Pent-up demand for healthcare services and the return-to-work market among employers helped boost One Medical's third-quarter revenue to $101.6 million, up 46% from $70 million during the same period last year.
However, One Medical's executives don’t expect some of these tailwinds to persist in the fourth quarter and into 2021, they said during the company's third-quarter 2020 earnings call Tuesday.
The company's membership jumped 29% in the third quarter to reach more than half a million members compared to 397,000 members in the third quarter of 2019, One Medical reported. With that jump in membership, One Medical reached its projected membership for full-year 2020 one quarter early, executives said.
The company reported adjusted EBITDA was $3.5 million compared with a loss of $8.2 million in the third quarter of 2019.
The company's cash and short-term marketable securities topped $682 million during the quarter.
One Medical, which went public in January, markets itself as a membership-based, tech-integrated and consumer-focused primary care platform. The company is currently in 12 different markets across the U.S., with five more to open up in 2021.
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One Medical plans to open centers in Houston and Austin, Texas; Raleigh, North Carolina; Milwaukee; and Columbus, Ohio, said Dan Rubin, chair and CEO of One Medical, during the earnings call.
In each of its markets, the company partners with healthcare providers, such as Ohio State Wexner Medical Center in Columbus, Ascension Texas in Austin, and MedStar Health in Washington, D.C.
The company operates 103 health centers, up from 83 at the end of December 2019.
However, while the company has been growing its overall size, it has continually reported losses.
One Medical reported a loss of $16.4 million, or 13 cents a share, compared with a loss of $15.6 million or 82 cents a share in the year-ago period, according to its filing.
The company's revenue and earnings topped expectations. Wall Street analysts expected a loss of 19 cents a share for the quarter on revenue of $86 million, according to StreetInsider.
The COVID-19 pandemic led to declines in billable revenues earlier in the year, but the company saw a large recovery in the aggregate number of billable services in the third quarter to now exceed pre-COVID-19 levels, said One Medical Chief Financial Officer Bjorn Thaler during the earnings call.
"We believe our revenue out-performance is based on our ability to identify gaps in patient care and engage members to fill these gaps in the way they prefer, in-person or remote. This is related to pent-up demand from earlier in the year," he said.
The company's strong revenue performance during the quarter also was driven by higher-than-expected demand for COVID-19 testing and more patients requesting the flu vaccine earlier than usual, Thaler said.
The company's revenue also includes $180,000 that it received from the Provider Relief Fund established under the CARES Act. One Medical received $2.4 million in CARES Act funding during the second quarter.
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One Medical rolled out a worksite reentry program called One Medical Healthy Together to support employers as they begin to transition workforces back into shared environments. That program virtually screens employees for key symptoms and clinical risk factors, offers testing services and supports ongoing digital screening and follow-up care as needed.
A new virtual-only offering for companies, called One Medical Now, provides the One Medical service experience to employees in markets where One Medical doesn’t currently offer a physical presence, Rubin said.
"Employers are seeking to improve access to digital and in-person health benefits for their employees during COVID-19," Thaler said. "We offer real-time, practical solutions for their return-to-work challenges."
For the fourth quarter of 2020, One Medical expects its membership to reach to between 530,000 and 540,000.
The company is projecting total net revenue in the range of $104 million to $109 million in the fourth quarter. Adjusted EBITDA is projected to be in the range of a loss of $4 million to a positive $1 million for the quarter.
For full-year 2020, the company expects revenue to reach $362 million and up to $367 million. Adjusted EBITDA for the year is expected to be in the range of a loss of $29 million to a loss of $24 million.