Executive Summary

Q2 2025 results were not reported; ModivCare filed an NT 10‑Q on August 12 citing additional time needed for goodwill impairment testing and an Audit Committee investigation, and disclosed an expected goodwill impairment of not less than $250 million; management also indicated revenue, EBITDA, and adjusted EBITDA would be “significantly lower” versus prior year .
On August 20–22, ModivCare entered Chapter 11 with a comprehensive restructuring supported by >90% of first‑lien lenders and >70% of second‑lien noteholders; committed $100 million DIP financing, and announced an anticipated ~$1.1 billion funded debt reduction; Nasdaq commenced delisting proceedings with trading suspended August 28 .
Prior quarter trends: Q1 2025 service revenue fell 4.9% YoY to $650.7m with GAAP loss per share of $(3.52) and adjusted EBITDA of $32.6m; Q4 2024 service revenue was $702.8m, GAAP loss per share $(1.64), adjusted EBITDA $40.4m .
Operational catalysts: fee‑for‑service conversions (~~25% of revenue), contract repricing, and G&A cost‑out initiatives (~~$25m target) were emphasized as drivers to normalize cash flow and margins; however, the restructuring and delisting dynamics dominate near‑term equity risk/reward .

What Went Well and What Went Wrong

What Went Well

“Self‑service call‑to‑trip ratio reached 36.1%, up from 35% in Q4 and 31% a year ago,” supporting lower unit costs and improved on‑time performance (95.2%); missed trips fell 20% QoQ, aided by AI tools and automated intake/adjudication .
Two new NEMT Medicaid MCO contracts secured (Southwest and Pacific) with ~$52m annual contract value and expected ~$38m in‑year revenue contribution; four PCS agreements signed (2 national, 2 regional) .
Fee‑for‑service migrations (~25% of revenue) and April collection of a ~$30m 2024 receivable improved cash conversion predictability; objective is settlement <90 days .

What Went Wrong

Q2 2025 financials delayed (NT 10‑Q) due to goodwill impairment testing and Audit Committee investigation; management expects “significantly lower” revenue/EBITDA/adjusted EBITDA and an impairment ≥$250m .
NEMT contract attrition and MA membership churn continued weighing on Q1 revenue (-6.3% YoY in NEMT) and Monitoring growth; Q1 GAAP net loss widened to $50.4m driven by higher interest expense .
Chapter 11 filing and Nasdaq delisting notice materially elevate equity risk; while operations are expected to continue uninterrupted, trading moved off Nasdaq with anticipated OTC Pink quotation .

Financial Results

Q2 2025 not filed; comparison shown versus prior two quarters.

Metric	Q4 2024	Q1 2025	Q2 2025
Service Revenue ($USD Millions)	$702.8	$650.7	N/A – Form 10‑Q delayed
GAAP Net Income ($USD Millions)	$(23.5)	$(50.4)	N/A – pending impairment testing
GAAP Diluted EPS ($)	$(1.64)	$(3.52)	N/A
Adjusted EBITDA ($USD Millions)	$40.4	$32.6	N/A
Adjusted EPS ($)	$0.19	$(1.71)	N/A

Segment breakdown

Segment	Metric	Q4 2024	Q1 2025	Q2 2025
NEMT	Revenue ($mm)	$495.0	$449.0	N/A
NEMT	Adjusted EBITDA ($mm)	$27.6	$27.8	N/A
NEMT	Adjusted EBITDA Margin (%)	5.6%	6.2%	N/A
PCS	Revenue ($mm)	$186.6	$181.8	N/A
PCS	Adjusted EBITDA ($mm)	$17.5	$12.2	N/A
PCS	Adjusted EBITDA Margin (%)	9.4%	6.7%	N/A
Monitoring	Revenue ($mm)	$19.2	$18.1	N/A
Monitoring	Adjusted EBITDA ($mm)	$6.8	$5.2	N/A
Monitoring	Adjusted EBITDA Margin (%)	35.4%	28.8%	N/A

Key KPIs (NEMT)

KPI	Q4 2024	Q1 2025	Q2 2025
Total Paid Trips (thousands)	9,543	8,458	N/A
Avg Monthly Members (thousands)	29,382	23,554	N/A
Revenue per Member per Month ($)	$5.62	$6.35	N/A
Revenue per Trip ($)	$51.87	$53.09	N/A
Utilization (%)	10.8%	12.0%	N/A
Purchased Services per Trip ($)	$40.42	$40.69	N/A
Payroll and Other per Trip ($)	$5.67	$6.14	N/A
Total Service Expense per Trip ($)	$46.09	$46.83	N/A

Balance sheet and liquidity highlights (latest reported)

Cash and cash equivalents: $115.96m at March 31, 2025 .
Revolver fully drawn: $270.66m at March 31, 2025 .
Net contract receivables increased to $108.5m in Q1 from $95.2m in Q4; ~$30m collected in April 2025 .
Chapter 11 RSA contemplates $100m DIP and ~$1.1b funded debt reduction .

Guidance Changes

ModivCare did not provide formal 2025 guidance; below are operational targets/updates disclosed.

Metric	Period	Previous Guidance	Current Guidance/Update	Change
Formal Financial Guidance	FY2025	None provided (Q4’24, Q1’25)	None provided (Q2’25)	Maintained
G&A Cost Reduction	FY2025	>$20m annualized savings (Q1 PR)	~$25m annualized savings initiative launched in April (Q1 call)	Raised
Contract Structure	FY2025	Fee‑for‑service shift planned; ~25% converted by Q1’25	Continued migration; aim for <90‑day settlement cycles	Maintained trajectory
Liquidity/Capital	Q3–Q4’25	N/A	$100m DIP; reduce funded debt by ~$1.1b; up to $300m takeback term loans; potential $250m revolver post‑emergence	New (Restructuring)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Automation/digital	Call‑to‑trip 34% in Q4; cost per trip down to ~$40.42	Call‑to‑trip 36.1%; missed trips −20% QoQ; AI QA tools	Continued investment; focus amid restructuring	Improving operations; strategic priority maintained
Contract repricing	Shared‑risk repricing; fee‑for‑service preferred; ~25% revenue converted	Repricing ongoing; settlement <90 days target; $30m April collections	Ongoing; Chapter 11 to reset capital structure	Progressing; liquidity focus
NEMT pipeline/attrition	~$200m net attrition for 2025; $300m pipeline; strong state incumbency	2 new MCO contracts; 4 state renewals submitted	Q2 results delayed; operations to continue	Mixed; growth vs attrition
PCS execution	Centralization; Q4 adj. EBITDA $17.5m (incl. incentives)	Adj. EBITDA $12.2m; modest hours declines; cost saves	No Q2 data; operations to continue	Stable to soft
Monitoring	MA churn; LTSS stability; adj. EBITDA 35% margin in Q4	Q1 adj. EBITDA 29%; expansion into Medicaid programs	Operations to continue; Q2 pending	Margin resilient; modest growth
Capital/deleveraging	$75m term loan; $30m second lien notes planned; covenant holiday Q4’24–Q2’25	Emphasis on deleveraging and strategic alternatives	Chapter 11 RSA; DIP $100m; ~$1.1b debt reduction	Major step-change via restructuring

Management Commentary

“We are aligning our updates to 5 enterprise objectives: grow and retain core customers; digitize and automate; optimize for simplicity and scale; increase capital efficiency and advance deleveraging; deliver client‑centric supportive care” .
“In NEMT, we secured 2 new Medicaid managed care contracts… ~$52 million ACV with ~$38 million in‑year revenue contribution” .
“Self‑service call‑to‑trip ratio reached 36.1%… automated intake and adjudication contributed to 1.2% YoY reduction in unit costs… on‑time performance rose to 95.2%” .
“Company‑wide G&A reduction initiative targeting approximately $25 million in annualized savings” .
“We collected a large MCO contract receivable from 2024 of approximately $30 million… reflecting improved payer alignment” .
“We are not issuing formal guidance in 2025… focus on executing measurable initiatives” .
Restructuring: “Supermajority support… $100 million DIP… reduce total funded debt by approximately $1.1 billion… operations continue uninterrupted” .

Q&A Highlights

Cash flow cadence: large debt payments in Q2 and Q4 make quarterly CFO lumpy; focus on annual cash generation with working capital improvements; potential positive quarters outside payment months not specified .
Strategic alternatives: Deleveraging is top priority; sale processes guided by “patience and urgency” to maximize value .
G&A savings specifics: Primarily labor within corporate/shared services due to efficiency gains; ~$25m target .
NEMT metrics: Revenue per trip mix‑driven; expected to normalize; contract loss due to payer consolidation noted .

Estimates Context

S&P Global consensus estimates for Q2 2025 were unavailable due to data mapping issues; additionally, management did not issue formal guidance for 2025 and filed an NT 10‑Q indicating significantly lower revenue/EBITDA versus prior year and an expected goodwill impairment of at least $250m .
Given the Chapter 11 and delisting developments, near‑term estimate visibility is limited and likely to be revised materially as restructuring progresses .

Key Takeaways for Investors

Equity risk high: Chapter 11 RSA and Nasdaq delisting materially impair equity; trading moved off Nasdaq; capital structure reset could wipe out or dilute current shareholders materially .
Operations stable: Management expects uninterrupted operations in NEMT/PCS/Monitoring through restructuring; watch DIP milestones and liquidity disclosures .
Cash conversion improving: Fee‑for‑service migrations (~25% revenue), repricing, and collections (e.g., $30m in April) target <90‑day settlement, but Q2 figures are delayed and impairment pressure is significant .
Cost discipline: G&A cost‑out raised to ~$25m; automation continues to reduce unit costs and improve service KPIs (on‑time, complaints, missed trips) .
Contract dynamics: New MCO wins and state renewals offset attrition; monitor 2025 state RFPs and pricing resets to stabilize NEMT margins .
Near‑term focus: Track restructuring milestones (plan confirmation within ~90 days of petition, effective date within ~110 days), DIP usage, and any rights offering or take‑back facilities .
Trading stance: Near‑term equity trades on restructuring outcomes rather than fundamental EPS; bond/DIP investors drive the capital stack—equity holders should consider recovery scenarios and legal developments .

Additional Q2 2025‑Period Press Releases and Filings

Regained compliance with Nasdaq MVPHS on July 7 (MVPHS >$15m for 20 consecutive days) prior to Chapter 11 events .
NT 10‑Q (Aug 12): delayed filing; goodwill impairment testing; Audit Committee investigation; anticipated materially lower results YoY .
Chapter 11 RSA and DIP press release/8‑K (Aug 20–21) .
Nasdaq delisting notice press release/8‑K (Aug 22) .

Notes:

Q2 2025 earnings press release (8‑K 2.02) and earnings call transcript were not available; the company did not report Q2 results by the due date and filed an NT 10‑Q citing impairment testing and an Audit Committee investigation .

ModivCare Inc (MODV)·Q2 2025 Earnings Summary