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Operator: 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. Mark Hueppelsheuser: 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. Daniel Virnich: 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? Rob Carter: 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. Daniel Virnich: 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: [Operator Instructions] The first question comes from David Larsen with BTIG. David Larsen: 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? Daniel Virnich: 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. David Larsen: 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? Daniel Virnich: Yes, that's our goal. David Larsen: 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? Daniel Virnich: 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. David Larsen: 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. Daniel Virnich: 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. David Larsen: 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? Rob Carter: 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. David Larsen: 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? Rob Carter: 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. David Larsen: 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. Daniel Virnich: 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. Operator: The next question comes from Yuan Zhi with B. Riley. Yuan Zhi: 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? Daniel Virnich: Yes. Rob, could you try that? Rob Carter: 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. Yuan Zhi: 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. Daniel Virnich: 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. Yuan Zhi: 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? Daniel Virnich: 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. Operator: The next question comes from Matthew Shea with Needham & Company. Matthew Shea: 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? Daniel Virnich: 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. Matthew Shea: 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? Daniel Virnich: 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. Matthew Shea: 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. Rob Carter: 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. Operator: The next question is a follow-up from David Larsen with BTIG. David Larsen: 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? Rob Carter: 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. David Larsen: And free cash flow is expected to be positive in '26? Rob Carter: Exiting and second half of the year, yes. David Larsen: Okay. And then the fee-for-service revenue... [Technical Difficulty] Daniel Virnich: Dave, are you still there? I think we might have lost audio on Dave. Operator: Okay. The next question comes from Yuan Zhi with B. Riley. Yuan Zhi: 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? Rob Carter: 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: [Operator Instructions] The next question is a follow-up question from Matthew Shea with Needham & Company. Matthew Shea: 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. Daniel Virnich: 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. Matthew Shea: 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? Daniel Virnich: 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. Operator: 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.
Operator: Thank you for standing by, and welcome to the WM Technology, Inc. Fourth Quarter and Full Year 2025 Earnings Call. I'd now like to introduce your host for today's program, Simon Yao. Please go ahead, sir. Simon Yao: Good afternoon, and thank you for joining us to discuss our fourth quarter and full year 2025 results. Today, we are joined by our CEO, Doug Francis; and our CFO, Susan Echard. By now, everyone should have access to our earnings announcement and supporting slide deck on our Investor Relations website. During this call, we will make forward-looking statements about our business outlook, strategies and long-term goals. Keep in mind that forward-looking statements are not guarantees of future performance and are subject to a variety of risks and uncertainties, some of which are beyond our control. Our actual results could differ materially from expectations reflected in any forward-looking statements. For a discussion of risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and our Investor Relations website. We specifically disclaim any intent or obligation to update these forward-looking statements, except as required by law. For the benefit of those who may be listening to the replay or archived webcast, this call was held on March 12, 2026. Since then, we may have made announcements related to the topics discussed so please refer to the company's most recent press releases and SEC filings. We will also discuss non-GAAP financial measures alongside those prepared in accordance with GAAP. Non-GAAP financial measures should be considered in addition to, but not as a substitute for the information prepared in accordance with GAAP. You can find a reconciliation of these measures to our GAAP results in our earnings release and earnings presentation. Finally, today's call is being webcasted from our Investor Relations website, and an audio replay will be available shortly. With that, I will now turn it over to Doug. Douglas Francis: Good afternoon, everyone, and thank you for joining us today. Over the past year, we have remained focused on executing against a clear set of priorities, operating with discipline, strengthening our financial position and continuing to invest in the platform to support long-term growth. While the cannabis industry continues to face significant structural headwinds, Weedmaps remains focused on the long game. For the full year 2025, we delivered $175 million in revenue, generating $40 million in adjusted EBITDA and ended the year with $62 million in cash, an almost 20% increase in our cash balance at the end of 2024. Our 2025 results reflected our team's ability to manage through industry cycles and the actions we have taken to reset and reinforce the business over the past several years. We are navigating a survival and balance sheet management mindset across the sector, but our strong liquidity allows us to invest thoughtfully. Revenue for the fourth quarter came in at the top end of our prior guidance and adjusted EBITDA exceeded our guidance for the quarter. That said, both of these measures were down 10% or more compared to the fourth quarter of 2024, reflecting the continuation of the industry trends that we discussed last quarter, which persisted through the fourth quarter and into the start of this year. Susan will walk through how these trends affected our financial results in more detail. Before I turn it over to her, I would like to provide our view of some of the macro trends and how we see them impacting our business. The cannabis landscape continues to be reshaped by consolidation. We see this led by 2 groups. On one hand, we have the MSOs who largely operate outside of the legacy states. And on the other, we have the large California-based retailers who continue to dominate and expand in the market. MSOs are prioritizing states where the operating and regulatory conditions support sustainable path to profitability, while battle-hardened California operators are adapting to operate on low margins in one of the industry's most competitive markets. This trend creates two possible challenges for Weedmaps. First, consolidation reduces the number of operators in the market. And like most marketplaces, our platform tends to perform best in regions with a larger and more competitive base of operators as they compete for visibility on our platform. Second, product choice and shelf space become streamlined, making a narrower set of brands available to the user. As these market dynamics persist, we remain focused on enhancing our product offerings, deepening our relationships with large California-based clients and MSO partners, improving adoption in states with regulatory capture and strengthening the overall marketplace experience. These efforts remain a strategic priority and we expect to make meaningful investments across our teams and technology throughout the year as we continue building for the future of Weedmaps. On Schedule III, we remain cautious around its potential for Weedmaps despite the positive headlines. It is critical to understand that rescheduling will not make cannabis federally legal nor will it immediately allow Weedmaps to enter new business lines or launch new revenue strategies. Being a company serving the cannabis industry market while being listed on a major U.S. exchange limits our strategic options relative to other technology businesses. We are restricted in how we can monetize and execute cannabis technology and how we can handle transactions and logistics. Without these capabilities, we are not able to provide customers a regular e-commerce experience like what they are used to outside of cannabis nor are we able to access the full benefit of our dual-sided marketplace. Unfortunately, Schedule III will not change this in the near term nor do we believe plant touching companies will be allowed on either of the U.S. exchanges anytime soon. While the potential elimination of 280E tax will improve cash flows for some, the impact may be more limited than the current positive sentiment within the industry suggests. Many plant touching operators, including a majority of publicly traded MSOs have adopted certain legal positions, utilized accounting consolidation strategies or recorded allowances for uncertain tax liabilities. As a result, most clients are already realizing cash flow benefits similar to what they would see if Section 280E did not apply. Rescheduling will just make the future of these benefits clearer and more certain, and rescheduling on its own will not erase these companies' historical tax liabilities, which, even if they are manageable, may slow down a client's ability to spend that newly free cash flow on growth rather than debt service. Furthermore, the tax benefits of rescheduling are likely to disproportionately favor large operators and MSOs who will continue to consolidate the market, which, as I explained, could have an impact on the Weedmaps business model. Ultimately, we want full legalization, and Schedule III is a step in that process. We are excited for the industry and the potential benefits rescheduling to provide, including extended research opportunities and greater regulatory clarity. In the meantime, we continue to focus on what we can control, building a broad marketplace where consumers can discover the brands and the products they want and ultimately transact with our retail partners. We are optimistic about several growth levers. We have several product updates underway designed to enable product-first discovery and shopping journeys. We believe this mode of engagement with the platform will allow retailers and brands to offer consumers an e-commerce experience more similar to what they find when shopping in other industries. We're pleased with the early momentum we've seen in New York, and hope to leverage our learnings and experiences to grow our presence in other new markets like Minnesota and Texas and the regulatory capture markets where we've historically had less of a presence. I want to thank our team for their continued focus and execution during a challenging period for the industry. While there is still work ahead, we believe the investments we are making today position Weedmaps well for the next phase of the industry's evolution. With that, I'll turn it over to Susan. Susan Echard: Thanks, Doug. Now turning to our financial performance. Revenue for the fourth quarter was $43 million, a decline of 10% year-over-year reflecting the persistent challenges our clients face across our core markets. In these regions, severe pricing compression, competition from the illicit markets and elevated excise tax burdens continue to weigh on our clients' margins and marketing budgets, limiting their ability to spend on our platform. This dynamic was reflected in lower spend across our featured and deals listings, which tend to be more sensitive to shifts in marketing spend. These conditions have driven contraction and consolidation across several of the industry's largest markets, particularly California and Michigan, where both total retail sales and average retail prices declined year-over-year throughout 2025. We saw encouraging growth in newer markets such as New York and Ohio, where our teams prioritized client penetration as retailers come online in those states. While this growth did not offset the pressure in our more mature markets, we are pleased with the early momentum we have seen in these states. As a result, full year revenue was $175 million compared to $185 million in 2024, representing a year-over-year decline of approximately 5%. Average paying clients in the fourth quarter were 5,120, down approximately 2% both year-over-year and sequentially, reflecting the consolidation in operator exits in the markets such as California, Michigan and Oklahoma, partially offset by growth in newer markets like in New York where our client count nearly doubled compared to the prior year. For the full year, average paying clients were 5,190, up 2% compared to 2024. Average revenue per paying client for both the fourth quarter and the full year was approximately $2,800, down from prior year levels. This is attributed to lower spend from certain existing clients amid tighter marketing budgets as well as the addition of clients in newer markets who typically begin at lower initial spend levels. Against a softer revenue backdrop, we remain disciplined in managing our cost structure throughout the year. Total operating expenses increased modestly by 2% to $174 million for the full year compared to $170 million in 2024, primarily due to certain nonrecurring items. Full year sales and marketing and product development expenses declined by $2 million and $8 million, respectively, driven by lower headcount-related costs and reduced advertising spend following restructuring actions taken earlier in the year to optimize and refocus these teams. These reductions were more than offset by higher general and administrative expenses, which increased approximately $6 million year-over-year. This increase included a couple of onetime items, including a $2.3 million noncash loss contingency recorded in the second quarter related to a contractual obligation with our server provider, as well as a $2.8 million legal settlement disclosed as a subsequent event in our 2025 Form 10-K. Additionally, in the fourth quarter, we recorded a noncash asset impairment charge of approximately $7.8 million, largely related to our goodwill assets. As a result, net income for the full year was $3 million. Despite our revenue decline year-over-year, our cost control efforts resulted in a non-GAAP adjusted EBITDA for the full year of $40 million compared to $43 million for 2024. In the current industry environment, maintaining tight cost control enables us to navigate these challenges while preserving the flexibility to invest in key organic growth initiatives. Our operating model allows us to manage expenses and maintain profitability while self-funding operations and continuing to invest in the business. Looking ahead, many of the industry dynamics that impacted our clients in 2025 have carried into the early part of this year and are expected to persist through 2026. As a result, we expect first quarter revenue to decline sequentially by mid- to high single digits from the fourth quarter. We plan to continue investing opportunistically across the business. And given the potential variability and the timing of these investments, we will not be providing adjusted EBITDA guidance for 2026. The company remains committed to preserving financial flexibility and disciplined capital allocation as we assess the opportunities ahead. With that, I'll turn the call back to the operator. Operator: Thank you. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
Dan Ives, Managing Director And Senior Equity Research Analyst, Wedbush Securities breaks down why this tech sell‑off may be the bottom — and where investors should look for opportunity as AI spending accelerates. 00:00 Introduction.
The recent US-Israel strikes on Iran have triggered sharp equity declines and surging oil prices, but Game Theory suggests a short-lived conflict. I expect a rapid mean reversion in oil prices and energy/oil ETFs like XLE and USO once the conflict resolves and the Strait of Hormuz reopens.
A federal judge in a scathing ruling blocked subpoenas issued to the Federal Reserve as part of a criminal investigation of its chair, Jerome Powell, by the prosecutors in the office of U.S. Attorney for Washington, D.C., Jeanine Pirro, a court filing showed Friday.
A methodological change contributed to a better-than-expected inflation report, prompting questions from some economists.
As of Thursday morning, that condition hasn't come close to being met, and the window to act may be narrower than most investors realize.
U.S. Attorney for D.C. Jeanine Pirro holds a press conference on the investigation into Federal Reserve chair Jerome Powell.
The "gold standard" of jobs data indicates that the U.S. economy lost jobs in the six months following the escalation of Trump tariffs on April 2.
A federal judge rejected subpoenas of the Federal Reserve board, according to a court document. Mike McKee reports on "Bloomberg The Close.
The 10-year Treasury yield was headed for its steepest two-week climb in almost a year amid the U.S. and Israel's war with Iran.
Why Canadian banks remain resilient in the face of economic uncertainty. What the latest bank earnings say about Canada's economy.
Investors are increasingly worried that, despite talk of "unprecedented" times, we have been here before—and the first go didn't turn out well.
The central bank had challenged the subpoenas as improper.
Fed Chair Powell criminal investigation update from U.S. Attorney Jeanine Pirro == Yahoo Finance provides free stock ticker data, up-to-date news, portfolio management resources, comprehensive market data, advanced tools, and more information to help you manage your financial life. Connect with us: — Facebook: https://www.facebook.com/yahoofinance — X/Twitter: https://x.com/YahooFinance — Instagram: https://www.instagram.com/yahoofinance/ — TikTok: https://www.tiktok.com/@yahoofinance — LinkedIn: https://www.linkedin.com/company/yahoo-finance See the Latest News & Data: https://finance.yahoo.com/ Get the Yahoo Finance App: — iOS (https://apple.co/3Rten0R) — Android (https://bit.ly/3t8UnXO)
Jeanine Pirro, the top federal prosecutor in Washington, is set to give an update on the criminal investigation of Federal Reserve Chair Jerome Powell. Pirro's planned statement comes as Sen.
We have recently experienced market volatility and obvious signs of rotation among stock market sectors. Currently, most of the damage to the stock market seems to be concentrated within software business.
It isn't just oil that's at risk in an extended war. Key chip-making ingredients like helium and bromine come from the Middle East—as does an increasing amount of AI funding.
As more and more tankers were attacked near the Strait of Hormuz throughout the week, crude broke out of its temporary ~$80 range. Today could have somewhat eased the pressure, but the petrol bulls came right back to fuel the commodity.
The strikes on Iran have changed the trajectory of GDP growth and inflation rates in the United States. As a result, economists fear the dual threat of stagflation: weaker labor markets with higher prices for consumers.