BOSTON, Aug. 04, 2025 (GLOBE NEWSWIRE) -- Block & Leviton LLP is investigating agilon health, Inc. (NYSE: AGL) for potential securities law violations. Investors who have lost money in their agilon investment should contact the firm to learn more about how they might recover those losses. For more details, visit https://blockleviton.com/cases/agl. Block & Leviton is investigating whether the Company committed securities law violations and may file an action to attempt to recover losses on behalf of investor ...

Financial Data and Key Metrics Changes - The total revenue for Q2 2025 was $1.4 billion, down from $1.48 billion in Q2 2024, primarily due to lower risk adjustment contributions and unfavorable developments in Part D [29][30] - The medical margin for Q2 2025 was negative $53 million, compared to a positive $106 million in Q2 2024, driven by underperformance in the burden of illness program [30][32] - Adjusted EBITDA for Q2 2025 was negative $83 million, compared to negative $3 million in Q2 2024, reflecting the impact of lower risk adjustments and unfavorable prior period developments [32] Business Line Data and Key Metrics Changes - Medicare Advantage membership at the end of Q2 2025 was 498,000, down from 513,000 in Q2 2024, reflecting a measured approach to membership growth [28] - ACO REACH membership in Q2 2025 was 116,000, down from 132,000 in 2024, aligning with expectations [28] Market Data and Key Metrics Changes - The company reported a medical cost trend of 5.9% for Q2 2025, consistent with the previous year's trend of 6% [33] - The company has successfully reduced its exposure to Medicare Part D, with less than 30% of its membership carrying Part D risk in 2025 [34] Company Strategy and Development Direction - The company is focused on improving contract economics and bid visibility with payers, enhancing its data platform, and reducing variability in its business [35] - The leadership transition aims to strengthen execution and improve relationships critical to future success [11][12] - The company is committed to enhancing performance and positioning itself for sustainable value creation, particularly with the improved Medicare reimbursement model expected to take effect next year [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 is a transition year with challenges that were more acute than previously expected, leading to underperformance [9][10] - The company expects to see the results of strategic initiatives in 2026, with a focus on improving operational and financial performance [16][17] - Management expressed confidence in the long-term value of the company's model and its ability to deliver significant growth opportunities [10][15] Other Important Information - The company has withdrawn its previously issued full-year 2025 financial guidance due to ongoing market uncertainties [34] - The leadership team is recalibrating the organization's culture to emphasize urgency, accountability, and performance [12] Q&A Session Summary Question: Clarification on potential positive PYD in Q3 and growth rate into 2026 - Management indicated that there was a small amount of favorable development on quality programs, but the significant negative developments were related to risk adjustment and Part D costs [39][40] Question: Call trends and cost trends development - Management confirmed that Q1 cost trends were around 6%, and Q2 trends were consistent with Q1, but July data was less complete [44] Question: 2026 class commentary and glide path strategy - Management stated that growth for 2026 is under review and they will be highly selective on future growth due to current business performance [57] Question: 2026 bidding insights - Management noted that payers are looking for improved economics as they head into 2026, and negotiations are ongoing [59][62] Question: CEO search criteria - The company is looking for a CEO with multi-market management capability, experience with primary care physicians, and strong operational rigor [67] Question: Quality incentives and their impact - Management highlighted that payers are increasingly willing to include more quality incentives in contracts, which could lead to increased dollars available for performance [72][73]

Financial Data and Key Metrics Changes - The company reported total revenue for Q2 2025 of $1.4 billion, down from $1.48 billion in Q2 2024, primarily due to lower risk adjustment contributions and unfavorable developments in Part D costs [29][30] - Medical margin for Q2 2025 was negative $53 million, compared to positive $106 million in Q2 2024, driven by underperformance in the burden of illness program [30][33] - Adjusted EBITDA for Q2 2025 was negative $83 million, compared to negative $3 million in Q2 2024, reflecting the impact of lower risk adjustments and unfavorable prior period developments [33] Business Line Data and Key Metrics Changes - Medicare Advantage membership at the end of Q2 2025 was 498,000, down from 513,000 in Q2 2024, reflecting a measured approach to membership growth [28] - ACO REACH membership in Q2 2025 was 116,000, down from 132,000 in 2024, aligning with expectations [28] Market Data and Key Metrics Changes - The company has reduced its exposure to Medicare Part D, with less than 30% of its membership carrying Part D risk in 2025, and aims to further decrease this as it enters 2026 [35] - The company expects its same geography growth rate to align with the broader industry for 2025 [28] Company Strategy and Development Direction - The company is focused on improving contract economics and bid visibility with payers, enhancing its data platform, and reducing variability in its business [36] - The leadership transition aims to drive improved execution and strengthen relationships critical to future success [10][11] - The company is committed to enhancing performance and Agilent's position for sustainable value creation, particularly with the improved Medicare reimbursement model expected to take effect next year [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that 2025 is a transition year with industry complexities and headwinds that were more acute than previously expected, leading to underperformance [8][9] - The company is optimistic about realizing the benefits of strategic initiatives in 2026, despite current challenges [7][36] Other Important Information - The company has withdrawn its previously issued full-year 2025 financial guidance due to ongoing market uncertainty [35] - The leadership team is recalibrating the organization's culture to emphasize urgency, accountability, and performance [11] Q&A Session Summary Question: Clarification on potential positive PYD in Q3 and growth rate into 2026 - Management indicated that there was a small amount of favorable development on quality programs, but the most significant pieces of development were unfavorable, particularly related to risk adjustment [40][41][42] Question: Insights on call trends and cost trends - Cost trends for Q1 were around 6%, and Q2 trends were consistent with Q1, but July data was not yet complete [46][47] Question: Commentary on 2026 class and glide path strategy - Management confirmed that growth for 2026 is under review and will be highly selective based on current business performance [59] Question: Insights on bidding for 2026 - Management noted that payers are looking for improved economics as they head into 2026, and negotiations are ongoing [61][62] Question: CEO search criteria - The company is looking for a CEO with multi-market management capability, experience with primary care physicians, and operational rigor [68][69] Question: Quality incentives and their potential impact - Management expects an increase in quality incentive dollars from 2025 to 2026, as payers are more willing to put dollars at risk for higher performance [75][76]

Financial Performance - Total revenues reached $1395 million[23] - Gross profit was -$52 million[23] - Medical margin was -$53 million[23] - Net loss amounted to -$104 million[23] - Adjusted EBITDA was -$83 million[23] Risk Adjustment Impact - Revised risk adjustment for 2024 and 2025 impacted performance, with a total RAF impact of $85 million[19] - This includes $37 million for FY'24 and $48 million YTD in FY'25[19] - 2024 risk adjustment is now estimated at approximately 12%[22] Membership - Medicare Advantage members totaled 498000[23] - ACO Model members numbered 116000[23] - Total members live on the platform reached 614000[23] Strategic Actions - The company is recalibrating organizational culture to drive urgency, accountability, and performance[6] - The company is accelerating strategic actions to deliver sustainable long-term profitability[9]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents agilon health's unaudited condensed consolidated financial statements and notes for periods ended June 30, 2025, and December 31, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $1,712,895 | $1,733,983 | | Total Liabilities | $1,303,966 | $1,263,031 | | Total Stockholders' Equity (Deficit) | $408,929 | $470,952 | | Cash and Cash Equivalents | $171,416 | $188,231 | | Marketable Securities | $155,585 | $211,737 | | Medical Claims and Related Payables | $1,042,257 | $931,664 | - Total assets decreased by **$21.1 million** from December 31, 2024, to June 30, 2025, primarily due to decreases in cash and cash equivalents and marketable securities[10](index=10&type=chunk) - Total liabilities increased by **$40.9 million**, driven by a significant increase in medical claims and related payables[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $1,394,982 | $1,482,758 | $2,927,764 | $3,087,112 | | Total Expenses | $1,511,009 | $1,526,102 | $3,065,901 | $3,137,634 | | Income (Loss) from Operations | $(116,027) | $(43,344) | $(138,137) | $(50,522) | | Net Income (Loss) | $(104,370) | $(30,662) | $(92,258) | $(36,696) | | Net Income (Loss) per Common Share, Basic and Diluted (Continuing Operations) | $(0.25) | $(0.07) | $(0.25) | $(0.07) | | Net Income (Loss) per Common Share, Basic and Diluted (Discontinued Operations) | $0.00 | $0.00 | $0.03 | $(0.02) | - Total revenues decreased by **6%** for the three months ended June 30, 2025, and by **5%** for the six months ended June 30, 2025, compared to the respective prior periods[13](index=13&type=chunk) - Net loss significantly widened to **$(104.4) million** for the three months ended June 30, 2025, from **$(30.7) million** in the prior year, and to **$(92.3) million** for the six months ended June 30, 2025, from **$(36.7) million** in the prior year[13](index=13&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income (Loss) | $(104,370) | $(30,662) | $(92,258) | $(36,696) | | Net Unrealized Gain (Loss) on Marketable Securities, net of tax | $210 | $325 | $822 | $(132) | | Foreign Currency Translation Adjustment | $34 | $(25) | $53 | $(17) | | Total Comprehensive Income (Loss) | $(104,126) | $(30,362) | $(91,383) | $(36,845) | - Total comprehensive loss increased significantly, mirroring the trend in net loss, but was partially offset by net unrealized gains on marketable securities in 2025[14](index=14&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Condensed Consolidated Statements of Stockholders' Equity (Deficit) (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Total Stockholders' Equity (Deficit) | $408,929 | $470,952 | | Accumulated Deficit | $(1,679,235) | $(1,586,977) | | Additional Paid-In Capital | $2,083,234 | $2,053,895 | | Common Stock Shares Outstanding | 414,283 | 412,194 | - Stockholders' equity decreased by **$62.0 million** from December 31, 2024, to June 30, 2025, primarily due to the net loss incurred during the period[10](index=10&type=chunk)[17](index=17&type=chunk) - The accumulated deficit increased by **$92.3 million** for the six months ended June 30, 2025, reflecting the net loss[17](index=17&type=chunk) - Stock-based compensation expense contributed **$32.1 million** to additional paid-in capital for the six months ended June 30, 2025[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net Cash Provided by (Used in) Operating Activities | $(67,072) | $(66,493) | | Net Cash Provided by (Used in) Investing Activities | $47,369 | $69,655 | | Net Cash Provided by (Used in) Financing Activities | $(2,741) | $(1,155) | | Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | $(22,444) | $2,007 | | Cash, Cash Equivalents and Restricted Cash, End of Period | $171,416 | $116,336 | - Net cash used in operating activities remained relatively flat year-over-year, at **$(67.1) million** for the six months ended June 30, 2025[19](index=19&type=chunk) - Net cash provided by investing activities decreased by **$22.3 million**, primarily due to changes in marketable securities investments[19](index=19&type=chunk) - The company experienced a net decrease in cash, cash equivalents, and restricted cash of **$(22.4) million** for the six months ended June 30, 2025, compared to a net increase of **$2.0 million** in the prior year[19](index=19&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [NOTE 1. Business](index=11&type=section&id=NOTE%201.%20Business) - agilon health provides capabilities, capital, and a business model for physician groups to create a Medicare-centric, globally capitated line of business[21](index=21&type=chunk) - As of June 30, 2025, the Company provided care to approximately **497,500 Medicare Advantage members**[21](index=21&type=chunk) - The Company also participates in CMS ACO REACH and MSSP Models through equity method investments[21](index=21&type=chunk) [NOTE 2. Summary of Significant Accounting Policies](index=11&type=section&id=NOTE%202.%20Summary%20of%20Significant%20Accounting%20Policies) - Financial statements are prepared in accordance with U.S. GAAP, consolidating wholly-owned subsidiaries, joint ventures, and controlled VIEs[23](index=23&type=chunk) - Management's estimates for revenue recognition, medical services expense (including IBNR claims), and long-lived asset valuations are significant and may differ materially from actual results[24](index=24&type=chunk) - The Company operates as a single operating and reportable segment, focusing on its Medicare-centric, capitated line of business[30](index=30&type=chunk) - The 'One Big Beautiful Bill Act' signed on July 4, 2025, is being evaluated for its potential

Financial Data and Key Metrics Changes - The company ended 2024 with approximately $440 million in cash, outperforming cash flow projections, and expects to burn about $110 million in 2025 [49] - The company aims to achieve cash flow breakeven by 2027, with several levers to pull, including contracting and cost control [50][52] Business Line Data and Key Metrics Changes - The company operates in two programs: Medicare Advantage (MA) and ACO REACH, with ACO REACH showing about $150 million in savings and a 13% gross savings rate [8] - Quality scores in the Medicare Advantage program are above 4 stars, with year two plus markets running at 4.25 or better, which is a key differentiator [6][7] Market Data and Key Metrics Changes - The company has seen a consistent cost trend of approximately 7% in 2023 and 2024, with a projected 5.3% for 2025 [30][31] - Utilization trends have remained consistent, with inpatient spend being a significant driver, particularly in oncology drugs [55] Company Strategy and Development Direction - The company is focused on transitioning from fee-for-service to value-based care, emphasizing the importance of the primary care physician-patient relationship [4][10] - The company is being measured in its growth strategy, with a reduction in new member classes for 2025 to 20,000, while planning for 30,000 to 45,000 in 2026 [15][70] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging macro environment but notes strong demand from physician groups and payers for the move to value-based care [14][19] - The company is focused on improving performance and reducing volatility, having exited two partnerships last year [41][46] Other Important Information - The company has reduced its Part D exposure from 70% to 30% of its membership for 2025, aiming to further decrease this by 2026 [44] - The company is implementing a new financial data pipeline to enhance revenue and claims information accuracy [34] Q&A Session Summary Question: What are the implications of the current risk adjustment process? - The company emphasizes the importance of the PCP-patient relationship and has a robust risk adjustment process in place, including a 100% chart review process [22][24] Question: How is the company managing utilization trends? - Utilization trends are consistent with expectations, with inpatient spend being a significant driver, particularly in oncology [55] Question: What is the company's strategy for physician partnerships? - The company maintains high net promoter scores from physicians, indicating strong engagement and satisfaction with the value-based care model [59][63]

Summary of Agilon Health (AGL) 2025 Conference Call Company Overview - Agilon Health focuses on transforming primary care by partnering with primary care physicians (PCPs) to manage total cost care and quality for senior populations, moving from fee-for-service to global risk models [2][3] Key Differentiators - Long-term exclusive partnerships with PCPs who have established relationships with their patients, averaging over ten years [2][3] - Transitioning patients and health plans into global risk models to enhance care management [3] Financial Performance and Cost Trends - For Q1, Agilon reported a 5.5% cost trend in year two plus markets, with adjustments indicating a normalized trend closer to 7% [6][7] - The company aims to focus on profitability while intentionally slowing growth, with a smaller member class in 2025 compared to previous years [10][11] Risk Management Strategies - Reduced Part D exposure from approximately 70% to below 30% of membership to mitigate financial risks associated with uncontrollable factors [17][19] - Implemented a no downside care management fee for first-year members to cover costs while transitioning to full risk [11][50] Quality Incentives and Programs - Agilon has seen a significant increase in quality incentives, with $25 million allocated for 2025, focusing on achieving higher star ratings [28][30] - The company is rolling out programs for chronic conditions such as palliative care, heart failure, and COPD, aiming to improve patient outcomes and reduce hospitalizations [33][37] Data and Forecasting Improvements - A new financial data pipeline was launched to enhance visibility into claims and improve forecasting accuracy, with 85% of membership now integrated [42][45] - The company is working to reduce variability in financial performance through better data management [46] ACO REACH Program - ACO REACH has been successful, generating $150 million in gross savings and is expected to expand due to positive outcomes [58][61] - The program is recognized as a model for future Medicare initiatives focusing on evidence-based prevention and alternative payment models [60][61] Long-term Vision - Agilon aims to strengthen its long-term relationships with PCPs, invest in clinical areas, and maintain disciplined growth strategies to adapt to macroeconomic changes [63] Additional Insights - The company is focused on reducing volatility in its operations and enhancing the quality of care provided to patients [21][22] - Agilon's approach emphasizes stability over potential margin expansion, particularly in managing uncontrollable costs [22][23]

Core Insights - Agilon Health (AGL) reported break-even quarterly earnings per share, surprising the market as the Zacks Consensus Estimate anticipated a loss of $0.01, marking a 100% earnings surprise [1] - The company posted revenues of $1.53 billion for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 1.73%, although this represents a decline from year-ago revenues of $1.6 billion [2] - Agilon shares have increased by approximately 116.8% since the beginning of the year, contrasting with a -3.9% decline in the S&P 500 [3] Earnings Outlook - The future performance of Agilon's stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - Current consensus EPS estimate for the upcoming quarter is -$0.05 on revenues of $1.47 billion, and for the current fiscal year, it is -$0.31 on revenues of $5.92 billion [7] Industry Context - The Medical Services industry, to which Agilon belongs, is currently ranked in the top 25% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The correlation between near-term stock movements and earnings estimate revisions suggests that tracking these revisions can provide insights into stock performance [5][6]

Q1 2025 Financial Performance - Medicare Advantage Members reached 491,000[11] - ACO Model Members reached 114,000[11] - Total Members Live on Platform reached 605,000[11] - Total Revenues were $1,533 million[11] - Medical Margin was $128 million[11] - Net Income was $12 million[11] - Adjusted EBITDA was $21 million[11] - Geography Entry Costs were $5 million[11] 2025 Financial Outlook - The company anticipates 2025 cash burn of approximately $110 million[14] - New geography entry cost is expected to be $35-$40 million[10] - Geography Entry Costs are projected to be between $35 million and $40 million[12]

Financial Data and Key Metrics Changes - The company reported total revenue of $1.53 billion for Q1 2025, down from $1.6 billion in Q1 2024, primarily due to market and partnership exits, partially offset by premium growth [21][22] - Medical margin for Q1 2025 was $128 million, compared to $157 million in Q1 2024, reflecting elevated medical costs driven by increased utilization and flu-related expenses [21][22] - Adjusted EBITDA for Q1 2025 was $21 million, down from $29 million in Q1 2024, impacted by ongoing elevated cost trends [23] Business Line Data and Key Metrics Changes - Medicare Advantage membership at the end of Q1 2025 was 491,000, a decrease from 523,000 in Q1 2024, due to a cautious approach to membership growth and partner exits [19][20] - ACO REACH membership for Q1 2025 was 114,000, down from 131,000 in Q1 2024, primarily due to exiting an underperforming partnership [20] Market Data and Key Metrics Changes - The Medicare Advantage market continues to expand, with CMS data showing a year-over-year growth trend of 3.9% [10] - Overall market trends in 2025 remain consistent with the prior year, with a full-year trend expected at 5.3% [9] Company Strategy and Development Direction - The company is focused on disciplined growth, reducing exposure to costs outside of its control, and enhancing clinical and operational capabilities [7][11] - Investments in technology are seen as a key competitive advantage, aimed at improving automation, efficiency, and clinical outcomes [13][14] - The company aims to reduce Part D exposure and improve economic terms for Part C, with a focus on quality incentives [12][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the 2026 environment, citing a favorable final rate notice from CMS and supportive comments from administration officials regarding value-based care [8][17] - The company anticipates clearer signals from Congress regarding Medicare policy as the year progresses [8] - Management remains cautious about ongoing utilization pressures and is taking a conservative approach to assumptions for 2025 [25][66] Other Important Information - The company ended Q1 2025 with $369 million in cash and marketable securities, expecting to use approximately $110 million of cash in 2025 [28] - The company is targeting cash flow breakeven by 2027 while maintaining a disciplined approach to capital allocation [28] Q&A Session Summary Question: Impact of V-28 risk model transition on value-based care companies - Management indicated that the risk adjustment perspective for 2025 is in line with expectations, with a 2% net increase year-over-year, inclusive of a 3% headwind from V-28 [33][34] Question: Contribution from previously exited areas - Management noted that unfavorable development from exited markets would not impact 2025 significantly, with minimal remaining IBNR for those service dates [38][39] Question: Clarity on 2026 MA final rate notice - Management confirmed that 40% of membership was repriced for January 2025, with expected benefits from the average 9% increase across the network [42][43] Question: Expectations for 2026 MA bit cycle - Management expressed optimism about the 2026 environment, with a focus on quality incentives and clinical cost-saving initiatives [60][61] Question: Visibility on completed claims and medical cost trends - Management highlighted improved visibility through a new financial data pipeline, which provides detailed member-level revenue and claims data [67][70] Question: Potential membership reduction into 2026 - Management stated that they do not anticipate a reduction in membership due to ongoing efforts to reduce Part D exposure and improve economic terms [76][77] Question: Impact of Humana's star ratings decline - Management acknowledged the potential headwind from Humana's star ratings but emphasized the company's strong quality performance as a differentiator [96][100] Question: Development of clinical programs - Management confirmed that while 2025 is an investment year for new clinical programs, benefits are expected to materialize in 2026 and beyond [107]