ModivCare Inc (MODV, Financial), a technology-enabled healthcare services company, released its financial results for the third quarter of 2023 on November 2, 2023. The company reported a 6.0% increase in service revenue, reaching $686.9 million compared to $647.8 million in the same quarter of the previous year. Despite this increase, the company experienced a net loss of $4.3 million or $0.30 per diluted common share.
Financial Performance and Highlights
ModivCare Inc (MODV, Financial) reported an adjusted EBITDA of $51.3 million and adjusted net income of $20.5 million. The company generated $53.5 million cash from operating activities during the quarter and free cash flow of $44.7 million. Contract receivables increased by $9.5 million to $129.3 million, and contract payables increased by $24.5 million to $133.6 million, resulting in net contract payables of $4.3 million as of September 30, 2023.
ModivCare Inc (MODV, Financial) also repaid $43.5 million on the $325.0 million revolving credit facility, reducing the balance drawn to $83.0 million as of September 30, 2023. The company won a total contract value (TCV) of $138.0 million of NEMT managed Medicaid during the third quarter of 2023.
CEO's Commentary
We're pleased to announce strong Q3 2023 results, highlighted by adjusted EBITDA of $51 million, $54 million of cash flow from operations, and $45 million of free cash flow," said L. Heath Sampson, President and CEO. "We have addressed internal inefficiencies in our operations and are now leveraging new technologies to deliver high quality care at a lower cost. The net result can be seen in our strong profitability and cash flow this quarter, which enabled us to reduce our outstanding revolver balance by one-third and improved our leverage ratio."
2023 Guidance
Despite the net loss in Q3 2023, ModivCare Inc (MODV, Financial) maintained its 2023 revenue and adjusted EBITDA guidance ranges. The company expects its revenue to be between $2,750 million and $2,800 million, and adjusted EBITDA to be between $200 million and $210 million.
Q3 2023 Results
For the third quarter of 2023, the company reported $686.9 million in revenue, a 6.0% increase from $647.8 million in the third quarter of 2022. The revenue growth was driven by a 9.7% increase in total paid trips in the NEMT segment and a 2.3% increase in hours worked in the personal care services segment.
Operating income was $12.0 million, or 1.8% of revenue, in the third quarter of 2023, compared to operating income of $12.4 million, or 1.9% of revenue, in the third quarter of 2022. Net loss in the third quarter of 2023 was $4.3 million, or $0.30 per diluted common share, compared to net loss of $28.5 million, or $2.03 per diluted common share, in the third quarter of 2022.
ModivCare Inc (MODV, Financial) will hold a conference call to discuss its financial results on Friday, November 3, 2023, at 8:30 a.m. ET.
Explore the complete 8-K earnings release (here) from ModivCare Inc for further details.
