10-K: Oncology Institute Reports Strong Revenue Growth, Reduced Losses

The Oncology Institute, Inc. reported a 27.8% increase in total operating revenue for 2025, alongside a significant reduction in net loss and improved Adjusted EBITDA.

Summary

• Total operating revenue increased by 27.8% to $502.7 million in 2025, up from $393.4 million in 2024.
• Patient services revenue grew by 11.8% to $229.0 million, driven by increases in both fee-for-service (9.0%) and capitated revenue (17.2%).
• Specialty pharmacy revenue surged by 49.6% to $269.2 million, primarily due to a 66.6% increase in prescription fills.
• Net loss decreased to $60.6 million in 2025 from $64.7 million in 2024, reflecting an improvement in profitability.
• Adjusted EBITDA improved significantly, moving from a loss of $35.7 million in 2024 to a loss of $12.4 million in 2025.
• The company managed approximately 2.0 million patients under value-based agreements as of December 31, 2025, up from 1.9 million in 2024.
• Operating expenses increased by 18.8% to $538.8 million, primarily due to higher direct costs for specialty pharmacy and patient services.
• Selling, general and administrative expenses decreased by 2.1% to $105.6 million, driven by a 59.2% decrease in share-based compensation and a 9.4% decrease in non-clinical payroll.
• Cash and cash equivalents stood at $33.6 million as of December 31, 2025, down from $49.7 million in 2024.
• The company had federal income tax Net Operating Losses (NOLs) of $227.5 million and state NOLs of $220.7 million as of December 31, 2025.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive. While the company continues to report a net loss, the substantial revenue growth, significant improvement in Adjusted EBITDA, and positive cash flow from operations in Q4 2025 demonstrate strong operational progress and effective cost management. The successful capital raises also address liquidity concerns, though significant debt and market risks remain.

Positives

• Total operating revenue increased by 27.8% year-over-year, reaching $502.7 million in 2025.
• Net loss decreased by 6.3% from $64.7 million in 2024 to $60.6 million in 2025, indicating an improvement in financial performance.
• Adjusted EBITDA improved substantially from a loss of $35.7 million in 2024 to a loss of $12.4 million in 2025, demonstrating operational efficiency gains.
• Selling, general and administrative expenses decreased by 2.1%, reflecting successful efforts to streamline operations and optimize overhead.
• The company achieved positive cash flow from operations of $3.2 million in Q4 2025, a result of working capital management initiatives.
• Patient services revenue increased by 11.8%, driven by steady patient volumes in mature markets and momentum in new markets.
• Specialty pharmacy revenue grew by 49.6%, supported by a 66.6% increase in prescription fills and improved drug procurement performance.
• The company expanded its managed patient population under value-based agreements to 2.0 million, up from 1.9 million.
• Successfully raised approximately $16.5 million in gross proceeds from a private placement and $13.8 million in net proceeds from an at-the-market offering in 2025, enhancing liquidity.
• Maintained effective internal control over financial reporting as of December 31, 2025, as attested by management and independent auditors.

Negatives

• The company reported a net loss of $60.6 million in 2025 and anticipates continued losses due to investments in patient base expansion and public company operations.
• Cash and cash equivalents decreased by $16.1 million, from $49.7 million in 2024 to $33.6 million in 2025.
• Net cash used in operating activities was $24.6 million in 2025, although it improved from $26.5 million in 2024.
• Interest expense, net, increased by 50.4% to $11.3 million in 2025, partly due to a one-time loss on extinguishment of debt of $2.9 million.
• The change in fair value of conversion option derivative liabilities resulted in an unfavorable increase of $12.2 million, primarily due to an increase in stock price.
• Direct costs for specialty pharmacy increased by 45.8% to $220.6 million, largely due to higher prescription volumes.
• Direct costs for patient services increased by 10.0% to $205.5 million, driven by a 13.1% increase in intravenous drug costs.
• Clinical trials & other revenue decreased by 47.0% due to a profit-sharing agreement with Helios CR, Inc., resulting in a $2.4 million loss from the write-off of segment net assets.
• Inventories increased by $6.8 million to $16.9 million, partly due to a year-end buy-in with the primary drug supplier to take advantage of rebates.

Risks

• Growth strategy depends on the ability to build or acquire clinics and recruit new patients, which may not be successful.
• Rapid growth and organizational change place significant demands on management and operational/financial resources.
• History of net losses and anticipated increasing expenses mean profitability may not be achieved or maintained.
• A re-emergence of COVID-19 or other infectious diseases could adversely affect business operations and financial results.
• Services are concentrated in certain geographic areas, exposing the company to unfavorable changes in local benefit costs, reimbursement rates, competition, and economic conditions.
• Dependence on reimbursement from third-party payors and individual payments could lead to delays, denials, or uncertainties in the reimbursement process.
• Value-based agreements carry the risk that the cost of providing services will exceed compensation if care costs are not accurately predicted.
• Significant risks are associated with estimating revenue under risk agreements, and inaccurate estimates could impact revenue recognition.
• A significant portion of Patient Services revenue is derived from a limited number of health insurance, IPAs, and medical group companies, posing concentration risk.
• A significant portion of prescription drug sales are reimbursed by a limited number of pharmacy benefit management companies, which could change contracting terms or remove the company from networks.
• Reductions in Medicare reimbursement rates or changes in Medicare program rules could materially adversely affect financial condition and results.
• Uncertainty regarding healthcare reform and other changes in government programs may adversely affect business, financial condition, or results of operations.
• Inflation can adversely affect the company by increasing costs of drugs, clinical trials, research, and administration.
• The transition from volume to value-based reimbursement models may not be profitable and could require significant investment.
• Changes in payor mix and potential decreases in reimbursement rates due to consolidation among customers could adversely affect revenues.
• Significant competition from other healthcare services providers could adversely affect business if the company fails to compete adequately.
• Intense competition for physicians and clinical personnel, or shortages, could increase labor costs and affect profitability.
• Inability to provide consistently high quality of care could adversely impact the business and reputation.
• Substantial dependence on a single source of drug supplies poses risks of disruption, price increases, or inadequate reimbursement.
• Dependence on information technology systems and third-party vendors means failures, disruptions, or security breaches could materially adversely affect the business.
• Potential exposure to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend.
• Some jurisdictions preclude non-compete agreements with physicians, potentially leading to loss of patients if former employees compete.
• Future acquisitions may use significant resources, be unsuccessful, or expose the company to unforeseen liabilities.
• Failure to perform clinical trial services in accordance with contractual requirements, government regulations, and ethical considerations could lead to significant costs or liability.
• Dependence on relationships with affiliated professional entities (TOI PCs) means disruption or legal challenges to these arrangements could harm the business.
• Medical liability claims against managed clinics and TOI PCs could result in substantial damage awards exceeding insurance limits.
• Changes in accounting standards affecting consolidation of entities could materially adversely affect the consolidation of TOI PCs' revenues.
• Third-party payor audits could result in refunds, fines, penalties, or exclusion from programs, materially affecting results.
• Extensive fraud, waste, and abuse laws may give rise to federal and state audits, investigations, and lawsuits.
• Loss of regulatory licenses, permits, or accreditation status, or ineligibility for reimbursement, could materially adversely affect the business.
• Failure to comply with data interoperability and information blocking rules could adversely affect consolidated results.
• Actual or perceived failures to comply with data protection, privacy, and security laws could adversely affect business.
• Inability to utilize a portion of Net Operating Loss carryforwards (NOLs) to offset future taxable income.
• Future changes to applicable tax laws and regulations or their interpretations may have an adverse effect.
• Goodwill and other intangible assets are subject to impairment testing, which could result in material write-downs.
• Need for additional capital to fund operations and growth, which may not be obtainable on acceptable terms or at all.
• Issuance of additional shares of Common Stock, Warrants, or other convertible securities may dilute ownership interest and adversely affect stock price.
• Future sales of Common Stock and Warrants by existing securityholders could cause market price to decline.
• Delaware law and provisions in the Charter and Bylaws could make a takeover proposal more difficult.
• Risk of delisting from Nasdaq if listing requirements are not met, impacting ability to raise capital and comply with debt covenants.
• The market price of Common Stock may be volatile or decline regardless of operating performance.
• Cessation of research coverage or unfavorable analyst commentary could cause stock price to decline.
• Obligations associated with being a public company involve significant expenses and require substantial resources and management attention.
• No intention to pay dividends on Common Stock for the foreseeable future.
• Warrants may have an adverse effect on the market price of Common Stock due to potential dilution.
• The Facility Agreement and associated restrictive covenants could adversely affect financial condition and restrict ability to raise capital.
• Servicing indebtedness requires a significant amount of cash, and inability to generate sufficient cash flow could lead to restructuring or additional financing.
• Failure to comply with conditions of the Facility Agreement or Senior Secured Convertible Note could result in an event of default.
• Terms of the Senior Secured Convertible Note may have a negative impact on business and value of securities, and result in substantial dilution.

Future Outlook

The Oncology Institute anticipates continued losses as it invests heavily in increasing its patient base and expanding operations. However, management expects selling, general and administrative expenses to decrease as a percentage of revenue over the long term. The company plans to continue driving covered lives growth in existing markets, expanding services with existing partners, and securing new contracts. New market entry will leverage a capital-efficient, fully delegated model, and M&A opportunities are being pursued to rapidly establish market presence and transition acquired practices to the value-based model. The company also aims to broaden service offerings, including ancillary and adjacent services, and access to new oncology treatments through clinical trials.

Management Comments

• We expect our losses will continue as we expect to invest heavily in increasing our patient base, expanding our operations, and operating as a public company.
• We believe that our position in the market and focus on elevating the state of oncology care with a value-based care model positions our affiliated providers well for future growth.
• We believe that our model will support growth into new markets, and allow us to continue to service more patients across the United States.
• We believe that these new contracting methodologies are furthering our mission to provide access to world-class oncology care, in an affordable manner, to underserved populations, allowing us to be an even more engaged partner to our payors for populations beyond those serviced directly in a TOI clinic.
• Our management team, including the Chief Information Officer, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.
• We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

Industry Context

StockSavvy.ai notes that The Oncology Institute's focus on value-based care and capitated contracts positions it favorably against the traditional fee-for-service model, which is increasingly seen as driving up costs. The company's hybrid model, combining owned clinics with a network of independent providers, allows for scalable expansion and cost management, differentiating it from competitors like American Oncology Network, U.S. Oncology Network, and OneOncology, which are predominantly FFS. The increasing penetration of Medicare Advantage plans and the shift towards chronic disease management in cancer care align with TOI's strategy. Regulatory changes, such as California's AB 1415 and federal initiatives to reduce drug prices, present both challenges and opportunities for companies like TOI that emphasize cost-effective, high-quality care.

Comparison to Industry Standards

• The Oncology Institute's value-based model, which generated over 46% of its revenue in 2025, contrasts sharply with traditional oncology physician practices like American Oncology Network, Inc., U.S. Oncology Network, Inc., and OneOncology, Inc., which are predominantly reimbursed via fee-for-service (FFS) contracts. StockSavvy.ai highlights that the FFS model often incentivizes over-utilization and higher costs, whereas TOI's capitated contracts remove these incentives and reward better clinical outcomes and cost efficiency.
• A Stanford University study on TOI's High Value Cancer Care (HVCC) program in 2019 demonstrated greater than 25% lower median total healthcare costs from diagnosis to death for participating patients. This suggests a significant cost advantage compared to general oncology care, though specific comparable company data is not provided in the filing.
• The company's average patient rating of 4.6 out of 5 stars from over 3,500 Google reviews indicates a strong patient experience, which is a key competitive factor in the U.S. healthcare market for Medicare beneficiaries, alongside quality of care and health outcomes.
• TOI's fully delegated model, where it manages utilization, network construction, and claims adjudication for payors, offers a more integrated approach than secondary competitors like specialty benefit managers (e.g., Evolent Health, Thyme Care, OncoHealth). StockSavvy.ai observes that benefit managers often achieve incremental utilization improvements but lack the direct influence over physician behavior and referrals that TOI's model provides, frequently leading to antagonistic relationships with FFS-based practices.

Management Changes

Corporate Governance

Legal Proceedings

• The company is subject to certain outside claims and litigation arising in the ordinary course of business, but management believes the outcome of such matters will not have a material adverse effect on the consolidated financial statements.

Related Party Transactions

• Related party payments for board fees and other services totaled $450,000 in 2025, down from $549,000 in 2024.
• No outstanding related party balances at December 31, 2025 and 2024, other than the debt balance with Deerfield Partners L.P. (lender and existing investor).

Stakeholder Impact

• **Shareholders:** Experience dilution from recent equity offerings (private placement, at-the-market offering, warrant exercises) and potential future issuances. The stock price remains volatile, and there is no intention to pay dividends in the foreseeable future. However, operational improvements and reduced net losses could positively impact long-term value.
• **Employees:** Benefit from competitive pay and benefits, programs promoting diversity and community, learning and development opportunities, and an Employee Stock Purchase Plan (ESPP). The company's growth strategy aims to expand the workforce. However, cost rationalization programs led to severance expenses in 2025.
• **Patients:** Benefit from the value-based care model, which aims for better quality care, improved outcomes, enhanced access to sub-specialized care in community settings, and lower out-of-pocket costs. The expansion of clinics and network providers increases access to care.
• **Payors:** Benefit from the value-based model's focus on managing costs and improving outcomes, with TOI offering predictable, recurring payments and discounts to historical oncology costs. The fully delegated model offers a more engaged partnership.
• **Creditors:** The Senior Secured Convertible Note holders have a first-priority perfected lien on substantially all of the company's personal and real property, providing security. Debt covenants restrict certain company activities, but the company was in compliance as of December 31, 2025. Prepayments and debt-to-equity exchanges have reduced outstanding debt.

Next Steps

• Continue driving covered lives growth in existing markets by expanding services with existing partners and securing new contracts.
• Add more TOI PC clinics through acquisitions and de novo clinic builds.
• Expand into new markets using the fully delegated model and network contracting strategy.
• Leverage M&A expertise to facilitate growth in both existing and new markets, transitioning acquired practices to the value-based model.
• Broaden scope and diversify service offerings, including ancillary and adjacent services focused on patient care and innovation.
• Invest further in technology, oncologist onboarding and training, and strategic acquisitions.
• Monitor and comply with evolving healthcare regulations, including the implementation of California Assembly Bill 1415 (AB 1415) regulations expected in Spring 2026.
• Continue to assess the potential impact of the CMS final rule on Risk Adjustment Data Validation (RADV) audits for plan year 2018 and subsequent years.
• Address the expiration of ACA marketplace premium tax credits at the end of 2025 and potential impact on payer mix.
• Continue to improve and innovate the care model using clinical data from the High Value Cancer Care (HVCC) program.
• The company does not intend to further use the at-the-market sales agreement related to its offering program.

Key Dates

Recommendation

The Oncology Institute demonstrates significant operational improvements, including substantial revenue growth and a notable reduction in net loss and Adjusted EBITDA. The successful capital raises in 2025 also addressed immediate liquidity concerns. However, the company still operates at a net loss, carries substantial debt, and faces numerous industry-specific and regulatory risks. While the strategic shift to value-based care and expansion efforts are promising, the path to sustained profitability is not yet fully clear. A 'hold' recommendation allows investors to observe the continued execution of the growth strategy and the impact of cost management initiatives without taking on additional risk, given the mixed financial picture and inherent volatility in the healthcare sector.

Keywords

Oncology, Healthcare, Value-based care, Cancer treatment, SEC filing, 10-K, Financial results, Revenue growth, Net loss, Adjusted EBITDA, Specialty pharmacy, Clinical trials, Managed care, Risk management, Corporate governance, Nasdaq, Medical oncology, Radiation oncology, Capitation, Fee-for-service, Patient services, Cybersecurity, Debt, Capital raise