ModivCare Reports Significant Financial Decline and Files for Chapter 11 Bankruptcy

ModivCare Inc. reported a significant decline in its financial performance for the second quarter of 2025, with net service revenue of $659.6 million, down 5.5% from $698.3 million in the same period last year. The company experienced an operating loss of $268.5 million, compared to a loss of $98.9 million in Q2 2024. The net loss for the quarter was $303.7 million, resulting in a loss per share of $21.16, compared to a loss of $9.07 per share in the prior year. The decline in revenue was attributed to decreased service revenue across all segments, particularly in non-emergency medical transportation (NEMT) and personal care services (PCS).

In terms of operational metrics, ModivCare's NEMT segment saw a decrease in average monthly members by 19.7%, contributing to a revenue drop of $17.3 million. The PCS segment also faced challenges, with service revenue decreasing by $19.7 million due to an 11.3% reduction in hours worked by personal care providers. The Monitoring segment reported a revenue decline of $1.5 million, primarily due to a decrease in average monthly members. The company recorded a substantial goodwill impairment charge of $263.4 million, primarily affecting its PCS and Monitoring reporting units, reflecting ongoing financial challenges.

Strategically, ModivCare has been navigating significant changes, including a voluntary Chapter 11 bankruptcy filing on August 20, 2025, to restructure its debt and improve liquidity. The company entered into a Restructuring Support Agreement with creditors, which includes provisions for $100 million in debtor-in-possession financing and a comprehensive restructuring plan aimed at reducing total funded debt by approximately $1.1 billion. The plan was confirmed by the Bankruptcy Court on December 15, 2025, allowing ModivCare to continue operations as a debtor-in-possession.

As of June 30, 2025, ModivCare's total assets were reported at $1.4 billion, down from $1.7 billion at the end of 2024. The company had cash and cash equivalents of $76.4 million, a decrease from $112.6 million at the end of the previous year. Total liabilities increased to $1.8 billion, with long-term debt comprising a significant portion. The company has faced challenges in cash flow generation, attributed to rising operational costs and extended collection periods for receivables.

Looking ahead, ModivCare's management expressed uncertainty regarding its ability to continue as a going concern, contingent on successfully implementing the restructuring plan and generating sufficient liquidity post-bankruptcy. The company anticipates ongoing financial challenges, including increased costs and potential declines in membership due to regulatory changes. The outlook remains cautious as ModivCare works to stabilize its operations and improve its financial position in the wake of the restructuring process.