Matthew Shea

Matthew Shea inquired about Privia Health's continued provider growth in existing markets, specifically asking for an update on sales momentum in Arizona and other noteworthy markets, and whether sales efforts differ between value-based care/ACO-only states and implemented provider states.

Answer

Parth Mehrotra, CEO of Privia Health Group, explained that Privia Health's core medical group business playbook is consistent across markets: dense delivery systems with community-based providers. In Arizona, strong sales momentum is driven by a sizable anchor partner (IMS), physician-to-physician referrals, and the state's favorable demographics. He noted that sales efforts differ for ACO-only versus full-stack models, with separate sales teams, but both offer ROI-driven value propositions and cross-sell opportunities, aiming to provide a full solution to physician practices.

Matthew Shea asked for more details on the strong sales momentum in Arizona and other noteworthy markets, and whether Privia Health's sales or growth efforts differ between value-based care/ACO-only states and implemented provider states.

Answer

Parth Mehrotra (CEO, Privia Health Group) explained that the core medical group business playbook is consistent across markets, focusing on dense delivery systems with community-based providers. In Arizona, a strong anchor group like IMS helps accelerate growth, leveraging physician-to-physician referrals and a favorable market with population growth and MA penetration. He noted that while there are separate sales teams for ACO-only versus full-stack models, both have ROI-driven value propositions and cross-sell opportunities, with the medical group offering a deeper discussion.

Matthew Shea asked for an update on which markets have been particularly strong for provider additions and how Privia is balancing growth in tenured markets versus newer ones.

Answer

CEO Parth Mehrotra noted that growth was broad-based across all states. He described a 'snowballing effect' where established presence improves referrals and lowers acquisition costs. He highlighted that even in their most mature markets, they have only penetrated about 10% of the TAM, and these markets are seeing a wave of late adopters joining Privia due to its consistent performance and market disruption.

Matthew Shea from Needham & Company asked if the high rate of referral-driven provider growth is changing the company's philosophy on new market expansion versus accelerating growth in existing markets, and how long the 'referral flywheel' takes to build in new markets.

Answer

CEO Parth Mehrotra responded that the company will be aggressive on all fronts, pursuing growth in both new and existing states to continue the flywheel effect. He explained that referral rates are highest in mature markets and that it takes time for this effect to develop in newer markets. However, referrals can also happen across markets as the company's success story spreads.

Matthew Shea requested an update on the 10% of Performance Suite contracts that have not yet migrated to the enhanced protections and risk corridors, and the company's long-term outlook for these specific contracts.

Answer

CEO Seth Blackley anticipates that almost all of the remaining 10% of Performance Suite contracts will eventually migrate to the enhanced model, aiming for a high 90s percentage. He believes this standardization will benefit both Evolent and its partners.

Matthew Shea inquired about the status and long-term strategy for the remaining 10% of Performance Suite contracts that have not yet migrated to the enhanced protections and risk corridors model.

Answer

CEO Seth Blackley stated that he expects almost all of the remaining 10% of Performance Suite contracts to eventually migrate to the enhanced model, aiming for a high 90s percentage, as it standardizes the structure for both partners and the company.

Matthew Shea of Needham & Company, LLC asked if there was much "go-get" remaining in the full-year 2025 guidance in terms of new customer signings, or if the forecast was largely based on existing and announced business.

Answer

CFO John Johnson provided a direct answer, stating that the "bucket is filled" for 2025. He clarified that any new launches not already announced would be incremental to the current year's guidance and that the focus is now on building the 2026 pipeline.

Matthew Shea from Needham inquired about demand in the commercial and employer market, asking if interest was primarily for surgical management solutions and whether this market required additional sales investments.

Answer

Executive Seth Blackley reported that demand is strong across all lines of business, with oncology being a key driver. He noted that since most commercial opportunities are with large, fully-insured health plans, they are addressed by the existing sales team during their regular conversations, requiring no incremental staffing.

Matthew Shea asked if the accelerated implementation of Auth Intelligence (Machinify) could bring forward AI-driven margin benefits and whether the strong demand environment is shortening deal cycles.

Answer

CFO John Johnson confirmed that positive early returns on efficiency and usability are the reason for accelerating the Auth Intelligence rollout to pull forward projected gross margin improvements. CEO Seth Blackley noted that while deal cycle duration has not changed dramatically, the overall scope and size of the sales pipeline has expanded significantly.

Matthew Shea of Needham & Company inquired about the drivers and durability of the observed strength in Docebo's mid-market segment and asked for an explanation for the recent dip in new customers adopting two or more use cases compared to the previous year.

Answer

CEO Alessio Artuffo attributed the mid-market success to improved segmentation, vertical focus (tech, healthcare, financial services), and new leadership, stating he expects the strength to be durable. Regarding multi-use case adoption, Artuffo explained that the slight decrease reflects a strategic optimization of sales velocity and initial deal size, where it is sometimes more productive to land with fewer use cases and expand over time.

Matthew Shea, on for Ryan MacDonald, asked why the company isn't ramping EBITDA margins more aggressively given the weaker macro environment. He also inquired about the slight dip in new customers adopting two or more use cases and how the sales team is incentivized to drive such deals.

Answer

CFO Brandon Farber explained that while EBITDA margins are guided to increase significantly in H2, the company is strategically investing in two key growth areas: the government go-to-market motion and the AI product roadmap. Regarding multi-use case deals, Farber stated that the primary goal is to land new customers successfully and then expand use cases over time to ensure stickiness, rather than forcing multiple use cases at the initial sale.

Matthew Shea of Needham & Company inquired about the sustainability of Busuu's B2B growth, questioning the reliance on channel partners versus direct sales. He also asked about the expansion of Chegg Study's institutional pilots and the timeline for them to become significant revenue contributors.

Answer

President & CEO Nathan Schultz explained that Busuu's B2B growth is driven by both a direct salesforce and key partnerships like Guild, expressing confidence in its durability. Regarding institutional pilots, Schultz stated the immediate focus is on conducting efficacy studies with the current 23 partners to prove Chegg's value, which will be the key to unlocking significant revenue in 2026 and beyond.

Matthew Shea of Needham & Company, on for Ryan MacDonald, asked about the ease of re-integrating excluded services into the DHA contract and the potential for selling new programs. He also requested an update on the broader government pipeline.

Answer

CEO Dr. Ido Schoenberg stated that adding the programs back would be nearly a 'flip of a switch' since they are already deployed and certified. He expressed strong optimism about the broader government opportunity, highlighting the successful partnership model with Leidos and Oracle as a validated, reproducible template for other government agencies.

Matthew Shea, on for Ryan MacDonald, pressure-tested the reiterated goal of achieving positive free cash flow in 2026, asking if this relies more on accelerated cost savings or higher growth expectations for 2026.

Answer

CFO & COO Mark Hirschhorn explained that the path to 2026 cash flow positivity depends on two factors. The primary plan assumes achieving double-digit revenue growth (11-20%) in 2026. However, if that growth does not materialize as expected, the company would accelerate its cost containment strategies to ensure it still reaches the cash flow breakeven target.

Matthew Shea of Needham & Company requested more detail on the favorable quality incentives, their expected durability, and the willingness of payers to expand these incentives in 2026 contracts.

Answer

CFO Jeff Schwaneke explained the favorability was related to strong 2024 performance and that agilon's high quality scores are a key strength. He noted that payers are increasingly willing to increase the dollar amounts tied to quality outcomes, and he expects this trend to continue into 2026 contract renewals, playing to agilon's strengths.

Matthew Shea inquired about the progress of clinical programs like heart health, asking if 2025 was an investment year for benefits in 2026 and how significant these programs would be for future medical margin.

Answer

CEO Steven Sell confirmed a strong focus on managing chronic diseases. He explained that for the new heart failure program, 2025 involves investment costs for early detection, with the financial benefits expected to materialize in 2026 and 2027. He noted the more mature PalliUM program is already having a significant dollar impact in 2025 and that these initiatives should be a nice tailwind for 2026.

Matthew Shea asked why the company was more successful than expected in reducing Part D exposure and what the long-term goal is for the remaining risk.

Answer

CEO Steven Sell stated the ultimate goal is to eliminate all Part D and supplemental benefit risk. He attributed the better-than-expected success to constructive, senior-level discussions with payor partners who value a stable, long-term relationship with a high-performing primary care model, especially in a challenging environment with fewer alternatives.

Matthew Shea of Needham & Company inquired about the qualitative outlook for fiscal 2026, asking if management's view on macroeconomic stabilization and abating headwinds had changed. He also questioned the demand drivers for Yext Social, particularly in the financial services and healthcare verticals.

Answer

CEO Michael Walrath confirmed that while the macro environment is unchanged, the urgency for brands to adapt to a fragmented AI search landscape is creating momentum. He noted that this trend, along with strong performance in the financial services and healthcare verticals, gives Yext an opportunity to overcome broader economic headwinds.

Matthew Shea, on for Ryan MacDonald, asked for details on MediFind campaigns, including their typical length, ROI trends versus expectations, and impact on the sales pipeline.

Answer

Executive Balaji Gandhi responded that specific details on MediFind campaign mechanics and ROI were not readily available but offered to follow up on the topic.

Asked about demand for the Learn Platform amid K-12 vendor consolidation, the timeline for the platform's higher-ed beta, and the outlook on college enrollments following recent FAFSA issues.

Answer

The company sees vendor consolidation in K-12 as a significant opportunity and is positioning its platform accordingly. The higher-ed beta for the Learn Platform is on track for the second half of the year. It is still too early for definitive feedback on college enrollments, but the long-term institutional focus remains on reaching more learners.