On August 7, 2024, ModivCare Inc (MODV, Financial) released its 8-K filing detailing its financial performance for the second quarter of 2024. ModivCare Inc is a technology-enabled healthcare services company that provides a suite of integrated supportive care solutions, including non-emergency medical transportation (NEMT), personal care services (PCS), and remote patient monitoring (RPM).
Performance Overview
For the second quarter of 2024, ModivCare Inc reported service revenue of $698.3 million, which remained consistent with the $699.1 million reported in the same quarter of 2023. However, the company posted a net loss of $128.9 million, or negative $9.07 per diluted common share, compared to a net loss of $190.9 million, or negative $13.47 per diluted common share, in the second quarter of 2023. The adjusted net loss was $0.4 million, or negative $0.03 per diluted common share, beating the analyst estimate of -$0.55 EPS.
Segment Performance
The NEMT segment, which generates the maximum revenue for the company, saw a slight decrease in revenue by $6.3 million or 1.3%. The PCS segment experienced growth, with revenue increasing by $6.3 million or 3.5%, while the RPM segment saw a minor decline of $0.2 million or 1.0% compared to the second quarter of 2023.
Financial Achievements and Challenges
Despite the consistent revenue, ModivCare Inc faced significant challenges, including a goodwill impairment charge of $105.3 million in the RPM segment. The company also reported an operating loss of $98.9 million, or 14.2% of revenue, compared to an operating loss of $175.8 million, or 25.1% of revenue, in the second quarter of 2023.
"Second quarter adjusted EBITDA of $45 million was driven by strong performance within our NEMT segment due to new business wins, upward repricing, and platform automation," stated L. Heath Sampson, President and CEO.
Adjusted EBITDA for the quarter was $45.4 million, or 6.5% of revenue, down from $52.4 million, or 7.5% of revenue, in the same period last year. The decrease in adjusted EBITDA was primarily due to lower performance in the PCS, RPM, and Corporate and Other segments.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Service Revenue | $698.3 million | $699.1 million |
| Net Loss | -$128.9 million | -$190.9 million |
| Adjusted EBITDA | $45.4 million | $52.4 million |
| Cash Used in Operating Activities | -$55.3 million | -$108.2 million |
Balance Sheet and Cash Flow
As of June 30, 2024, ModivCare Inc reported cash and cash equivalents of $10.5 million, up from $2.2 million at the end of 2023. The company also reported total assets of $1.68 billion and total liabilities of $1.67 billion. Cash used in operating activities during the quarter was $55.3 million, a significant improvement from $108.2 million used in the same period last year.
Guidance and Future Outlook
ModivCare Inc maintained its revenue guidance range for fiscal year 2024 but lowered its adjusted EBITDA guidance range to $185-$195 million from the previous range of $190-$210 million. The company cited increased costs associated with its personal care services transformation and lengthened settlement cycles as key factors impacting its financial outlook.
"Our top priority is to de-lever our balance sheet while executing our transformation strategy, optimizing our business operations, and exploring other opportunities," added Sampson.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from ModivCare Inc for further details.
