ModivCare Reports 4.9% Revenue Decline and Increased Net Loss in Q1 2025

ModivCare Inc. reported a decline in financial performance for the first quarter of 2025, with net service revenue of $650.7 million, down 4.9% from $684.5 million in the same period last year. The company experienced a net loss of $50.4 million, compared to a loss of $22.3 million in Q1 2024. This resulted in a loss per share of $3.52, significantly higher than the $1.57 loss per share reported in the prior year. The decrease in revenue was attributed to declines across all segments, particularly in the non-emergency medical transportation (NEMT) segment, which saw a revenue drop of $30.3 million.

Operating expenses for ModivCare also decreased, totaling $655.1 million in Q1 2025, down from $687.8 million in Q1 2024. The reduction in service expenses, which fell to $553.0 million from $583.6 million, was primarily driven by cost optimization efforts. However, general and administrative expenses increased slightly to $78.6 million from $77.2 million, reflecting higher costs associated with corporate operations. Interest expenses surged to $38.8 million, more than double the $18.7 million reported in the previous year, largely due to new debt facilities and higher interest rates.

In terms of operational metrics, ModivCare's NEMT segment reported a decrease in average monthly members to 23,554 from 29,071, a decline of 19%. This drop was linked to the loss of certain contracts and ongoing Medicaid redetermination efforts. Despite the decrease in membership, revenue per member per month increased by 15.5%, partially offsetting the overall revenue decline. The company also reported a total of 8,458 paid trips in the NEMT segment, down from 8,808 in the previous year.

Strategically, ModivCare has taken steps to address its financial challenges, including entering into an amendment to its credit agreement that established a $75 million incremental term loan facility. The company is also exploring options for additional liquidity, including potential asset divestitures and operational efficiencies. However, management has expressed substantial doubt about the company's ability to meet its obligations over the next year, indicating that further financing may be necessary to sustain operations. The outlook remains cautious as ModivCare navigates a challenging market environment characterized by rising costs and regulatory pressures.