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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from           to
Commission File Number: 001-39203
1LIFE HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
Delaware76-0707204
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
One Embarcadero Center, Suite 1900
San Francisco, CA 94111
(Address of principal executive offices and zip code)

(415) 814-0927
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading
Symbol(s)
 Name of each exchange on which registered
Common Stock, $0.001 par value ONEM The Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer   Accelerated filer 
    
Non-accelerated filer   Smaller reporting company 
       
  Emerging growth company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  ☒
As of April 30, 2021, the registrant had 137,443,602 shares of common stock, $0.001 par value per share, outstanding. 





Table of Contents
 
  Page
PART I. 
Item 1.
 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
   
PART II. 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
 
Where You Can Find More Information
Investors and others should note that we announce material financial and other information using our investor relations website, press releases, SEC filings and public conference calls and webcasts. We also post supplemental materials on the “Events and Presentations” section of our investor relations website at investor.onemedical.com. Except as specifically noted herein, information on or accessible through our website is not, and will not be deemed to be, a part of this Quarterly Report on Form 10-Q or incorporated by reference into any other filings we may make with the U.S. Securities and Exchange Commission (the “SEC”).
We also use our Facebook, Twitter and LinkedIn accounts as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these accounts, in addition to following our press releases, SEC filings and public conference calls and webcasts. This list may be updated from time to time. The information we post through these channels is not a part of this Quarterly Report on Form 10-Q. These channels may be updated from time to time on our investor relations website.
i


PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
1LIFE HEALTHCARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except par value amounts)
(unaudited)
March 31, 2021December 31, 2020
Assets  
Current assets:  
Cash and cash equivalents$402,721 $112,975 
Short-term marketable securities300,831 570,023 
Accounts receivable, net58,943 67,895 
Inventories4,635 7,113 
Prepaid expenses and other current assets23,530 16,693 
Total current assets790,660 774,699 
Restricted cash1,911 1,911 
Property and equipment, net135,757 126,037 
Right-of-use assets150,770 138,840 
Goodwill21,301 21,301 
Deferred income taxes2,656 2,656 
Other assets5,718 5,546 
Total assets$1,108,773 $1,070,990 
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable$10,961 $12,654 
Accrued expenses56,684 46,527 
Deferred revenue, current47,458 35,966 
Operating lease liabilities, current19,176 17,418 
Other current liabilities8,806 4,861 
Total current liabilities143,085 117,426 
Operating lease liabilities, non-current165,652 153,614 
Convertible senior notes308,438 241,233 
Deferred revenue, non-current7,182 7,624 
Other non-current liabilities2,605 2,618 
Total liabilities626,962 522,515 
Commitments and contingencies (Note 11)
Stockholders' Equity:
Common stock, $0.001 par value, 1,000,000 and 1,000,000 shares authorized as of March 31, 2021 and December 31, 2020, respectively; 137,297 and 134,472 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
137 134 
Additional paid-in capital884,529 918,118 
Accumulated deficit(402,875)(369,785)
Accumulated other comprehensive income20 8 
Total stockholders' equity481,811 548,475 
Total liabilities and stockholders' equity$1,108,773 $1,070,990 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
1


1LIFE HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(unaudited)
 
Three Months Ended March 31,
 20212020
Net revenue$121,352 $78,756 
Operating expenses:
Cost of care, exclusive of depreciation and amortization shown separately below70,092 51,550 
Sales and marketing12,689 11,155 
General and administrative64,345 39,866 
Depreciation and amortization6,607 5,213 
Total operating expenses153,733 107,784 
Loss from operations(32,381)(29,028)
Other income (expense), net:
Interest income105 1,035 
Interest expense(2,843)(54)
Change in fair value of redeemable convertible preferred stock warrant liability (6,560)
Total other expense, net(2,738)(5,579)
Loss before income taxes(35,119)(34,607)
Provision for (benefit from) income taxes4,199 (49)
Net loss(39,318)(34,558)
Less: Net loss attributable to noncontrolling interest (704)
Net loss attributable to 1Life Healthcare, Inc. stockholders$(39,318)$(33,854)
Net loss per share attributable to 1Life Healthcare, Inc.  stockholders — basic and diluted$(0.29)$(0.40)
Weighted average common shares outstanding — basic and diluted136,516 84,884 
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2


1LIFE HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Amounts in thousands)
(unaudited)
 
Three Months Ended March 31,
 20212020
Net loss$(39,318)$(34,558)
Other comprehensive loss:
Net unrealized gain on short-term marketable securities12 44 
Comprehensive loss(39,306)(34,514)
Less: Comprehensive loss attributable to noncontrolling interest (704)
Comprehensive loss attributable to 1Life Healthcare, Inc. stockholders$(39,306)$(33,810)
 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

3


1LIFE HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
(Amounts in thousands)
(unaudited)
 
Three Months Ended March 31, 2021
 Redeemable Convertible Preferred StockCommon StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity (Deficit) Attributable to 1Life Healthcare, Inc. StockholdersNoncontrolling
Interest
Total Stockholders' Equity (Deficit)
 SharesAmountSharesAmount
Balances at December 31, 2020 $ 134,472 $134 $918,118 $(369,785)$8 $548,475 $ $548,475 
Impact of adoption of ASU 2020-06(73,393)6,656 (66,737)(66,737)
Impact of adoption of ASC 326(428)(428)(428)
Exercise of stock options2,584 3 13,476 13,479 13,479 
Issuance of common stock for settlement of RSUs241 — — — 
Stock-based compensation expense26,328 26,328 26,328 
Net unrealized gain on short-term marketable securities12 12 12 
Net loss(39,318)(39,318) (39,318)
Balances at March 31, 2021 $ 137,297 $137 $884,529 $(402,875)$20 $481,811 $ $481,811 
Three Months Ended March 31, 2020
Redeemable Convertible Preferred StockCommon StockAdditional Paid-In CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total Stockholders' Equity (Deficit) Attributable to 1Life Healthcare, Inc. StockholdersNoncontrolling InterestTotal Stockholders' Equity (Deficit)
SharesAmountSharesAmount
Balances at December 31, 201986,252 $402,488 18,952 $19 $93,945 $(281,068)$38 $(187,066)$3,035 $(184,031)
Exercise of redeemable convertible preferred stock warrant5 76 — — 
Conversion of redeemable convertible preferred stock into common stock upon closing of initial public offering(86,257)(402,564)86,257 86 402,478 402,564 402,564 
Issuance of common stock upon closing of initial public offering, net of issuance costs and underwriting fees of $23,631
20,125 20 258,099 258,119 258,119 
Fair value adjustment to redeemable convertible preferred stock warrants upon conversion into common stock warrants13,740 13,740 13,740 
Exercise of stock options294 — 1,534 1,534 1,534 
Exercise of common stock warrants11 — 73 73 73 
Cashless exercise of common stock warrants464 1 — 1 1 
Stock-based compensation expense10,325 10,325 10,325 
Net unrealized gain on short-term marketable securities44 44 44 
Net loss(33,854)(33,854)(704)(34,558)
Balances at March 31, 2020 $ 126,103 $126 $780,194 $(314,922)$82 $465,480 $2,331 $467,811 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
4


1LIFE HEALTHCARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(unaudited)
 
Three Months Ended March 31,
 20212020
Cash flows from operating activities:  
Net loss$(39,318)$(34,558)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Provision for bad debts(60)150 
Depreciation and amortization6,607 5,213 
Amortization of debt discount and issuance costs468  
Accretion of discounts and amortization of premiums on short-term investments, net199 (298)
Change in fair value of redeemable convertible preferred stock warrant liability 6,560 
Reduction of operating lease right-of-use assets4,156 3,177 
Stock-based compensation26,328 10,325 
Other non-cash items202 (1)
Changes in operating assets and liabilities:
Accounts receivable, net8,583 (9,375)
Inventories2,478 (502)
Prepaid expenses and other current assets(4,870)(2,225)
Other assets(171)(232)
Accounts payable(1,248)(4,022)
Accrued expenses8,168 2,552 
Deferred revenue11,050 12,439 
Operating lease liabilities(4,434)(2,411)
Other liabilities3,946 508 
Net cash provided by (used in) operating activities22,084 (12,700)
Cash flows from investing activities:
Purchases of property and equipment(14,808)(20,458)
Purchases of short-term marketable securities(69,995)(47,573)
Proceeds from sales and maturities of short-term marketable securities339,000 101,314 
Net cash provided by investing activities254,197 33,283 
Cash flows from financing activities:
Proceeds from initial public offering 281,750 
Payment of underwriting discount and commissions, and offering costs (20,609)
Proceeds from the exercise of stock options13,479 1,534 
Proceeds from the exercise of redeemable convertible preferred and common stock warrants 110 
Repayment of notes payable (1,100)
Payment of principal portion of finance lease liability(14)(11)
Net cash provided by financing activities13,465 261,674 
Net increase in cash, cash equivalents and restricted cash289,746 282,257 
Cash, cash equivalents and restricted cash at beginning of period115,005 29,329 
Cash, cash equivalents and restricted cash at end of period$404,751 $311,586 
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses$6,115 $6,615 
Offering costs included in accounts payable and accrued expenses$ $713 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per share amounts)
(unaudited)

1.Nature of the Business and Basis of Presentation
1Life Healthcare, Inc. (“1Life”) was incorporated in Delaware on July 25, 2002. 1Life’s headquarters are located in San Francisco, California. 1Life has developed a modernized healthcare membership model based on direct consumer enrollment as well as employer sponsorship. 1Life is also an administrative and managerial services company that provides services pursuant to contracts with physician-owned professional corporations (“PCs”) or “One Medical Entities” that provide medical services in-office and virtually. 1Life and the One Medical Entities are collectively referred to herein as the “Company” and operate under the brand name One Medical.
Basis of Presentation
The Company has prepared the accompanying unaudited condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), which include the accounts of 1Life and variable interest entities (“VIE”) in which 1Life has an interest and is the primary beneficiary (see Note 3, “Variable Interest Entities”). Pursuant to these rules and regulations, the Company has condensed or omitted certain information and footnote disclosures it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). All significant intercompany balances and transactions have been eliminated in consolidation. The noncontrolling interest attributable to the Company’s variable interest entities are presented as a separate component of equity in the condensed consolidated balance sheets. In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly state its condensed consolidated financial position, results of operations, comprehensive loss and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 as filed with the SEC on March 17, 2021 (the “Form 10-K”).
Use of Estimates
The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP and regulations of the SEC requires management to make estimates and assumptions that affect the amount reported in the condensed consolidated financial statements and accompanying notes. Estimates include, but are not limited to, revenue recognition, determination of useful lives for property and equipment, intangible assets including goodwill, capitalized internal-use software, allowance for doubtful accounts, self-insurance reserves, valuation of common stock, stock options valuations, convertible senior notes fair value, contingent liabilities and income taxes. Actual results could differ materially from those estimates.
Due to the COVID-19 global pandemic, the global economy and financial markets have been disrupted and there continues to be a significant amount of uncertainty about the length and severity of the consequences caused by the pandemic. The Company has considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or an adjustment to the carrying value of its assets or liabilities. The accounting estimates and other matters assessed include, but were not limited to, revenue recognition, allowance for doubtful accounts and goodwill and other long-lived assets. These estimates may change as new events occur and additional information becomes available. Actual results could differ materially from these estimates.
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020. Intended to provide economic relief to those impacted by the COVID-19 pandemic, the CARES Act includes various tax and lending provisions, among others. Under the CARES Act, the Company received an income grant from the Provider Relief Fund administered by the Department of Health and Human Services (“HHS”) during the three months ended March 31, 2021. See Note 5, “Revenue Recognition”.
Cash, Cash Equivalents and Restricted Cash
The Company considers all short-term, highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash deposits are all in financial institutions in the United States. Cash and cash equivalents consisted of cash on deposit, investments in money market funds and commercial paper. Restricted cash
6


represents cash held under letters of credit for various leases. The expected duration of restrictions on the Company’s restricted cash generally ranges from 1 to 9 years.
The reconciliation of cash, cash equivalents and restricted cash reported within the applicable balance sheet line items that sum to the total of the same such amount shown in the condensed consolidated statements of cash flows is as follows:
 March 31,December 31,March 31,December 31,
 2021202020202019
Cash and cash equivalents$402,721 $112,975 $309,647 $27,390 
Restricted cash, current (included in prepaid expenses and other current assets)119 119 17 17 
Restricted cash, non-current1,911 1,911 1,922 1,922 
Total cash, cash equivalents, and restricted cash$404,751 $115,005 $311,586 $29,329 
Concentration of Credit Risk and Significant Customers
Financial instruments that potentially subject the company to concentration of credit risk consist of cash, cash equivalents, marketable securities and accounts receivable. The Company’s cash balances with individual banking institutions might be in excess of federally insured limits. Cash equivalents are invested in highly rated money market funds and commercial paper. The Company’s marketable securities are invested in U.S. Treasury obligations, U.S. government agency securities, foreign government bonds and commercial paper. The Company is not exposed to any significant concentrations of credit risk from these financial instruments. The Company has not experienced any losses on its deposits of cash, cash equivalents or marketable securities. The Company grants unsecured credit to patients, most of whom reside in the service area of the One Medical facilities and are largely insured under third-party payer agreements. The Company’s concentration of credit risk is limited by the diversity, geography and number of patients and payers.
The table below presents the customers that individually represented 10% or more of the Company’s accounts receivable, net balance as of March 31, 2021 and December 31, 2020. 
 March 31,December 31,
 20212020
Customer A10 %*
Customer E11 %12 %
Customer F18 %24 %
Customer H16 %16 %
* Represents percentages below 10% of the Company’s accounts receivable in the period.
The table below presents the customers that individually represented 10% or more of the Company’s net revenue for the three months ended March 31, 2021 and 2020.
 Three Months Ended March 31,
 20212020
Customer A12 %13 %
Customer E*11 %
Customer F12 %11 %
* Represents percentages below 10% of the Company’s net revenue in the period.
 
2.Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in Note 2 “Summary of Significant Accounting Policies” in Item 15 of its Form 10-K for the fiscal year ended December 31, 2020.
7


Emerging Growth Company Status
The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Recently Adopted Pronouncements as of March 31, 2021
In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by removing certain separation models in Subtopic 470-20, Debt—Debt with Conversion and Other Options, for convertible instruments and also increases information transparency by making disclosure amendments. The standard is effective for private companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.
The Company early adopted this standard on January 1, 2021 on a modified retrospective basis. Under previous GAAP, instruments that may be partially settled in cash were in the scope of the “cash conversion” model, which required conversion features to be separately reported in equity. Upon the adoption of ASU 2020-06, the cash conversion model was eliminated and the Company no longer separates its convertible senior notes (“the 2025 Notes”) into liability and equity components and instead accounts for the 2025 Notes as a single liability instrument. As a result, there is no longer a debt discount or subsequent amortization to be recognized as interest expense. Further, ASU 2020-06 requires the use of the if-converted method for diluted earnings per share calculation, and no longer allows the use of the treasury stock method for instruments with flexible settlement arrangements. Under the previous treasury stock method, only the excess of the average stock price of the Company’s common stock for the reporting period over the conversion price was used in determining the impact to the diluted earnings per share denominator. Under the current if-converted method, all underlying shares shall be included in the denominator regardless of the average stock price for the reporting period, in addition to adding back to the numerator the related interest expense from the stated coupon and the amortization of issuance costs, if dilutive.
The prior period consolidated financial statements have not been retrospectively adjusted and continue to be reported under the accounting standards in effect for those periods. Accordingly, the cumulative-effect adjustment to the opening balance of accumulated deficit as of January 1, 2021 was as follows:
December 31, 2020
As Reported
Effect of the Adoption of ASU 2020-06January 1, 2021
As Adjusted
Liabilities
   Convertible senior notes $241,233 $66,737 $307,970 
Stockholders' Equity
   Additional paid-in capital918,118 (73,393)844,725 
   Accumulated deficit(369,785)6,656 (363,129)
The impact of adoption on the condensed consolidated statements of operations for the three months ended March 31, 2021 was primarily a reduction of non-cash interest expense of $3,169. The reduction in interest expense decreased the net loss attributable to common stockholders and decreased the basic net loss per share. The required use of the if-converted method for earnings per share does not impact the diluted net loss per share as long as the Company is in a net loss position. The adoption had no impact on the condensed consolidated statement of cash flows.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and also issued subsequent amendments to the initial guidance (collectively, Topic 326). Topic 326 replaces the existing incurred loss impairment model with an expected credit loss model and requires a financial asset measured at amortized cost to be presented at the net amount expected to be collected. The Company early adopted the
8


standard on January 1, 2021 using a modified retrospective approach with no material impact to the condensed consolidated financial statements. The adoption of the standard did not significantly change the Company's approach to the valuation of trade receivables. The Company regularly reviews the adequacy of the allowance for credit losses based on a combination of factors, including historical losses adjusted for current market conditions, the Company's customers' financial condition, delinquency trends, aging behaviors of receivables and credit and liquidity indicators for industry groups, and future market and economic conditions. As of March 31, 2021, the allowance for credit losses was not material. For available-for-sale debt securities with unrealized losses, the standard limits the amount of credit losses to be recognized to the amount by which carrying value exceeds fair value and requires the reversal of previously recognized credit losses if fair value increases. As of March 31, 2021, there were no available-for sale debt securities allowance for credit losses.
In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use-software. The Company adopted the standard on January 1, 2021 on a prospective basis. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted as of March 31, 2021
There have been no recent accounting pronouncements or changes in accounting pronouncements that are of significance or potential significance to the Company as of March 31, 2021.

3.Variable Interest Entities
1Life’s agreements with the PCs generally consist of both Administrative Services Agreements (“ASAs”), which provide for various administrative and management services to be provided by 1Life to the PC, and Succession Agreements, which provide for transition of ownership of the PCs under certain conditions.
The ASAs typically provide that the term of the arrangements is ten years with automatic renewal for successive one-year terms, subject to termination by 1Life or the PC in certain specified circumstances. The outstanding voting equity instruments of the PCs are owned by nominee shareholders appointed by 1Life (or the PC in one instance) under the terms of the Succession Agreements or other shareholders who are also subject to the terms of the Succession Agreements. 1Life has the right to receive income as an ongoing administrative fee in an amount that represents the fair value of services rendered and has provided all financial support through loans to the PCs. 1Life has exclusive responsibility for the provision of all nonmedical services including facilities, technology and intellectual property required for the day-to-day operation and management of each of the PCs, and makes recommendations to the PC in establishing the guidelines for the employment and compensation of the physicians and other employees of the PCs. In addition, the agreements provide that 1Life has the right to designate a person(s) to purchase the stock of the PCs for a nominal amount in the event of a succession event. Based upon the provisions of these agreements, 1Life determined that the PCs are variable interest entities due to its equity holder having insufficient capital at risk, and 1Life has a variable interest in the PCs.
The contractual arrangement to provide management services allows 1Life to direct the economic activities that most significantly affect the PC. Accordingly, 1Life is the primary beneficiary of the PCs and consolidates the PCs under the VIE model. Furthermore, as a direct result of nominal initial equity contributions by the physicians, the financial support 1Life provides to the PCs (e.g. loans) and the provisions of the nominee shareholder succession arrangements described above, the interests held by noncontrolling interest holders lack economic substance and do not provide them with the ability to participate in the residual profits or losses generated by the PCs. Therefore, all income and expenses recognized by the PCs are allocated to 1Life stockholders. The aggregate carrying value of the current assets and liabilities included in the condensed consolidated balance sheets for the PCs after elimination of intercompany transactions and balances were $47,859 and $35,590, respectively, as of March 31, 2021 and $48,182 and $31,462, respectively, as of December 31, 2020. The PCs did not have noncurrent assets or liabilities.

9


4.Fair Value Measurements and Investments
Fair Value Measurements
The following tables present information about the Company’s financial assets measured at fair value on a recurring basis:
 Fair Value Measurements as of March 31, 2021 Using:
 Level 1Level 2Level 3Total
Assets:    
Cash equivalents:
Money market fund$339,708 $ $ $339,708 
Short-term investments:
U.S. Treasury obligations145,898   145,898 
Foreign government bonds 5,075  5,075 
Commercial paper 149,858  149,858 
 Total financial assets$485,606 $154,933 $ $640,539 
 Fair Value Measurements as of December 31, 2020 Using:
 Level 1Level 2Level 3Total
Assets:    
Cash equivalents:
Money market fund$50,761 $ $ $50,761 
Commercial paper 19,999  19,999 
Short-term investments:
U.S. Treasury obligations416,158   416,158 
U.S. government agency securities20,000   20,000 
Commercial paper 133,865  133,865 
 Total financial assets$486,919 $153,864 $ $640,783 
During the three months ended March 31, 2021 and 2020, there were no transfers between Level 1, Level 2 and Level 3.
Valuation of Convertible Senior Notes
The Company has $316,250 aggregate principal amount outstanding of 3.0% convertible senior notes due in 2025 (the “2025 Notes”). Please refer to Note 7, “Convertible Senior Notes” for further details on the 2025 Notes.
The fair value of the 2025 Notes was $378,273 and $397,472 as of March 31, 2021 and December 31, 2020, respectively. The fair value was determined based on the closing trading price of the 2025 Notes as of the last day of trading for the period. The fair value of the 2025 Notes is primarily affected by the trading price of the Company's common stock and market interest rates. The fair value of the 2025 Notes is considered a Level 2 measurement as they are not actively traded.
10


Investments
At March 31, 2021 and December 31, 2020, the Company’s cash equivalents and short-term marketable securities were as follows:
 March 31, 2021
Amortized
cost
Gross
unrealized
gains (losses)
Fair value
Cash equivalents:
Money market fund$339,708 $— $339,708 
Short-term marketable securities:
U.S. Treasury obligations145,876 22 145,898 
Foreign government bonds5,077 (2)5,075 
Commercial paper149,858  149,858 
Total short-term marketable securities300,811 20 300,831 
Total cash equivalents and short-term marketable securities$640,519 $20 $640,539 
 December 31, 2020
Amortized
cost
Gross
unrealized
gains (losses)
Fair value
Cash equivalents:
Money market fund$50,761 $— $50,761 
Commercial paper19,999 — 19,999 
Total cash equivalents70,760 — 70,760 
Short-term marketable securities:
U.S. Treasury obligations416,150 8 416,158 
U.S. government agency securities20,000  20,000 
Commercial paper133,865  133,865 
Total short-term marketable securities570,015 8 570,023 
Total cash equivalents and short-term marketable securities$640,775 $8 $640,783 

5.Revenue Recognition
The following table summarizes the Company’s net revenue by primary source:
Three Months Ended March 31,
 20212020
Net revenue:  
Net patient service revenue$44,462 $34,086 
Partnership revenue54,931 29,455 
Total net patient service and partnership revenue99,393 63,541 
Membership revenue20,196 15,215 
Grant income1,763  
Net revenue$121,352 $78,756 
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Net patient service revenue is primarily generated from commercial third-party payers with which the One Medical entities have established contractual billing arrangements. The following table summarizes net patient service revenue by source:
Three Months Ended March 31,
 20212020
Net patient service revenue:  
Commercial and government third-party payers$42,235 $29,891 
Patients, including self-pay, insurance co-pays and deductibles2,227 4,195 
Net patient service revenue$44,462 $34,086 
The CARES Act was enacted on March 27, 2020 to provide economic relief to those impacted by the COVID-19 pandemic. The CARES Act includes various tax and lending provisions, among others. Under the CARES Act, the Company received an income grant of $1,763 from the Provider Relief Fund administered by the Health and Human Services ("HHS") during the three months ended March 31, 2021. Management has concluded that the Company met conditions of the grant funds and has recognized it as Grant income for the three months ended March 31, 2021.
During the three months ended March 31, 2021, the Company recognized revenue of $14,321, which was included in the beginning deferred revenue balance as of January 1, 2021. During the three months ended March 31, 2020, the Company recognized revenue of $9,441, which was included in the beginning deferred revenue balance as of January 1, 2020, respectively.
As of March 31, 2021, a total of $6,571 is included within deferred revenue related to variable consideration, of which $5,613 is classified as non-current as it will not be recognized within the next twelve months. The estimate of variable consideration is based on the Company’s assessment of historical, current, and forecasted performance.
As summarized in the table below, the Company recorded contract assets and deferred revenue as a result of timing differences between the Company’s performance and the customer’s payment.
 March 31,December 31,
 20212020
Balances from contracts with customers:  
Accounts receivable$58,943 $67,895 
Contract asset (included in prepaid expenses and other current assets)990 513 
Deferred revenue54,640 43,590 
The Company does not disclose the value of remaining performance obligations for (i) contracts with an original contract term of one year or less, (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice when that amount corresponds directly with the value of services performed, and (iii) variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied distinct service that forms part of a single performance obligation. For those contracts that do not meet the above criteria, the Company’s remaining performance obligation as of March 31, 2021, is expected to be recognized as follows:
Less than
or equal to
12 months
Greater
than
12 months
Total
As of March 31, 2021$4,116 $9,723 $13,839 

6.Leases
Most leases contain clauses for renewal at the Company’s option with renewal terms that generally extend the lease term from 1 to 7 years. Certain lease agreements contain options to terminate the lease before maturity. The Company does not have any lease contracts with the option to purchase as of March 31, 2021. The Company’s lease agreements do not contain any significant residual value guarantees or material restrictive covenants imposed by the leases.
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Certain of the Company’s furniture and fixtures and lab equipment are held under finance leases. Lease-related assets are included in property and equipment, net in the condensed consolidated balance sheets and are immaterial as of March 31, 2021.
The components of operating lease costs were as follows:
 Three Months Ended March 31,
20212020
Operating lease costs$7,333 $5,960 
Variable lease costs1,311 1,016 
Total lease costs$8,644 $6,976 
Other information related to leases was as follows:
Supplemental Cash Flow Information
 Three Months Ended March 31,
20212020
Cash paid for amounts included in the  measurement of lease liabilities:  
Operating cash flows from operating leases$7,855 $5,438 
Non-cash leases activity:
Right-of-use lease assets obtained in exchange for new operating lease liabilities$16,086 $23,607 
Lease Term and Discount Rate
 March 31,December 31,
20212020
Weighted-average remaining lease term (in years)8.308.36
Weighted-average discount rate7.37 %7.60 %
At the lease commencement date, the discount rate implicit in the lease is used to discount the lease liability if readily determinable. If not readily determinable or leases do not contain an implicit rate, the Company’s incremental borrowing rate is used as the discount rate. Management determines the appropriate incremental borrowing rates for each of its leases based on the remaining lease term at lease commencement.
Future minimum lease payments under non-cancellable operating leases as of March 31, 2021 were as follows (excluding the effect of lease incentives to be received that are recorded in prepaid expenses and other current assets of $6,350 which serve to reduce total lease payments):
 March 31, 2021
Remainder of 2021
$24,169 
202231,309 
202330,322 
202429,137 
202527,066 
Thereafter109,191 
Total lease payments251,194 
Less: interest(66,366)
Total lease liabilities$184,828 

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7.Convertible Senior Notes
In May 2020, the Company issued and sold $275,000 aggregate principal amount of 3.0% convertible senior notes due 2025 in a private offering exempt from the registration requirements of the Securities Act of 1933, and in June 2020, the Company issued an additional $41,250 aggregate principal amount of such notes pursuant to the exercise in full of the over-allotment option by the initial purchasers of the notes (the “2025 Notes”). The 2025 Notes are unsecured obligations and bear interest at a fixed rate of 3.0% per annum, payable semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2020. The 2025 Notes will mature on June 15, 2025, unless earlier converted, redeemed or repurchased. The total net proceeds from the debt offering, after deducting the initial purchasers’ commissions and other issuance costs, were $306,868
Each $1 principal amount of the 2025 Notes will initially be convertible into 22.5052 shares of the Company’s common stock, which is equivalent to an initial conversion price of $44.43 per share, subject to adjustment upon the occurrence of specified events but not for any accrued and unpaid interest.
Holders may convert the 2025 Notes at their option at any time prior to the close of business on the business day immediately preceding March 15, 2025 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on September 30, 2020 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined below) per $1 principal amount of the 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) if the Company calls such 2025 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. It is the Company’s current intent to settle conversions through combination settlement consisting of cash and equity.
On or after March 15, 2025 until the close of business on the business day immediately preceding the maturity date, holders may convert all or any portion of their 2025 Notes at any time, regardless of the foregoing circumstances. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election and in accordance with the terms of the indenture governing the 2025 Notes. If the Company satisfies its conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of the Company’s common stock, the amount of cash and shares of common stock, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 40 trading day observation period. In addition, following certain corporate events that occur prior to the maturity date or if the Company delivers a notice of redemption, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its 2025 Notes in connection with such a corporate event or notice of redemption, as the case may be. If the Company undergoes a fundamental change prior to the maturity date, holders of the 2025 Notes may require the Company to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
In addition, if specific corporate events occur prior to the applicable maturity date, the Company will increase the conversion rate for a holder who elects to convert their 2025 Notes in connection with such a corporate event in certain circumstances. The Company may not redeem the 2025 Notes prior to June 20, 2023. The Company may redeem for cash all or any portion of the 2025 Notes, at the Company’s option, on or after June 20, 2023 and prior to March 15, 2025, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the 2025 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the notes. During the three months ended March 31, 2021, the conditions allowing holders of the 2025 Notes to convert have not been met. The 2025 Notes are therefore not convertible as of March 31, 2021 and are classified in long term liabilities in the condensed consolidated balance sheet.
The Company adopted ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40), ("ASU 2020-06"), as of January 1, 2021. Under ASU 2020-06, the Company is no longer required to bifurcate the equity component from the liability component for the 2025 Notes and instead accounts for it as a single liability instrument. Comparative prior period consolidated financial
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statements have not been restated for ASU 2020-06 and are not directly comparable to the current period condensed consolidated financial statements. See Note 2 "Summary of Significant Accounting Policies" for details on adoption impact. The Company incurred issuance costs of $9,374 and amortizes the issuance costs to interest expense over the contractual term of the 2025 Notes at an effective interest rate of 0.65%.
The net carrying amount of the 2025 Notes was as follows:
 March 31,
 2021
Liabilities:
Principal$316,250 
Unamortized issuance costs(7,812)
Net carrying amount$308,438 
The following table sets forth the interest expense recognized related to the 2025 Notes:
 Three Months Ended March 31,
 2021
Contractual interest expense$2,372 
Amortization of issuance costs469 
Total interest expense related to the 2025 Notes$2,841 

8.Stock-Based Compensation
Stock Incentive Plan
The Company has the following stock-based compensation plans: 2007 Equity Incentive Plan (the “2007 Plan”), the 2017 Equity Incentive Plan (the “2017 Plan”), and the 2020 Equity Incentive Plan (the “2020 Plan”, and, together with the 2007 Plan and the 2017 Plan, the “Plans”).
In January 2020, the Company’s stockholders approved the Company’s 2020 Equity Incentive Plan, which took effect upon the execution of the underwriting agreement for the Company’s IPO in January 2020. The 2020 Plan is intended as the successor to and continuation of the 2007 Plan and the 2017 Plan. No additional stock awards will be granted under these prior plans. The number of shares of common stock reserved for issuance under the Company’s 2020 Plan will automatically increase on January 1 of each year, beginning on January 1, 2021, and continuing through and including January 1, 2030, by 4% of the total number of shares of common stock outstanding on December 31 of the immediately preceding calendar year, or a lesser number of shares determined by the Company’s board prior to the applicable January 1st. The number of shares issuable under the Plans is adjusted for capitalization changes, forfeitures, expirations and certain share reacquisitions. The Plan provides for the grants of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), restricted stock awards, and restricted stock unit awards (“RSUs”). ISOs may be granted only to employees, including officers. All other awards may be granted to employees, including officers, non-employee directors and consultants. The 2020 Plan provides that grants of ISOs will be made at no less than the estimated fair value of common stock, as determined by the Board of Directors, at the date of grant. Stock options granted to employees and nonemployees under the Plans generally vest over four years. Options granted under the Plans generally expire ten years after the date of grant.
At March 31, 2021, 11,515 shares were available for future grants.
2020 Employee Stock Purchase Plan
In January 2020, the Company’s stockholders approved the 2020 Employee Stock Purchase Plan (“ESPP”) Plan. The 2020 ESPP became effective upon the execution of the underwriting agreement for the Company’s IPO in January 2020. The Company had initially reserved 2,800 shares of common stock for issuance under the 2020 ESPP. Effective as of January 1, 2021, an additional 2,017 shares of common stock became available for issuance under the ESPP, as a result of the operation of an automatic annual increase provision therein. At March 31, 2021, 4,468 shares were available for future issuance.
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The initial offering period ran from January 31, 2020 to August 15, 2020 and the second offering period ran from August 16, 2020 to November 15, 2020. For subsequent periods, the ESPP will provide for separate six-month offering periods beginning on May 16 and November 16 of each year.
The stock-based compensation expense recognized for the ESPP was $621 and $410 during the three months ended March 31, 2021 and 2020, respectively.
Stock Options
The following table summarizes stock option activity under the 2020 Plan:
Number of
Options
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Term (Years)
Aggregate
Intrinsic
Value
Outstanding as of December 31, 202028,273 $18.03 8.20$724,339 
Granted543 42.68 
Exercised(2,584)5.22 
Canceled(72)7.70 
Outstanding as of March 31, 202126,160 $19.84 8.14$541,965 
Options exercisable as of March 31, 20218,085 $5.48 6.67$271,754 
Options vested and expected to vest as of March 31, 202115,302 $20.58 8.13$481,135 
At March 31, 2021 and 2020, there was $17,897 and $19,515, respectively, in unrecognized compensation expense related to service-based options, net of forfeitures, that is expected to be recognized over a weighted-average period of 1.9 years and 2.1 years, respectively.
The fair value of stock option grants with service-based vesting conditions was $12,168 and $1,250 for the three months ended March 31, 2021 and 2020, respectively.
Market-based Stock Options
During the year ended December 31, 2020, the Board of Directors (“Board”) approved the grant of a long-term market-based stock option (the “Performance Stock Option”) to the Company’s Chief Executive Officer and President. The Performance Stock Option was granted to acquire up to 8,645 shares of the Company’s common stock upon exercise. The Performance Stock Option consists of four separate tranches and each tranche will vest over a seven-year time period and only if the Company’s stock price sustains achievement of pre-determined increases for a period of 90 consecutive calendar days and the Chief Executive Officer remains employed with the Company. The exercise price per share of the Stock Option is the closing price of a share of the Company’s common stock on the date of grant. The vesting of the Performance Stock Option can also be triggered upon a change in control. The following table presents additional information relating to each tranche of the Performance Stock Option:
TrancheStock Price MilestoneNumber of Options
Tranche 1
 $55 per share
1,330 
Tranche 2
 $70 per share
1,995 
Tranche 3
 $90 per share
2,660 
Tranche 4
 $110 per share
2,660 
As of March 31, 2021, no stock price milestones have been achieved. Consequently, no shares subject to the Performance Stock Option have vested as of the date of this filing. The entire 8,645 shares granted are excluded from options vested and expected to vest from the options activity table presented above.
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The Company will recognize aggregate stock-based compensation expense of $197,469 over the derived service period of each tranche using the accelerated attribution method as long as the service-based vesting conditions are satisfied. If the market conditions are achieved sooner than the derived service period, the Company will adjust its stock-based compensation to reflect the cumulative expense associated with the vested awards. The Company recorded stock-based compensation expense of $14,926 related to the award for the three months ended March 31, 2021, which is included in general and administrative on the condensed consolidated statements of operations. Unamortized stock-based compensation expense related to the award was $182,052 as of March 31, 2021.
Restricted Stock Units
The following table summarizes restricted stock unit activity under the 2020 Plan:
Number of
Shares
Grant Date
Fair Value
Unvested and outstanding as of December 31, 20201,291 $22.14 
Granted871 42.68 
Vested(241)21.27 
Canceled and forfeited(74)26.12 
Unvested and outstanding as of March 31, 20211,847 $31.78 
Stock-Based Compensation Expense
Stock-based compensation expense was classified in the condensed consolidated statements of operations as follows:
 Three Months Ended March 31,
 20212020
Sales and marketing$1,023 $600 
General and administrative25,305 9,725 
Total$26,328 $10,325 
A tax benefit of $30,394 and $55 for the three months ended March 31, 2021 and 2020, respectively, was included in the Company’s net operating loss carry-forward that could potentially reduce future tax liabilities.

9.Income Taxes
The Company recorded an income tax provision of $4,199 and an income tax benefit of $49 to continuing operations for the three months ended March 31, 2021 and 2020, respectively. This represents an effective tax rate for the respective periods of (12.0%) and 0.2% for the three months ended March 31, 2021 and 2020, respectively. The Company reassessed the ability to realize deferred tax assets by considering the available positive and negative evidence. As of March 31, 2021, the Company maintains a partial valuation allowance against its net deferred tax assets. The effective tax rate differs in 2021 from the federal statutory rate due to increased taxable income in profitable entities and the change in need for valuation allowance. The effective tax rate differs in 2020 from the federal statutory rate due to the change in need for valuation allowance.
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10.Net Loss Per Share
Net Loss Per Share Attributable to 1Life Healthcare, Inc. Stockholders
Basic and diluted net loss per share attributable to 1Life Healthcare, Inc. stockholders were calculated as follows:
 Three Months Ended March 31,
 20212020
Numerator:  
Net loss$(39,318)$(34,558)
Less: Net loss attributable to noncontrolling interest (704)
Net loss attributable to 1Life Healthcare, Inc. stockholders$(39,318)$(33,854)
Denominator:
Weighted average common shares outstanding — basic and diluted136,516 84,884 
Net loss per share attributable to 1Life Healthcare, Inc. stockholders — basic and diluted$(0.29)$(0.40)
The Company’s potentially dilutive securities, which include stock options, unvested RSUs, 2025 Notes, redeemable convertible preferred stock and warrants to purchase shares of redeemable convertible preferred stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to 1Life Healthcare, Inc. stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to 1Life Healthcare, Inc. stockholders for the periods indicated because including them would have had an anti-dilutive effect:
 Three Months Ended March 31,
 20212020
Options to purchase common stock26,160 27,580 
Unvested restricted stock1,847 1,200 
Warrants to purchase common stock