TOI

Hello, and welcome everyone joining The Oncology Institute first quarter 2026 earnings call. It is now my pleasure to turn the meeting over to Minh Merchant, Chief Legal Officer. Please go ahead.

The press release announcing The Oncology Institute's results for the first quarter of 2026 are available at the Investor section of the company's website, theoncologyinstitute.com. A replay of this call will also be available at the company's website after the conclusion of this call. Before we get started, I'd like to remind you of the company's safe harbor language included within the company's press release for the first quarter of 2026. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risk and uncertainties that could cause actual results to differ materially. For a further discussion of risks related to our business, see our filings with the SEC. This call will also discuss non-GAAP financial measures, such as adjusted EBITDA and free cash flow.

Reconciliation of these non-GAAP measures to the most comparable GAAP measures are included in the earnings release furnished to the SEC and available on our website. Joining me on the call today are our CEO, Dan Virnich, and our CFO, Rob Carter. Following our prepared remarks, we'll open the call for your questions. With that, I'll turn the call over to Dan.

Thank you, Minh. Good afternoon, everyone, and thank you for joining our first quarter 2026 earnings call. I'm pleased to report a strong start to 2026 in the first quarter, driven by continued expansion and performance of our value-based contracts across markets and the ongoing growth of ancillary services, particularly our pharmacy business, which provides us with confidence to reaffirm our 2026 outlook for revenue and full year adjusted EBITDA profitability. As noted in our earnings release, we are also pleased to meaningfully update our free cash flow projections for the year to a positive range of $5 million-$15 million, reflecting our ongoing performance and improving economies of scale as we grow. None of this would be possible without the continued commitment to high-quality oncology care by our physicians and staff across the five states we operate in every day.

There are a few key highlights from the quarter that I would like to now review. First, revenue of $147 million was up 41% year-over-year, driven by strong capitated revenue growth and record performance from our specialty pharmacy business. Record Part D fills drove pharmacy revenue up 78% in the quarter compared to the first quarter of 2025, reflecting overall growth in patient encounters and continued operational execution on prescription fills. As a testament to the durability and replicability of our clinical model, we saved nearly $2 million in Medicare spending as part of the CMS Enhancing Oncology Model performance program in period 3, increasing the savings generated from the previous period while maintaining the high quality care we deliver to the members we serve in the community.

We believe this ongoing recognition from CMS underscores the clinical and economic value of TOI's integrated approach to oncology care applies to all patient populations, not just capitated members. Turning now to operations, I would like to walk through some key updates from the first quarter. Our work in Florida continues to be a critical proof point for our model in one of our newer markets, and I'm pleased to share meaningful progress on several fronts. We are now generating a profit in the Florida market. This is an important milestone that reflects the maturation of our capitated relationships in the state and validates the model we have been building. Our initial members under delegated capitation partnerships continue to show data points demonstrating excellent clinical outcomes, with MLR performing in line to slightly better than plan.

As a reminder, we target a mature MLR of approximately 85% for new delegated capitation contracts, and we are now achieving that with our 2025 effective contracts in South Florida. In terms of further near-term capitation growth, we anticipate expansion of existing plan partnerships across 11 additional counties for Medicare Advantage members in Q3, which will expand our TOI clinic and MSO network to cover effectively the entire Florida market to serve delegated capitation agreements across multiple health plans. This next phase of expansion encompassing Q3 will expand our total MA lives under delegated capitation arrangements to approximately 200,000 total lives across 25 total counties.

In addition to the capitated revenue associated with these new patients, this expansion is also expected to be a meaningful tailwind to our Part D pharmacy business as we capture the prescription volume, which will deliver faster, more convenient fills to our patients and value outside of capitation to our care partners. To effectively support these important patient populations, we anticipate opening seven new TOI clinics over the remainder of the year to ensure we are delivering the high-quality coordinated care that our patients deserve. We will also add meaningfully to our contracted provider footprint across the state. As I mentioned in our last call, we are preparing to launch our proprietary provider portal this summer, and I'm excited to share more detail on this important initiative. We see two primary benefits of the TOI portal.

First, it is designed to further strengthen contracted provider engagement and drive continued adherence to our clinical pathways and quality initiatives. Pathway adherence is a meaningful lever for MLR performance, and we believe this tool will be an important driver of ongoing improvement. Second, over time, we intend to use the portal to provide access to ancillary services, including Part D dispensing, clinical trials, and care navigation. All key components of our integrated care strategy and key profitability levers as we grow. There may also be an opportunity to pass on savings from our ancillary services to MSO providers, which will further drive engagement. Our specialty pharmacy business delivered an exceptional quarter and continues to be one of the strongest growth drivers across the enterprise.

We filled a record number of scripts in the first quarter, with specialty pharmacy revenue up 78% year-over-year at $87.5 million for the quarter, delivering $16.8 million of gross profit. This growth is being driven by a combination of higher patient volumes, continued optimization of pharmacy workflows across our network, as well as ongoing efforts to reduce avoidable leakage to outside pharmacies. Gross margin in our specialty pharmacy business also came in higher than anticipated in the quarter at 19.2%, driven primarily by efforts in TOI's procurement function to manage drug pricing strategy and capitalize on our developed central clinical infrastructure via formulary pathways within the pharmacy. This is an area where we continue to see the benefit of our scale and distributor relationships, which will only be further enhanced as we grow.

We are also working to expand pharmacy access in Florida to our delegated network members, which we believe broadens our ability to capture both Part D and B scripts from our delegated population. We expect this to be available in the second half of this year and view it as an incremental opportunity on top of our core Part D dispensing strategy, not contemplated in our annual revenue guidance. We continue to make meaningful progress on our AI-enabled operational initiatives this quarter. As a reminder, last year, we launched three AI integration efforts focused on revenue cycle management, prior-authorization services, and our patient call center. I'm pleased to report that we remain on track to achieve the $2 million in operating expense savings we outlined for 2026.

These initiatives are not just delivering cost efficiencies, they are also improving the experience for our patients, providers, and administrative teams. We expect to build on them as we continue to scale. Finally, I'm pleased to welcome Minh Merchant to the executive team as TOI's new Chief Legal Officer. Minh will oversee all legal, compliance, regulatory, and privacy matters as we continue to scale the platform. As a company that is expanding its managed care footprint, delegated arrangements, and operational complexity, having a seasoned legal and compliance leader at the table is critical. Minh is a great addition, and we look forward to the contributions she will make as we continue to grow and strengthen the executive team. In summary, we are off to a strong start in 2026.

Revenue growth of 41%, record pharmacy performance, profitability in Florida, and a growing pipeline of capitated lives gives us confidence that the momentum we built throughout 2025 is continuing into the new year. As we look ahead, our focus remains on operational execution and quality patient care, scaling our delegated capitation model, deepening payer partnerships, and continuing to invest in the technology and operational capabilities that will drive sustainable profitability over the long term. With that, I'll turn the call over to Rob to review the financials in more detail. Rob?

Hey, Dan. Good afternoon, everyone. I want to echo Dan's comments on the continued momentum we're building across the business as we progress through 2026. On the call today, I will review our first quarter financial results, provide an update on the balance sheet and liquidity, and close with our updated guidance and outlook. Turning to financial performance, total revenue for the first quarter was $147.4 million compared to $104.4 million in the prior-year period, representing 41.2% year-over-year growth, a continuation of the strong momentum we have been building. Patient services revenue, which includes both our capitated and fee-for-service arrangements, was $59.1 million, representing 40.1% of total revenue and an 11.3% year-over-year increase.

Within patient services, capitated revenue grew 54% year-over-year to $26.9 million, driven by new market momentum and the continued ramp of our delegated arrangements in Florida. Fee for service was $32.2 million. Down approximately 10% year-over-year, despite increasing visit volumes, reflecting the impact of mix driven by active drug formulary management, more conservative reserves against collections, and modest pricing pressure in the IV drug channel. Capitation now represents approximately 45.6% of patient services revenue, up from roughly 33% a year ago, underscoring the ongoing shift in our revenue mix toward value-based care. Specialty pharmacy revenue was $87.5 million, representing 59.4% of total revenue and growing 77.6% year-over-year.

This was driven by a 103% increase in the number of prescription fills, reflecting the continued strength in fill rates as we bring new capitated lives onto the platform, partly offset by approximately 12% decrease in average revenue per fill as our mix continues to evolve. Gross profit for the first quarter was $23.3 million, compared to $17.2 million in the first quarter of 2025, reflecting continued top line expansion across both segments. Overall gross margin was 15.8%, compared to 16.5% in the prior year. The roughly 80 basis point decline is primarily the result of a non-recurring rebate we recognized in the first quarter of last year, as well as the natively lower margin profile of the delegated business as it increases as a proportion of TOI revenue.

Patient services gross profit was $5.7 million, compared to $6 million in the first quarter of 2025. Patient services gross margin was 9.7% compared to 11.3% a year ago, a decrease of approximately 163 basis points. The year-over-year decline is primarily the result of new ramping delegated contracts and our aforementioned conservative fee-for-service reserve approach. Specialty pharmacy gross profit was $16.8 million, growing 78.1% year-over-year from $9.4 million in the prior-year period. Gross margin was essentially flat at 19.2% versus 19.1% a year ago, evidencing TOI's ability to maintain unit economics as the pharmacy scales its distribution and adapts to an evolving pricing environment, including the phase-in of the Inflation Reduction Act.

Our expanded utilization management program, which we refer to as TOI Pathways, now covers our entire drug portfolio, including the pharmacy, versus historically only our Part B drugs. This continues to support margin state stability, and we see further opportunity in this area as we increase scale. Turning to operating expenses, total SG&A for the first quarter was $28.2 million, or 19.1% of total revenue, compared to $25.4 million or 24.3% of revenue in the same period a year ago. That represents approximately a 520 basis point improvement year-over-year, reflecting continued cost discipline and the operating leverage inherent in our model as we continue to scale. We see further leverage ahead as we scale and are planning to launch AI pilots around prior-authorization automation and a next-generation call center later this year.

Adjusted EBITDA for the first quarter was a loss of $2.4 million, favorable to a loss of $5.1 million a year ago. As we noted on our call last quarter, Q1 is seasonally our most challenging period. Deductible resets and annual drug cost increases create natural headwinds that take time to work through. We are pleased with the year-over-year improvement and remain confident in delivering positive adjusted EBITDA for the full year, driven by the continued ramp of our Florida delegated arrangements, our growing specialty pharmacy platform, and our continued cost discipline and push towards AI and automation in our central operations. We ended the quarter with $30.3 million in cash and cash equivalents, compared to $33.6 million at year-end 2025.

Our senior secured convertible note principal outstanding was $85.9 million, unchanged from year-end, with a maturity date of August 9th, 2027. I want to note that we are in late-stage discussions regarding the refinance of the note and expect to provide an update during the second quarter. Operating cash flow for the quarter was -$2.3 million, compared to -$5 million in the first quarter of 2025, reflective of the operating losses during each of those respective periods. Turning to guidance, we are reiterating our full-year 2026 outlook for revenue, gross profit, and adjusted EBITDA, and are raising our free cash flow outlook to reflect favorable terms from vendor renegotiations as we continue to realize the benefits of our scale.

For the full year, we expect revenue of $630 million-$650 million, with approximately $150 million of capitated revenue. Gross profit of $97 million-$107 million. Adjusted EBITDA of $0 to +$9 million. Free cash flow is now in the range of +$5 million to $15 million, compared to our previous outlook of a loss of $15 million to +$5 million. For the second quarter, we anticipate adjusted EBITDA in the range of a loss of $1 million to +$1 million, reflecting seasonal improvement as deductibles are satisfied and the continued ramp of our Florida delegated lives. We expect momentum to build through the remainder of the year and remain confident in our commitment to full-year positive adjusted EBITDA.

With that, I'll turn the call over to Dan for his closing remarks. Dan.

Thank you, Rob. Thank you to everyone for your continued interest in the world-class community oncology solution we are building at TOI. I'm pleased to reaffirm our revenue and EBITDA guidance for the year, as well as meaningful improvements in free cash flow. Our initiatives on creating a world-class provider portal and using technology to drive OpEx efficiencies will continue to drive our story as a leader in high-quality coordinated oncology care while delivering profitability for shareholders. Before opening the call to questions, I want to thank our patients for putting their trust in our ability to deliver high-quality care and to thank our physicians, clinicians, and employees across The Oncology Institute. Their unwavering focus on delivering high-quality oncology care in the community is what continues to drive the progress we are seeing across the business. With that, I'll turn the call back to the operator for questions. Operator?

Thank you. At this time, we will open the floor for questions. If you'd like to ask a question, please press star one on your telephone keypad. To remove yourself from the queue, you may press star one. Again, that is star one to ask a question. We'll take our first question from David Larsen with BTIG. Please go ahead. Your line is open.

Hey, congratulations on another great quarter. Can you talk a little bit about your delegated risk arrangements in Florida? Did I hear you correctly when I think I heard you say you now cover the entire state. Then just any color around risk, like the trend, the medical expense trend, how it's performing relative to expectations? I think I heard you say that you're profitable in Florida. Thanks.

Hi, Dave. Thanks for the great questions. Regarding the first question, yes, we will be network adequate across 25 counties by the start of Q3 of this year, so July 1. That coincides with expansion of multiple health plan agreements, which in total encompass about 200,000 MA lives across those counties in the delegated capitation model. The MLR performance on the delegated capitation book of business, which you mentioned in the earnings call for the 2025 cohort is performing slightly better than our target MLR of 85%, which is a great data point. We'll continue to update that as these additional lives enter the risk cohort. Yes, on a four-wall EBITDA basis that Florida market is now profitable due to all this growth.

Daniel, I didn't quite hear the MLR percent. Did you say it was 85%? Slightly better than 85%?

That's correct. Yep.

Okay. Then, like, Evolent Health, for example, I think this morning reported an MLR of 93%. What, in your view, causes such a significant delta? Why are you performing so much better than them, in your opinion at a high level, without obviously having access to their data?

Yeah. I mean, I can't really speak to exactly why they would be at our level. There is obviously differences in the care delivery model with us having a hybrid employed and network care delivery approach and kind of very tight control over care delivery and patient experience in our employed clinics. I think that would be definitely one aspect of it, as well as the high engagement we're seeing on the network providers through our portal and pathway integration.

In the delegated model, are you bearing risk for Part D? Can you push those delegated lives through your own specialty pharmacy? If you don't bear risk, I would imagine that would be a benefit to your pharmacy.

Yes, exactly right. We only take risk on Part B, as in boy. Part D, as in dog, is fee-for-service revenue at that little bit over 19% margin that we called out, which flows through our pharmacies and dispensaries. Those sales apply to both capitated as well as non-capitated lives. It's an additional economic benefit to the capitated members coming to us for care. There is the additional added benefit of us having a pharmacy in that four practices in the network that deliver Part B, as in boy, medications which are part of our risk. We can deliver those at our pricing, which is beneficial given our scale.

Just one more. Sorry to keep asking questions. I'll hop back on the queue, but just one more. Did I hear you say you were talking to additional health plans in the Florida market beyond Elevance?

Yeah. We're talking to additional health plans in Florida as well as other markets as well for the delegated capitation model. We'll have additional updates for that in the next earnings call. We are seeing a lot of opportunity and momentum around that specific delegated capitation model kind of across markets.

Okay. Congrats on a great quarter. I'll hop back on the queue.

Thanks, Dave.

Thank you. We'll take our next question from Matthew Shea with Needham. Please go ahead. Your line is open.

Hey, thanks for taking the question and nice start to the year here, guys. You know, maybe first on dispensary. Really impressive growth there and sounds like volume driven by a mix of membership and continued attachment rates. I guess, any additional color there? Membership seems pretty self-explanatory. Maybe on the attachment rate side, are these coming in ahead of expectations? If so, my understanding is this is mostly driven by provider education. Is there anything you would call out on the provider education side that's been notable in helping drive this growth?

Hey, Matt, it's Rob. Yeah, attachment rate has exceeded our expectations in the year. You know, the workflow changes that we implemented last year, I think are continuing to pay dividends. That work progresses. I think as you look at the rest of the year, I think you can expect some subtle improvement quarter-over-quarter as we continue to refine those workflows and as additional value-based lives come onto the platform.

Okay. Got it. That's helpful. Maybe on the proprietary network portal, good to hear that that remains on track for the Q2 launch. As we think about the pacing of the rollout, I would assume that would be sort of a provider by provider, market by market. How should we think about the cadence of that, and where are you hoping to get to in terms of provider coverage by year end? Given it can strengthen the provider engagement and drive adherence to the clinical pathway, it seems like a nice lever to drive MLR. Curious if you've built in any financial benefits to the 2026 guide, or if we should think about it that as more of a 2027 event.

Yeah, absolutely. When we roll out the portal, which we're anticipating in Q3, that's going to be immediately accessible to 100% of the non-employed providers across our delegated contract network. Basically, all of Florida will have access to it in the MSO side of our business. We already see good adherence to pathways. Our care pathways for Part B medications by those providers, but I think this will drive additional adherence because it will just create additional visibility and control over those providers' ability to access our formulary and pathways. As you called out in the earnings call, the additional, I guess, P&L upside related to that portal, which we anticipate will happen this year, but is not contemplated in our current guidance, would be related to Part D fills.

Recall that our current Part D fills are all from our employed physician base. There are no Part D fills flowing through to our MSO providers. Through implementation of e-prescribing in the portal, and Part D formulary visibility. We hope to catch some Part D growth as well through our MSO network in the second half of this year. We haven't specifically guided to that or included in the forecast given, you know, timing as well as lack of visibility into attach rate on that.

Got it. That's super helpful clarification that the patient portal can help with that Part D. Maybe last one for me before I jump back in the queue. The 200,000 live target in Florida for July 1st, I guess thinking back to the last earnings call or sort of where I had you guys in Q1. I had 70,000 lives in the Elevance partnership and then 22,000 from Humana and CarePlus, so call it, you know, 90,000 lives and change. Maybe help me bridge the difference from there to 200,000 lives. Is that all Elevance? It sounded like maybe you alluded to some other payers in there as well. Just kinda trying to get a sense of, ultimately, what sort of wins drove that expansion?

Yeah. We've opted not to disclose the specific health plans as additional lives are coming through, but it's effectively an incremental 130,000 MA lives with major carriers in Florida.

Okay. Got it. I'll hop back in. Thanks.

Thanks, Matt.

Thank you. We'll take our next question from Yuan Zhi with B. Riley. Please go ahead.

Thank you for taking our questions. Congrats on a strong quarter. Maybe a question to Rob first. Can you give me more color on the substantial $20 million free cash flow improvement since the adjusted EBITDA and the gross margin guidance didn't change? Maybe especially comment on the timing of this cash flow improvement.

Yeah. Yeah. Thanks for the question. This is the direct result of negotiations that have been underway now for several months with some key suppliers, in particular on the drug side of things. This is an advantage that we have as we continue to grow and scale. We have, you know, opportunities for leverage. We're able to take advantage of that in a very meaningful way, very excited about the output there.

On the Florida expansion, do you right now have the have your fully owned clinics ready to enter all these 25 counties in Florida under the delegated model?

Yeah. Hi, Yuan. It's Dan. That is underway right now. We estimate by the time we go live with those additional lives that we'll have our clinics in place, you know, to adhere to our sort of ratio of employed clinics, MSO providers in the additional counties where we will be taking risks.

Got it. One last question on the specialty pharmacy. Can you clarify, are you able to dispense drugs outside of oncology, considering, you know, this patient may have other comorbidity or disease that may need other drugs?

Yeah. At this time, our specialty pharmacy really focuses on oncology-specific medications, both oncolytics as well as medications that support chemotherapy pathways or oncolytic pathways, exclusively. We don't prescribe for non-oncology conditions or non-hematology conditions.

Got it. I will hop back on the queue.

Thank you. Again, as a quick reminder if you'd like to ask a question, please press star one now. Our next question comes from Robert LeBoyer with NOBLE Capital Markets. Please go ahead. Your line is open.

Good afternoon, and congratulations on another nice quarter. My question has to do with the CMS Enhancing Oncology Model. You mentioned saving 2 million in Medicare spending as part of the program during one of the periods. Could you just elaborate on what the model measures and put the $2 million in perspective in terms of spending per patient, spending on the total? Maybe tie in the medical loss ratios. If there's any information on how that compares with other providers, that would be helpful too. Thanks.

Hi, Robert. Great question. The savings performance was in periods 2 and 3 of the Enhancing Oncology Model, which, as I think most people know, is the next iteration of the Oncology Care Model that CMMI had for a number of years. It's an episodic total cost of care risk model. A little bit different than Part D capitation, although the principles are the same, adherence to value-based therapeutics, and then implementation of our High-Value Cancer Care Program, which is specifically designed for Part A avoidance, which is part of the risk in the EOM Model. We don't have numbers off the top of our head in terms of MLR performance or total risk pool for that cohort. We can certainly, you know, follow up on that. All we have is that absolute savings amount at this time.

Okay, great. In terms of the portal that you mentioned, are there any particular things that you could point to or discuss in terms of how that would change the provider's actions or whether that would save money, keep them on track, monitor what they're doing, or just exactly how that would work?

Yeah, absolutely. The portal is meant to be a centralized hub for our utilization management efforts. All network providers that are helping serve our capitated partnerships in terms of patient care will be submitting their prior-authorizations for care into that portal to get a UM decision made by our medical directors. Once that decision is made. That authorization is approved, or there's a peer-to-peer, or a change request. It also offers a centralized hub where we've got a high degree of visibility into all of our pathways to help drive additional formulary adherence. As mentioned, it's got the added benefit of being a path to get network providers to engage in ancillary services like pharmacy and clinical trials.

Okay, great. Thank you very much.

Thanks, Robert.

Thank you. We'll take a follow-up question from Matthew Shea with Needham. Please go ahead.

Yeah. Thanks. Appreciate the follow-up. Maybe Dan, thinking longer term on AI and beyond 2026, sort of, you know, last quarter you noted you're just starting to scratch the surface on use cases and capabilities of agentic AI. That there were a number of sort of integration opportunities out into the future. Maybe as we think about you moving beyond those three initial buckets that you've highlighted for 2026, are there any other potential areas that are top of mind? As we think about you maybe going after some of those and looking out to the 2028 targets, is there anything contemplated in those targets in terms of AI efficiencies beyond sort of the initial $2 million that you've outlined for 2026?

Yeah. To hit the second question first, no, our long-range kind of forecast that we issued in January did not contemplate additional AI efficiencies, so very conservative. The $2 million that we forecast into 2026 is really just scratching the surface on integration into those three core functions: call center, RCM, and prior-auth. I mean, it's moving quickly in terms of the capabilities of agentic AI in all three of those functions, so I do believe there will be substantial opportunity to expand upon those savings and drive additional OpEx efficiencies over the next, you know, two years to three years.

Additional use cases at this point, we do believe there's a good use case in the care navigation side of what we do as well with our High-Value Cancer Care Program. It's kind of a, because it's highly protocolized, it's perfectly set up for that use case, which would obviously drive efficiencies in terms of labor costs to implement and scale that program over patients that are appropriate. I'm sure there's many others, but I'd say just even the three core use cases that we have going right now, we are far from maximizing the savings and sort of efficiency opportunity amongst those three.

Okay, great. Thanks.

Thank you. At this time, there are no further questions in queue. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Greetings, and welcome to The Oncology Institute Fourth Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark Hueppelsheuser, General Counsel. Thank you, sir. You may begin.

The press release announcing The Oncology Institute's results for the fourth quarter of 2025 are available at the Investors section of the company's website, theoncologyinstitute.com. A replay of this call will also be available at the company's website after the conclusion of this call. Before we get started, I would like to remind you of the company's safe harbor language included within the company's press release for the fourth quarter of 2025. Management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For a further discussion of risks related to our business, see our filings with the SEC. This call will also discuss non-GAAP financial measures such as adjusted EBITDA and free cash flow. Reconciliation of these non-GAAP measures to the most comparable GAAP measures are included in the earnings release furnished to the SEC and available on our website. Joining me on the call today are our CEO, Daniel Virnich; and our CFO, Rob Carter. Following our prepared remarks, we'll open up the call for your questions. With that, I'll turn the call over to Dan.

Thank you, Mark. Good afternoon, everyone, and thank you for joining our fourth quarter and full year 2025 earnings call. Before getting into the results, I want to start by thanking our physicians, clinicians and employees across The Oncology Institute. Their continued focus on delivering high-quality oncology care in the community is what drives the progress we are seeing across the business. Most importantly, the fourth quarter marked an important milestone being our first profitable quarter as a public company from an adjusted EBITDA perspective. Based on the momentum that we have built, we are reaffirming our expectation to achieve full year positive adjusted EBITDA in 2026. The biggest driver of this progress continues to be the expansion of our capitated care model, particularly through our delegated arrangements, which enables us to manage the oncology benefit more comprehensively while aligning incentives with our payer partners across markets and delivering quality clinical outcomes to the patients that we serve. Stepping back, 2025 was a very productive year for TOI and one where we made progress across multiple areas of the organization. From a financial perspective, we delivered strong top line growth with revenue increasing approximately 28% year-over-year and surpassing $500 million for the first time in our history. We continued expanding our capitated footprint, initiating 9 new capitated contracts during 2025 in California, Florida and Nevada, representing approximately 260,000 additional patient lives under management. Another key contributor to this growth was our Part D dispensing platform, which remains an important part of our integrated care model as we continue to increase prescription volumes and attachment rates within our network. This segment of our business reached almost $270 million in total revenue and contributed close to $50 million in gross profit for the full year. From an operating standpoint, we continue improving efficiency across the organization. SG&A declined 2% year-over-year, demonstrating the leverage in our model as we scale. During the year, we also outsourced our clinical trials operations, allowing our physicians and care teams to remain focused on delivering high-quality clinical care while still being able to direct our patients to the trials they need in our clinics and supporting more rapid growth and multi-market scalability. And finally, we strengthened our balance sheet during the year. We reduced debt on our convertible preferred note by $24 million and ended the year with $33.6 million in cash after experiencing positive free cash flow in Q4, giving us additional flexibility as we continue to grow the platform. Operationally, we also made meaningful progress expanding our care model. Our delegated capitation partnership with Elevance in Florida continued to ramp during the fourth quarter and remains on track to continue expansion across the state in 2026, which would more than double the current partnership. Today, we have approximately 70,000 lives under capitated arrangements within this partnership. Given the economics of our delegated model, it's also worth highlighting that delegated members represented less than 5% of total capitated lives at the end of 2025, but account for approximately 1/3 of our run rate capitated revenue, reflecting the higher PMPM structure associated with these arrangements and the high utilizing populations they service. In addition to Elevance, we also initiated capitation agreements with Humana and CarePlus in Florida during the fourth quarter, further expanding payer partnerships and representing approximately 22,000 additional MA lives in South Florida. Our Florida Oncology network platform also continued to grow with the number of participating providers increasing to approximately 207 physicians and advanced practice providers across our network, supporting what we refer to as our hybrid model of patient care, which allows us to treat our managed populations at a combination of TOI-affiliated as well as independent clinics and our employed clinics under our fully delegated network umbrella. Finally, from an organizational standpoint, we strengthened the leadership team substantially in 2025, with the additions of Jeffrey Langsam as Chief Clinical Officer; and Kristin England as Chief Administrative Officer. Both bring significant experience scaling healthcare organizations and will play an important role as we continue expanding our platform and executing on our growth strategy. As we move into 2026, our focus remains on continuing to scale and drive profitability in our value-based care platform so that we can serve more patients and payers across the country with high-quality oncology care while improving access to therapeutics and reducing the financial burden of that care. First, we expect continued strong growth in our delegated capitation model, having guided in January to over 80% growth in capitated revenue for the year. Second, we are preparing to launch a proprietary new network portal in Q2, which will further strengthen engagement with both our affiliated and independent providers. The platform will improve visibility into the utilization management pathways, support formulary adherence and help drive continued improvement in our medical loss ratio. Importantly, it will also help enable ancillary services engagement such as Part D dispensing adoption across our independent network providers, which remains a meaningful opportunity for incremental growth. Finally, we strengthened our Board of Directors in Q1 with the additions of Mark Stolper and Kim Tzoumakas. Mark brings significant financial leadership and public markets experience as the long-time CFO of RadNet, while Kim brings deep expertise in oncology and pharmacy services through her prior leadership roles as CEO of VytlOne and 21st Century Oncology, respectively. We believe both will add valuable perspectives as we continue scaling the organization. In summary, 2025 was a foundational year for TOI. We showed our ability to grow and manage industry-leading MLR performance under our delegated capitation model in Florida, set records in Part D pharmacy growth, derisked our balance sheet and recorded our first positive adjusted EBITDA quarter as a public company in the fourth quarter. As we enter 2026, our focus is on execution, and we believe we are well positioned to further expand payer partnerships and deliver sustainable profitability over the long term. With that, I'll turn the call over to Rob to review our financial results. Rob?

Thanks, Dan, and good afternoon, everyone. I want to echo Dan's comments on what was a significant year for TOI. In the fourth quarter, we continued to build momentum across both our fee-for-service and capitation businesses as well as dispensing while at the same time moving toward positive adjusted EBITDA. On today's call, I'll start by addressing the expected impact of the Inflation Reduction Act, then review our key financial highlights for 2025, walk through our fourth quarter results and finally discuss our guidance and outlook for 2026 and beyond. Regarding the Inflation Reduction Act, we expect the impact to IMBRUVICA in 2026 to be minor, representing an unfavorable impact of less than 1% of total pharmacy revenue and gross margin. Importantly, as IMBRUVICA and additional drugs are subject to maximum fair price negotiations under the IRA, we have multiple levers available to help offset this impact, including, but not limited to, optimization of our pharmacy mix via increased utilization of alternative therapies, a function which TOI has significant control over through our centralized utilization management process. Additionally, the reimbursement shift in certain disease state categories introduced by the IRA allows TOI an opportunity to leverage relationships with drug manufacturers and distributors to reassess category economics, discussions which are benefited by TOI's improving purchasing power as we scale as a drug purchasing organization. As a result of the foregoing, we do not expect the IRA specifically to materially alter the long-term economics or trajectory of our platform. Turning to full year 2025. The year marked meaningful operational and financial progress for TOI. We delivered revenue growth of approximately 27.8% year-over-year from $393.4 million to $502.7 million, driven by continued expansion in both patient volumes and services per patient. Our fee-for-service business grew 9% year-over-year, from $136.2 million to $148.5 million, while our capitation business grew 17.2% year-over-year, from $68.7 million to $80.5 million, driven primarily by the launch of our new delegation model in Florida, which I will expand on more in a moment. Pharmacy revenue grew 49.6% year-over-year, from $179.9 million to $269.2 million, primarily the result of improved attachment of prescriptions to our provider visits in both fee-for-service and capitation populations as well as reduced leakage of prescriptions written by TOI providers to outside specialty pharmacies. The successful launch of our new delegation model in Florida produced over $10 million in new capitated revenue in 2025 with an annualized run rate of approximately $50 million as we enter 2026. We believe this new delegated model enhances TOI's ability to efficiently scale in new markets while retaining our ability to both directly control clinical utilization as well as deliver our comprehensive oncology model to populations under the delegated contracts. We accomplished this by serving patients at a mix of network providers and TOI clinics, a dynamic you will hear us refer to as our hybrid model, because it utilizes both independent and captive providers in a hybridized deployment. This hybrid model allows us to optimize for MLR while balancing capital efficiency and operating leverage, all while delivering maximum savings and minimum time-to-launch and network disruption to our payer partners. Most importantly, we ended the year with positive adjusted EBITDA in the fourth quarter, reflecting the operating leverage embedded in our model and the progress we've made towards sustainable profitability. Turning to the fourth quarter. Results were consistent with the trends we've discussed throughout the year. Total revenue for the fourth quarter was $142 million compared to $100.3 million in the prior year period, representing a 41.6% year-over-year growth that was driven by continued patient growth and pharmacy contribution. Patient services revenue, which includes both capitation and fee-for-service arrangements, totaled $59.8 million, or 42.2% of total revenue and increased 19.2% year-over-year. Within the segment, fee-for-service contributed roughly 25.6% of total revenue and capitation accounted for 16.6%, reflecting the significant recurring nature of patient services revenue and steady patient volumes on which we layer new capitation contracts as well as a continuous expansion of our fee-for-service referral base. Pharmacy revenue was $81.4 million, representing 57.4% of total revenue and increased 71.1% year-over-year, driven by higher prescription volumes and expanded pharmacy attachment within our clinics, which was a key operational focus for us over the course of the year. Turning to gross profit. We reported $22.7 million for the quarter compared to $14.6 million in the fourth quarter of 2024. Gross margin was 16% versus 14.6% in the prior year period, reflecting a year-over-year margin increase of approximately 140 basis points. Patient services gross profit was $7.1 million, up from $4.5 million a year ago, representing a 59.5% year-over-year increase with a gross margin of 11.9%, up from 8.9% in the prior year. Pharmacy gross profit totaled $14.9 million compared to $8.1 million in the fourth quarter of 2024, an 84.7% year-over-year increase, driven by higher dispensing volumes and improved drug purchasing. Pharmacy gross margin increased over 130 basis points from the prior year to 18.3%, reflecting ongoing optimization in commercial drug procurement, reflecting a focus on leveraging TOI's increasing scale in supply chain operations. Turning to operating expenses. Excluding depreciation and amortization, the total SG&A was $28 million, or 19.7% of revenue compared to 24.8% of revenue, a reduction of over 500 basis points versus a year ago. The decrease in SG&A reflects continued cost discipline and operating leverage inherent in our model. Adjusted EBITDA was $147,000, improving from negative $7.8 million in the fourth quarter of 2024. We achieved positive adjusted EBITDA in the fourth quarter, a key milestone as we exit 2025. Turning to the balance sheet and cash flow. We ended the quarter with $33.6 million in cash and cash equivalents. Operating cash flow for the quarter was a positive $3.2 million, reflecting investments in drug inventory and working capital to support our scaling dispensing activity. Now turning to guidance. For full year 2026, we are reiterating guidance provided in January 2026 as follows: revenue in the range of $630 million to $650 million, approximately $150 million of capitated revenue; gross profit in the range of $97 million to $107 million; and adjusted EBITDA in the range of $0 million to $9 million; and free cash flow in the range of negative $15 million to $5 million. I want to highlight that the first quarter is seasonally our lowest due to patient deductible resets and annual drug price increases that are not immediately reflected in reimbursement rates as pharmaceutical reimbursement adjustments operate on a lagged basis for pricing. While we always worked hard to mitigate these 2 factors, naturally lead us to anticipate an adjusted EBITDA loss for the first quarter. Based on these factors, we anticipate first quarter adjusted EBITDA to be between a loss of $3 million to $1 million with continued momentum over the course of the year. On a year-over-year comparison basis, the first quarter of 2025 included a onetime benefit of $1.6 million based on a renegotiated drug distribution agreement. On the pharmacy side, we are assuming performance in line with the second half 2025 revenue run rate of approximately $27 million per month, plus a modest incremental growth of 3% to 5% from attachment to new capitation lives we are capturing in TOI clinics through 2026. We believe this capture of capitation lives in TOI clinics is the beginning of a multiyear penetration narrative as we optimize TOI's captive clinic footprint relative to network providers for populations managed under our delegated model, as previously discussed, as part of our hybrid strategy. With respect to overall capitation growth, our outlook remains measured and does not include any contribution from new go-get contract wins. Gross profit is expected to grow slightly ahead of revenue, with gross margins improving by 100 to 200 basis points, primarily the result of improving direct medical expenses in relation to revenue, which is principally supported by improvement in drug spend, the result of our focus on both commercial procurement and clinical utilization management. SG&A is expected to trend down modestly as a percentage of revenue to approximately 16%, reflecting operating leverage, though we will continue to prioritize our growth initiatives. As we invest for growth, we remain focused on capital discipline and cash generation. We expect to achieve free cash flow positivity by end of 2026, supported by EBITDA growth and improving working capital dynamics. With that, I'll turn the call over to Dan for closing remarks.

Thanks, Rob. In closing, 2025 represented an important step forward for TOI. We delivered impressive growth, strengthened our balance sheet and exited the year with positive adjusted EBITDA while expanding the number of patients across the country that come to us for high-quality cancer care in the communities that we serve. As we look ahead, our guidance reflects a prudent and disciplined approach while still positioning the company to invest in growth and unlock the long-term value of our platform. With that, I'll turn the call back to the operator for questions. Operator?

[Operator Instructions] The first question comes from David Larsen with BTIG.

Congratulations on the good quarter and year. I guess for your dispensing revenue in the quarter, it came in a lot higher than what we were modeling. Just any thoughts or color around the driver of that and what we should expect for '26?

Dave, thanks for the great question. Yes, the fourth quarter was a very strong quarter in terms of dispensing revenue and performance, and that was really driven by 2 things. One was ongoing operational execution in terms of mitigating leakage of scripts outside of our pharmacies and dispensaries where we could still be medication. Two was very strong patient encounter growth related to our capitated contract growth across markets.

Okay. And then did I hear you say that you're going to double the size of your Elevance contract in the state of Florida in '26?

Yes, that's our goal.

Okay. And then is the Humana contract, is that a new contract signed in the fourth quarter or in the first quarter? You did not have a deal with Humana previously. Is that correct?

Yes, that went effective in the fourth quarter, and that was for both Humana and CarePlus for Medicare Advantage lives in South Florida on behalf of risk-bearing medical groups that they partner with.

Could you just give us a sense for the size of, I guess, the TAM for Elevance or Humana? Like how much revenue or how many lives could you potentially grow into in those states for Elevance and Humana alone? I would imagine it's pretty significant.

Yes. I mean there's publicly available data on MA penetration in Florida by payer, which, if you look at that versus our current capitated book across the payers that we partner with in that state, is many multiples of our current capitated revenue. So just tremendous opportunity. And really what excites us a lot about that market is many, many years ahead of growth for TOI as we continue to execute.

Okay. And then just one more quick one for me before I hop back in the queue. For the capitated revenue, how are your margins looking? And how are volumes and cost trend looking relative to expectations, I guess, for both the fourth quarter and the first couple of months of '26?

Dave, it's Rob. Performance, both in terms of volume and MLR is coming in exactly as we expect it to be. As you know, we have real-time views into our claims. And so our ability to manage that MLR is materially higher than what you see in the market. So no surprises right now, things are looking quite good.

And then for the lives that started in 4Q of '25, would you expect to get to, say, an 85% MLR by late '26? Is that fair?

So we have 2 types of contracts. For the delegated contracts that launched in Florida, yes, I think that's fair, 85% MLR. Within the contracts that launched were also some narrow network contracts in California, and we would expect, as we mentioned in our earnings material, a lower MLR with a slightly faster ramp to that MLR as well.

And then do the plans prefer the narrow networks or the broader networks? Do they have a preference? Just any color there would be helpful.

Yes, absolutely. It's really 2 different customer types. So plans, for the most part, is our delegated capitation model where they prefer a network that is open, inclusive of both our TOI employed clinics as well as the oncology network that we contract and own after delegation. The narrow network legacy capitation model really applies to our customers that are risk-bearing medical groups with the Knox-Keene license that, again, for fully narrowing the network to one oncology provider.

The next question comes from Yuan Zhi with B. Riley.

Rob or Dan, based on the guidance, you will have a meaningful growth in the capitated contracts in 2026, almost double there. As you ramp up the capitated contracts in delegated network, should we anticipate a dip in profit margin in mid-2026 because of this patient transition period?

Yes. Rob, could you try that?

Yes. Yuan, it's Rob. Yes, specific to the delegated contracts, yes. Yes. You'll probably see a slightly higher MLR, again, just specific to those contracts. As it relates to total weighted gross margin percentage, no, I don't think that you're going to see a dip at that aggregate level.

Got it. And then on the press release, I think the latest number of affiliated and network clinics are 146. Can you share more details of that? I think the last number we saw was 86.

Yes. So yes, absolutely. So we got our 80 employed sites of care across 5 states. The network is actually larger than that. So it's over 200 by headcount in the network in Florida now, brings our total up close to 300 combined.

Got it. And then one last question related to the CAR T. I think in last June, the FDA removed the Risk Evaluation and Mitigation Strategy, the REMS, requirements for all currently approved CAR T therapies. Is your -- so in your next contract updating and signing, do you think or do you anticipate that you will need to add CAR T into your treatment offerings or contracts? Or have you thought about that?

No. We across the board do not take risk on CAR T simply because it is a very low incidence therapy and then not offered currently in a high number of locations in the community. There are some interesting businesses out there that are trying to develop models for CAR T therapy in the community. We view that as very positive for patients if that were to happen in the future. And certainly expanding access if the utilization and indications for that therapy grow over time, is definitely something we would consider adding to our value-based contracting platform. But as of right now, we do not take risk on CAR T.

The next question comes from Matthew Shea with Needham & Company.

Congrats on a strong finish to the year here. Wanted to start with maybe double-clicking on the wins in the quarter. So one of the deals with Humana and CarePlus. Anything you can share on those deals? Were those competitive processes? And I believe Humana represents an expansion deal. So any commentary on how success with the prior markets led to expansion would be helpful. And for CarePlus, I believe that's a net new logo. So I would love to hear if they were managing -- or how they were managing oncology prior? And ultimately, how do they land on TOI?

Yes. Matt, thanks for -- that's a great question. Yes. So both actually -- the patients that we have now capitated through Humana and CarePlus are net new payer partner adds. They're both in Florida, in South Florida specifically. Those are Medicare Advantage populations delegated to risk-bearing medical groups that they partner with in that market. And as far as the incumbent oncology provider for those populations, we can't really comment on that, but I will say that the reason why we were able to win that business was again sort of our reputation for providing access and high-quality care and really coordinating closely with referring primary care physicians, which is what led to sort of the initial outreach. But we're really excited about both of those relationships and our partnerships with their risk-bearing medical group constituents in that market.

Got it. Appreciate that. Maybe hitting on AI. Last quarter, you laid out the 3 buckets of RCM, prior auth and patient call center. And it sounds like prior auth is the furthest along with your early estimates suggesting $2 million, I believe, in operating expense efficiencies. What are you assuming in terms in the 2026 guide in terms of AI-related efficiencies? And should we expect majority of the near-term unlock to remain focused on prior auth? Or any update on RCM or call center?

Yes. Yes, absolutely. Thanks. That's a great question. So as we mentioned in our last earnings call, we expect in 2026, the impact of AI-related efficiencies across prior authorization, call center and RCM to generate about $2 million in SG&A savings specific to the portions of those departments that they are going to help augment. We really believe we're just starting to scratch the surface on the use cases and capabilities of agentic AI in our business model, which is just very well suited to integration in a number of different aspects. So that savings and efficiency generate over time is going to expand. We're also seeing some tremendous results in terms of metrics that impact patient care and deliver, frankly, better, more error-free patient care as it relates to things like prior authorization, turnaround time, call center responsiveness and key call center KPIs, et cetera. So it's really exciting. It's on track and sort of our 2026 estimates in terms of savings impact are on track and haven't changed.

Okay. Great. Maybe last one for me, and then I'll hop back in the queue. I appreciate you laying out the building blocks for the guidance. I guess as we're thinking about next year, as we distill the pieces you gave us, we have $150 million of capitated revenue. And then using the $27 million per month for pharmacy with modest growth, you get to like $330 million and change for dispensary, which leaves about $150 million of change -- or $150 million in change for fee-for-service revenue, which, based on where you finished 2025, implies effectively like flat to low single-digit fee-for-service growth. And I know in the past, you've talked about this segment growing in line with the market, call it, high single digits. So maybe just help us unpack the assumptions in the fee-for-service revenue outlook.

Yes. Matt, it's Rob. So I think the dynamic that you're seeing here is really about the sheer volume of capitated lives that are coming under management. With that and especially in markets like Florida, there's going to be some minor cannibalization of fee-for-service volumes. And so that's a little bit of the impact that you see there. Beyond that, we do expect to continue to see organic growth from our own practice efforts. A lot of the growth that we saw in 2025 was driven by ramping new markets like Florida and Oregon. And so as Florida and Oregon continue to mature, some of that organic growth is going to erode slightly. But the main area of focus continues to be the capitated revenue line as well as the attachment from pharmacy, and we're very excited about the growth there.

The next question is a follow-up from David Larsen with BTIG.

Can you talk a little bit about your expectations for SG&A in 2026? It looks like for the year, as a percentage of revenue, it improved by 642 basis points. Just any thoughts on how SG&A should trend in '26 as a percentage of revenue? Should we see another significant improvement there?

You will see improvement, not to that degree. As we talked about in the script, there is some investments going on for growth. The level of risk that we're taking at this point as measured by lives under management, which is represented by that significant percent growth in the capitated revenue line, requires some growth. But yes, you'll continue to see the scale there. That's something that Dan and I are keenly focused on and aware of, and you'll continue to see our discipline in that area.

And free cash flow is expected to be positive in '26?

Exiting and second half of the year, yes.

Okay. And then the fee-for-service revenue... [Technical Difficulty]

Dave, are you still there? I think we might have lost audio on Dave.

Okay. The next question comes from Yuan Zhi with B. Riley.

So for your $150 million revenue guidance for the capitated contract, can you talk about the underlying assumptions there? So right now, you are in 5 markets in Florida. Are you expanding to expand further? And how the delegated model there will contribute to this growth -- meaningful growth in 2026?

Yes. So as we commented on the script, we've got about $50 million of run rate revenue coming from our Florida-based delegated contracts. So beyond that, we have a healthy pipeline within existing markets. And so the simple answer is no, we don't need to expand beyond the markets we're in to hit that number. We are opportunistic about growth. And so if the right opportunity comes for that expansion, then we'll obviously take a very serious look at that.

[Operator Instructions] The next question is a follow-up question from Matthew Shea with Needham & Company.

I wanted to maybe take a step back and just ask a bit of a higher-level question. With the Medicare Advantage rate notice for 2027, we effectively saw the whole value-based care sell off, yourselves included, although to a lesser extent. Maybe just speak to TOI's positioning in a potentially lower rate environment. Obviously, payers have already been struggling with oncology trends. So I would expect demand would only accelerate in a time when margins are tighter, but would love to kind of get your thoughts on that topic.

Yes, absolutely. Thanks, Matt. That's actually a very important question and something that we continue to try to drive clarity with our investors on, which is the MA rate cycle and sort of pressure that you've seen health plans and full risk, medical groups that are getting a percent of premium face is actually a tailwind for TOI. Our top line Medicare Advantage reimbursement is not a percent of total premium. It's not impacted by risk adjustment. In fact, pressure on the top line for payers generally causes them to reach out more proactively when it comes to seeking opportunities to provide great care for their patients and good access while also driving improvement in utilization. And so from that perspective, that actually helps our growth. So we tend to get lumped into some of those macro issues with payers, but I just want to make it very clear that, that is actually probably a good thing for TOI.

Okay. And then maybe just a quick follow-up on that. We get a lot of investor questions about this. It's just like the converse side of that. Demand is higher, but what happens to margins? And I know you just alluded to this about how pricing is effectively independent of rate cycles. But if the pie is shrinking, there's a thesis out there that it does hit providers somewhere. Maybe just speak to how you can protect contract terms in a potentially lower rate environment. So as we see that higher demand for your offerings come on that we don't need to be concerned about, any contract structures loosening or any contracts going underwater, if you will?

Yes, absolutely. I think at this point in time, it's really important to keep in mind that we've got a very unique care model in terms of our combination of both employed and network providers in markets where we're taking population level Part B capitation. That's both good for patients because it means better access because of our employed clinic model, high-level ancillary services in the community. But it also means we've got much stronger control over the practice patterns of the physicians since a good chunk of them are employed by us, and we own the network of contracted providers. That means we're able to control care delivery and price contracts more competitively, we believe, than anybody else in the market at this point in time. So from that perspective, we are truly the best alternative for a payer, both from a pricing perspective as well as just a care delivery and coordination perspective.

Thank you. At this time, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.