TOIIW — The Oncology Institute, Inc.

Summary of The Oncology Institute (TOIIW) Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Revenue: Q3 revenue reached $137 million, a 23% increase year-over-year, driven by a 42% growth in the Pharmacy segment and 13% growth in fee-for-service.
• Adjusted EBITDA: Loss of $3.5 million, an improvement of $4.7 million from Q3 2024. The company achieved its first month of adjusted EBITDA profitability in September 2025.
• Gross Profit: Total gross profit was $18.9 million with a gross margin of 13.9%. Excluding a $1.8 million reserve for fee-for-service revenue, normalized gross profit would have been $20.7 million (15.2% margin).
• Cash Position: Ended the quarter with $27.7 million in cash and $86 million in convertible debt maturing in 2027.

2. Strategic Updates and Business Highlights

• Capitation Model Expansion: Significant progress in Florida with 40,000 delegated capitated lives under management. Plans to expand this partnership with Elevance Health in Q4.
• Pharmacy Business: Continued record-setting performance, contributing $75.9 million in revenue, up 57.4% year-over-year.
• AI Integration: Launch of AI initiatives aimed at improving operational efficiencies, particularly in revenue cycle management and prior authorization processes, expected to save $2 million in operating expenses.
• Cybersecurity Incident: A recent incident at a key vendor caused temporary billing disruptions, but the company managed to minimize operational impacts and maintain patient treatment plans.

3. Forward Guidance and Outlook

• 2025 Revenue Guidance: Increased from $460-$480 million to $495-$505 million due to strong year-to-date performance.
• Adjusted EBITDA Guidance: Revised to a loss of $13 million to $11 million, indicating potential for breakeven or slight profitability in Q4.
• Free Cash Flow: Expected to be positive in Q4 2025, with full-year positive free cash flow anticipated in 2026.

4. Bad News, Challenges, or Points of Concern

• Cybersecurity Incident: Although managed effectively, the incident could impact collections in late Q4 and early Q1 2026.
• Fee-for-Service Revenue Reserve: The $1.8 million reserve for potential bad debt reflects a cautious approach but indicates potential risks in revenue recognition.
• Market Pressures: The healthcare landscape is evolving with changes in payer behavior, including Cigna's elimination of drug rebates and CMS's adjustments to prior authorization processes, which could affect operational dynamics.

5. Notable Q&A Insights

• Fee-for-Service Reserve: Clarified that the $1.8 million reserve impacted adjusted EBITDA, but normalized performance would have shown a smaller loss.
• Sustainability of Profitability: Management expressed confidence in maintaining profitability, with expectations for breakeven adjusted EBITDA in Q4.
• Delegated Contract Performance: The medical loss ratio (MLR) for the delegated model is in the mid-70s, with overall MLR for TOI in the high 60s, indicating effective management of care and costs.
• Impact of ACA Changes: Management does not foresee significant impacts from potential ACA changes on patient volumes, as most patients are already in capitated arrangements.

This summary encapsulates the key financial metrics, strategic initiatives, forward guidance, and notable insights from the Q&A, providing a balanced view of The Oncology Institute's performance and outlook.