The Oncology Institute, Inc. (TOI) reported third‑quarter 2025 revenue of $136.6 million, a 36.7% year‑over‑year increase that surpassed the consensus estimate of $122.83 million by $13.77 million, or 11.7%. The surge was driven largely by a 57.4% jump in pharmacy revenue, which grew to $78.5 million from $48.8 million in Q3 2024, reflecting strong demand for its specialty drug distribution and expanded value‑based contracts.
Gross profit rose to $18.9 million, up 31.7% from $14.8 million in the same quarter last year, lifting the gross‑margin to 13.8% from 11.8%. The margin expansion was largely attributable to the higher mix of high‑margin pharmacy sales and improved pricing power in fee‑for‑service contracts, offsetting modest increases in operating expenses.
Despite the revenue beat, the company posted a net loss of $16.5 million, slightly wider than the $16.1 million loss in Q3 2024. Basic and diluted earnings per share were $(0.14), missing the consensus estimate of $(0.12) by $0.02. The miss was driven by higher cost of goods sold in the pharmacy segment and a one‑time restructuring charge of $1.2 million that was not present in the prior year.
Management raised its full‑year 2025 revenue guidance to $495 million–$505 million, up from the previous $460 million–$480 million range, and narrowed the adjusted EBITDA loss to $11 million–$13 million, compared with a prior $8 million–$17 million range. The upward revision reflects confidence in continued pharmacy growth and the expected ramp‑up of value‑based care contracts, while the tighter EBITDA guidance signals improved cost discipline and a clearer path to profitability in Q4.
Segment analysis shows the pharmacy business as the primary growth engine, contributing 57% of total revenue and 70% of gross profit. Fee‑for‑service revenue grew 12% to $38.4 million, driven by new contracts in the Midwest. The company also reported a 15% increase in clinical services revenue, reflecting expanded oncology consults. However, the oncology clinical segment faced headwinds from payer reimbursement delays, which contributed to the net loss.
Management emphasized the company’s focus on AI‑enabled operational efficiencies. CEO Daniel Virnich said, “Our pharmacy business continues to set records, and our new delegated lives in Florida are ramping nicely with strong MLR performance.” CFO Rob Carter noted, “We are raising our full‑year outlook because the year‑to‑date financials demonstrate stronger revenue momentum and improved cost control.” Investors reacted negatively, citing the missed EPS and continued net loss despite the revenue beat, underscoring a market focus on profitability over top‑line growth.
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