Oncology Institute, Inc. Annual Report - Fiscal Year Ended December 31, 2025

Oncology Institute, Inc. (TOI) has released its annual report for the fiscal year ended December 31, 2025. This summary distills key insights from the 10-K filing, offering investors a clear understanding of the company's performance, strategic direction, and risks.

Business Overview

Oncology Institute, Inc. (TOI) leads in comprehensive cancer care, operating through three interconnected business areas:

1. Patient Services: Our core business, providing direct oncology care through a network of clinics.
2. Specialty Pharmacy: An in-house pharmacy that supplies specialized medications, enhancing patient convenience and treatment adherence.
3. Clinical Research Trials and Other: Active participation in clinical trials, contributing to medical advancements and generating additional revenue.

In 2025, TOI achieved robust growth and a significant return to profitability, marking a strong year for operational expansion and financial strengthening.

Market Trends and Regulatory Changes Affecting the Business: Several external factors shape the oncology landscape and impact TOI:

• Aging Population & Cancer Incidence: A growing elderly population increases cancer incidence, driving demand for oncology services.
• Shift to Value-Based Care: The healthcare industry is moving towards models that reward quality and outcomes over volume. TOI's integrated approach and focus on patient care coordination align well with this trend.
• Advancements in Oncology Treatments: Rapid developments in targeted therapies, immunotherapies, and precision medicine require continuous investment in research and specialized clinician training.
• Drug Pricing Scrutiny: Increased regulatory and public pressure on pharmaceutical pricing, particularly for specialty drugs, could affect the profitability of TOI's specialty pharmacy segment.
• Telehealth Expansion: The continued adoption of telehealth services presents both opportunities for expanded patient access and challenges in adapting traditional care models.

Financial Performance

TOI delivered strong financial results in 2025, showcasing significant revenue growth and improved earnings:

• Total Revenue: Increased by 17.6% year-over-year, reaching $1.4 billion in 2025, up from $1.19 billion in 2024.

  • Patient Services Revenue: Grew from $950 million in 2024 to $1.1 billion in 2025.
  • Specialty Pharmacy Revenue: Increased from $200 million in 2024 to $250 million in 2025.
  • Clinical Research Trials and Other Revenue: Rose from $40 million in 2024 to $50 million in 2025.

• Cost of Revenue: Key operational costs also increased in line with growth:

  • IV Drug Costs: Rose 20% to $300 million in 2025.
  • Clinician Salaries and Benefits: Increased 14.3% to $400 million in 2025.
  • Medical Supplies and Other: Grew 25% to $150 million in 2025.

• Profitability: The company translated revenue growth into improved earnings:

  • Gross Profit: Achieved $550 million in 2025, a 25% increase from $440 million in 2024.
  • Operating Expenses: Totaled approximately $320 million, including selling, general, and administrative (SG&A) costs and depreciation.
  • Operating Income: Reached $230 million in 2025.
  • Net Income: The company reported a net income of approximately $168.75 million for 2025, a significant improvement from a net loss of $50 million in 2024.

Risk Factors

Investors should be aware of several key risks:

• Concentration Risks: High dependence on a single major payor (25% of revenue) and a single major supplier ($200 million in costs) creates significant operational and financial vulnerabilities.
• Shareholder Dilution: $100 million in convertible debt and outstanding warrants present a risk of future share dilution if converted or exercised. This could negatively impact earnings per share and the stock price.
• Related Party Transactions: The company discloses payments to individuals such as Karen M. Johnson, Richard Barasch, Anne M. McGeorge, Mohit Kaushal, Maeve O'Meara Duke, Mark L. Pacala, Veeral Desai, and M33 Growth LLC. These transactions are noted as they can present potential conflicts of interest.
• Healthcare Regulatory & Reimbursement Risks: Changes in government healthcare policies, insurance reimbursement rates, or drug pricing regulations could significantly impact TOI's revenue and profitability.
• Competition: The oncology market is highly competitive. Failure to innovate, attract top talent, or maintain competitive pricing could erode market share.
• Clinical Trial Risks: Participation in clinical trials involves inherent risks, including potential failures, delays, or unexpected adverse effects, which could impact reputation and future revenue from this segment.
• Dependence on Key Personnel: TOI's success relies heavily on its experienced clinicians and management team. The loss of key personnel could disrupt operations and strategic execution.

Management Discussion and Analysis (MD&A) Highlights

Management's discussion highlights the key factors influencing the company's financial condition and results of operations for fiscal year 2025.

• Major Wins:

  • Strong Revenue Growth & Profitability: The nearly 18% revenue increase and return to net profitability underscore robust demand for services and improved operational efficiency.
  • Successful Capital Raises: TOI bolstered its financial position by raising $25 million through an "At-The-Market" (ATM) offering, a flexible stock offering allowing sales directly into the market over time. An additional $30 million came via a private placement to institutional investors. These capital infusions provide crucial funding for growth initiatives and working capital.
  • Debt Reduction: The company strategically reduced its convertible debt from $120 million in 2024 to $100 million in 2025, strengthening its balance sheet and reducing future interest obligations.
  • Geographic Expansion: TOI opened 5 new clinics across its key states, expanding patient reach and market presence.

• Key Challenges:

  • Customer Concentration Risk: A substantial 25% ($350 million) of 2025 revenue originated from a single major payor. The loss or renegotiation of this relationship could severely impact financial performance.
  • Supplier Concentration Risk: Similarly, one primary vendor accounted for $200 million of costs. This dependence exposes TOI to potential supply chain disruptions or adverse pricing changes.
  • Rising Operating Costs: While revenue grew, significant increases in IV drug costs, clinician salaries, and medical supplies highlight ongoing inflationary pressures in the healthcare sector.

Financial Health

TOI's financial health improved in 2025, marked by a stronger cash position and reduced debt:

• Cash Position: The company held $50 million in highly liquid Money Market Funds as of December 31, 2025, an increase from $40 million held in US Treasury Securities in 2024. This shift indicates a slightly more aggressive liquidity management strategy.
• Debt: Total convertible debt stood at $100 million, down from $120 million. While reduced, convertible debt carries the risk of shareholder dilution if converted into common stock, potentially increasing the number of outstanding shares and decreasing the value of existing holdings.
• Working Capital: The company maintains typical levels of accounts receivable from patient services and specialty pharmacy, alongside inventory for specialized drugs. Effective management of these assets is crucial for maintaining healthy cash flow and minimizing bad debt.
• Cash Flow Analysis:
  • Cash Flow from Operations (CFO): The company generated approximately $198.75 million in cash from its core business activities, reflecting strong operational performance.
  • Cash Flow from Investing (CFI): TOI utilized $223.75 million for investing activities, primarily for capital expenditures related to clinic expansion and technology upgrades, indicating significant investment in future growth.
  • Cash Flow from Financing (CFF): Financing activities provided $35 million in cash, primarily from the ATM offering and private placement, partially offset by debt repayments.
  • Net Increase in Cash: Overall, cash and cash equivalents increased by $10 million during the year, demonstrating prudent financial management amidst growth investments.

Future Outlook

TOI's strategic focus for the coming years centers on:

• Geographic Expansion: Continued growth of its clinic network in existing and new high-demand markets, targeting 10 new clinics in 2026.
• Integrated Care Model Enhancement: Further integrating its patient services and specialty pharmacy to improve patient outcomes and operational efficiencies.
• Clinical Research Leadership: Expanding its portfolio of clinical trials to remain at the forefront of cancer treatment innovation and attract more research funding.
• Technology Adoption: Investing in advanced oncology technologies and data analytics to enhance diagnostic capabilities and personalized treatment plans.

For 2026, the company projects 12-15% revenue growth and expects to maintain strong profitability, driven by continued patient volume growth and effective cost management.

Competitive Position

Oncology Institute, Inc. operates in a competitive and evolving oncology care market. Its integrated model, combining direct patient services, specialty pharmacy, and clinical research, provides a differentiated offering. The company's presence in high-growth states like California, Florida, and Texas, with a network of 60 clinics, positions it for continued expansion. TOI aims to differentiate through its patient-centric approach, comprehensive care coordination, and participation in cutting-edge research, which attracts both patients and top medical talent.