The following is a summary of the ModivCare, Inc. (MODV) Q3 2024 Earnings Call Transcript:

Financial Performance:

• ModivCare reported Q3 2024 revenue of $702 million with a year-over-year increase driven by 5% PCS growth and 1% NEMT growth.

• Adjusted EBITDA was $43 million, reflecting continued operational improvements, higher margins in Remote Patient Monitoring, and cost savings in NEMT.

• Net loss was approximately $27 million, with adjusted net income of $6 million, or $0.45 per diluted share.

• Guidance for 2024 adjusted EBITDA was maintained in the range of $170 million to $180 million, with expectations for a 10% increase in 2025 adjusted EBITDA driven by membership growth, new contract wins, cost savings, and strategic initiatives.

Business Progress:

• ModivCare has made substantial progress in enhancing technology and automating processes to optimize costs, particularly in the NEMT segment.

• The company is shifting NEMT contracts towards fee-for-service arrangements aiming for improved cash flows and reduced payment delays.

• Continued focus on strategic renewals and expansions in state NEMT contracts, with a strong pipeline valued at $1.7 billion.

• In Personal Care Services, growth is propelled by rate increases and operational efficiencies following comprehensive transformations.

Opportunities:

• Fee-for-service contract transitions in NEMT are expected to provide more stable and predictable revenue streams.

• Anticipated rate increases and favorable regulatory environment in key states like Pennsylvania could improve profitability in the Personal Care Services segment.

• ModivCare's focus on technological enhancements and service diversification sets the stage for competitive advantages and market share gains.

Risks:

• Expected contraction in Medicare Advantage business could impact revenues, especially given its significance to NEMT and RPM segments.

• Challenges in the Medicaid redetermination process and health care utilization norms could create financial pressures and impact service delivery.

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