters by market and by that'd be detailed by clinic across our portfolio as we forecast each year and we are tracking right to plan in terms of.

Speaker Change: Capacity.

Speaker Change: Phil and both our legacy markets and then the newer markets like Florida. There is some additional upside we believe in the back half of this year related to some contract wins, which are in the pipeline, but not in the forecast.

Speaker Change: So all is going to plan as far as selling capacity.

Speaker Change: Yeah got it and maybe one last question from me just to clarify.

Yuan Zhi: And maybe one last question from me, just to clarify, do you aim to have a cash flow positivity and profitability in the second half of 2025 versus a 4Q 2025 from your last earnings call? And was there any change there? No change to guide. We expect full cash flow and adjusted EBITDA positivity in Q4 of 2025. Got it. Thank you. Thanks, Yuan. Thank you. And as a reminder, if you'd like to ask a question, please press star one on your telephone keypad, just star one.

Speaker Change: You aim to have more cash flow positivity on profitability in the second half or 175 MRSA.

Speaker Change: <unk> hundred five from your last earnings call and was there any change there.

Speaker Change: No change to guide, we expect a full cash flow and adjusted EBITDA positivity in Q4 of 2025.

Speaker Change: Got it thanks.

Speaker Change: Thanks, a lot.

Speaker Change: Thank you and as a reminder, if you'd like to ask a question. Please press star one on your telephone keypad Star one.

Bill Sutherland: Our next question comes from the line of Bill Sutherland with the Benchmark Company.

Speaker Change: Our next question comes from the line of Bill Sutherland with the Benchmark Company. Please proceed with your question.

Bill Sutherland: Please proceed with your questions. Thanks, Operator. Hey, guys. Thanks for taking the questions. Most of mine have been asked, but going back to a couple of the key business metrics, the slight decline in the lives under value-based contracts, is that related to that contract you were talking about that went away last year. Yeah, exactly. It's measured by lives. That is a decrease. But I would just keep in mind that there's a product mix in every contract, and that specific contract has a heavy predominance of Medi-Cal and commercial lives, which are high numbers, but low PMPM reimbursement typically, versus our newer markets where we're signing MA only contracts, which are lower lives, but higher reimbursement.

Speaker Change: Yeah.

Bill Sutherland: Thanks, Operator, hey, guys. Thanks.

Speaker Change: Thanks for taking the questions. Most of mine have been asked but I'm going back to a couple of the key business metrics. The slight decline in the lots under value based contracts is that related to that contract you are.

Bill Sutherland: Talking about.

Speaker Change: Cause went away last year.

Speaker Change: Yeah exactly as measured by lives that is a decrease but.

Speaker Change: I would just keep in mind that there is a product mix and every contract and that Sidney contract had a heavy predominance of meta calling commercial lives, which are high numbers, but low P. M. P M reimbursement typically versus a newer markets, where we're signing.

Speaker Change: They only contracts, which are lower lives that higher reimbursement.

Speaker Change: Got it.

Bill Sutherland: Any important renewals coming up as far as contracts? Nothing significant to mention, no, but we, you know, most of our relationships are multi-year, many of them date back over 10 years, they typically auto-renew, and then, yeah, there's no significant renewals in the near future.

Speaker Change: Hum.

Speaker Change:

Speaker Change: Important renewals coming up as far as contracts.

No nothing significant to mention now we are you know most of our relationships our multiyear many of them date back over 10 years.

Speaker Change: <unk> auto renew and then yes, there is no significant avenues in the near future.

Speaker Change: Yeah.

Bill Sutherland: And then the guidance for the year, is there any pipeline conversion that you need to execute to do the numbers or is it basically all set up? Yeah, we don't need any additional value-based contracts that are in the pipeline to achieve guidance. So any additional wins that are in the pipeline would be upside to what we've guided to.

Speaker Change: And then the guidance for the year is there any pipeline conversion that you need to execute to our to do the numbers or is it basically all set up at this point.

Speaker Change: Yeah, we we don't need any additional value based contracts that are in the pipeline to achieve guidance. So any additional wins that are in the pipeline would be upside to what we guided to.

Speaker Change: Okay.

Bill Sutherland: And finally, it's an interesting trend, and I'm not sure if it's not really part of your model, but keep hearing from health systems about trying to do more of the cancer cases in the home. everything else. How does that trend kind of segue with your business, if at all? Yeah, I mean, I think it would be a very positive trend for QI if more cancer care was delivered in the home. We work pretty closely with our payer partners in trying to find innovative ways to deliver therapeutics in the home. I'd say it's much easier, obviously, on the oral specialty medication side than it is with infusibles.

Speaker Change: And finally, it's interesting trends and I'm not sure. If it you know it's not really part of your.

Speaker Change: Model, but.

Speaker Change: Oh keep hearing from health systems that are trying to do more of a cancer cases in the home along with everything else, how does that trend kind of segue with your business if at all thanks.

Speaker Change: Yeah, I mean, I think it would be a very positive.

Speaker Change: Trend for Q I ask more cancer care was northern home E.

Speaker Change: Worked pretty closely with our payer partners and trying to find innovative ways to deliver.

<unk> therapeutics in the home I would say, it's much easier I can eat all.

Speaker Change: Specialty medications side than there is with infusible, but that being said you know.

Bill Sutherland: But that being said, you know, there's no reason why we can't achieve that in a future state. So, again, that gets back to our mission to deliver higher level care in the community and something we would definitely want to be a part of. Got it. Okay.

Speaker Change: Theres No reason why we can't achieve that as a future state. So again that gets back to our mission to deliver high level of care in the community and something we would definitely be a part of.

Speaker Change: Got it okay.

Bill Sutherland: A nice quarter. Thanks very much. Thanks, y'all.

Speaker Change: A nice a nice quarter, thanks very much.

Bill Sutherland: Thanks Bill.

Robert Leboyer: And our next question comes from Robert LeBoyer. with Noble Capital Markets. to see if it's your question. Thank you.

Speaker Change: And our next question comes from Robert Leboyer.

Speaker Change: With noble capital markets. Please proceed with your question.

Robert Leboyer: Congratulations on a nice quarter. My question has to do with the number of lives. covered by the managed care policy. The previous number was 1.9 million, it looks like you're adding 100,000 in the first and second quarter, and then another 80,000 in Nevada after July 1st. So, is that... just simply additive to the 1.9 or There's some more nuance. way to project the number of lives that are covered. No, it's additive. That's the right way of thinking about it. The nuance in terms of modeling the financial impact would be where those lives are located. And so, as we've talked about before in some of our material, there is a higher PMPM for contracts in Nevada and Florida than there is in California due to the overall cost of care.

Thank you.

Speaker Change: Gratulation is on a nice quarter.

Speaker Change: My question has to do with the number of lives.

Speaker Change: Under under contract and are covered by the managed care.

Speaker Change: Policies.

Speaker Change: The previous number was $1 9 million it looks like you.

Speaker Change: You're adding 100000 in the first and second quarter and then another 80000 in Nevada After July 1st.

Speaker Change: So.

Speaker Change: Is that.

Speaker Change: Just simply additive to the 1.9 or.

Is there some more nuanced.

Speaker Change: Way to project the number of lives that are covered.

Speaker Change: No. It's added if that's the right way of thinking about it the nuance in terms of modeling the financial impact would be where those lives are located.

Speaker Change: So as we've talked about before in some of our.

Speaker Change: Our our material there is a higher P. M. P M four contracts in Nevada, and Florida than there is in California due to the overall cost of care, so that would be the one nuance to consider.

Robert Leboyer: So that would be the one nuance to consider.

Robert Leboyer: Okay, great. And in terms of seasonality or any kind of other trends that you see throughout the year, have you noticed anything in the first quarter versus other quarters throughout the year at this point? Yes, so our first quarter is always seasonally the lowest in terms of encounter volume. And so that's part of the whole picture when you're looking at the full-year guide. We knew that it would be the lowest quarter in terms of revenue, the worst quarter in terms of adjusted even a loss. And so we expect to see progressive improvement quarter of quarter both due to seasonality as well as the addition of new contracts and lives and encounter growth.

Speaker Change: Okay, great and in terms of seasonality or any kind of other trends that you see throughout the year and have you noticed anything in the first quarter versus other quarters throughout the year at this point.

Speaker Change: Yeah. So our first quarter is always seasonally the lowest in terms of encounter volume.

Speaker Change: And so that's just part of the whole picture when Youre looking at the full year guide, we knew that it would be the lowest quarter in terms of revenue the worst quarter in terms of of adjusted EBIT loss and so we expect to see progressive improvement quarter over quarter both.

Speaker Change: Both due to seasonality as well as the addition of new contracts and lives and account growth.

Robert Leboyer: Okay, good. And just one last question. In terms of the top three, and clients that you have, what would be the percentage of each of the top three in terms of revenue? As a percent of cap revenue, it's probably about 20%. if you're looking at the top three countries.

Speaker Change: Okay. Good.

Speaker Change: And just one last question in terms of the.

Speaker Change: Three.

Speaker Change: Plans and clients that you have what would be the percentage of each of the top three in terms of revenues.

Speaker Change: Okay.

Speaker Change: As a percent of Caf revenue, it's probably about 20%.

Speaker Change: If youre looking at the top three contracts.

Robert Leboyer: Okay, great.

Speaker Change: Okay great.

Robert Leboyer: All right, thank you very much. Thank you.

Speaker Change: Alright, Thank you very much.

Speaker Change: Thank you Robert.

Operator: And as a reminder, this is your final chance to ask a question. If you would like to, please press star 1 on your telephone. Okay, no further questions at this time.

Speaker Change: Thank you and as a reminder, this is your final transact question. If you would like to please press star one on your telephone keypad.

Speaker Change: Well, Ken there are no further questions at this time and with that this does conclude today's teleconference. We thank you for your participation you may disconnect your lines at this time.

Operator: And with that, this does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this

Speaker Change: Yeah.

Okay.

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