Financial Data and Key Metrics Changes - For Q1 2025, total revenue was $1.53 billion, down from $1.6 billion in Q1 2024, primarily due to market and partnership exits, partially offset by premium growth [21] - Membership at the end of Q1 2025 was 491,000, a decrease from 523,000 in Q1 2024, reflecting a cautious approach to growth and partner exits [19] - Medical margin for Q1 2025 was $128 million, down from $157 million in Q1 2024, driven by elevated utilization and costs [21][22] - Adjusted EBITDA for Q1 2025 was $21 million, compared to $29 million in Q1 2024, reflecting ongoing elevated cost trends [23] Business Line Data and Key Metrics Changes - ACO REACH membership decreased to 114,000 in Q1 2025 from 131,000 in Q1 2024, primarily due to exiting an underperforming partnership [20] - Medical costs for Q1 2025 were in line with expectations, driven by elevated utilization and flu-related costs [22] - The medical cost trend for year two plus markets was 5.5% in Q1 2025, down from 6.7% in Q1 2024 [24] 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 an expected full-year trend of 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 [6][12] - Investments in technology and clinical programs are expected to drive competitive advantages and improve quality outcomes [13][14] - The company anticipates a more favorable environment in 2026, supported by improved payer bids and final rate notices from CMS [11][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the final rate notice from CMS for 2026, which is expected to address high cost and utilization trends [6][18] - The company is taking a cautious approach to membership growth, with expectations for retroactive membership assignments in Q2 [5][19] - Management highlighted the importance of early identification and management of chronic diseases as a key focus of their model [7][10] 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 [27] - The company is maintaining a disciplined approach to capital allocation to support business objectives while aiming for cash flow breakeven in 2027 [27] 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, despite 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 [37][38] Question: 2026 MA final rate notice and its flow-through - Management confirmed that 40% of membership was repriced for January 2025, with expected benefits from the average 9% increase across the network [41][42] Question: Risk scores and patient movement - Management clarified that the 2% increase in risk adjustment is on a same member basis, with some movement between payers noted but not significantly affecting care models [49][52] 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 tracking well [58][61] Question: Medical cost trends and visibility on completed claims - Management stated that medical cost trends were in line with expectations, with improved visibility from the new financial data pipeline [65][66] Question: Potential membership reduction due to Part D - Management indicated that they are making progress in reducing Part D exposure and do not anticipate a reduction in membership for 2026 [75][76] Question: Clinical programs and their impact - Management confirmed that while 2025 is an investment year for new clinical programs, benefits are expected to materialize in 2026 and beyond [104][106]

Financial Performance - Total revenue for the first quarter of 2025 was $1.5 billion, a decrease of 4% from $1.6 billion in the first quarter of 2024[90]. - Gross profit fell to $51 million in the first quarter of 2025, down 32% from $75 million in the first quarter of 2024[90]. - Medical margin decreased by 19% to $128 million compared to $157 million in the first quarter of 2024[90]. - Net income for the first quarter of 2025 was $12 million, a significant improvement from a net loss of $6 million in the first quarter of 2024, representing a 301% increase[90]. - Adjusted EBITDA for the first quarter of 2025 was $21 million, down 29% from $29 million in the first quarter of 2024[90]. - Medical services revenue for Q1 2025 was $1,529,879, a decrease of $71,316 or 4% from $1,601,195 in Q1 2024, primarily due to a 6% decline in average membership[115]. - Medical services expense decreased to $1,401,867 in Q1 2025, down $41,975 or 3% from $1,443,842 in Q1 2024, reflecting the same decline in average membership[118]. - Other medical expenses decreased by $5,231 or 6% to $80,193 in Q1 2025 compared to $85,424 in Q1 2024, with partner physician incentive expense dropping to $44.0 million from $49.8 million[119]. - General and administrative expenses fell by $10,466 or 14% to $65,956 in Q1 2025 from $76,422 in Q1 2024, with costs related to geography entry decreasing significantly[120]. - Adjusted EBITDA for Q1 2025 was $20.6 million, compared to $29.1 million in Q1 2024, reflecting a decrease of 29%[132]. - Gross profit for Q1 2025 was $50.7 million, down from $75.1 million in Q1 2024, representing a decline of 32.5%[130]. - Medical margin for Q1 2025 was $128.0 million, compared to $157.4 million in Q1 2024, indicating a decrease of 18.6%[130]. Membership and Services - Medicare Advantage members decreased by 6% to approximately 490,700 as of March 31, 2025, compared to 522,800 in the same period of 2024[90]. - Medical services expense as a percentage of total revenues increased to 91% in Q1 2025 from 90% in Q1 2024[116]. - General and administrative expenses represented 4% of total revenues in Q1 2025, down from 5% in Q1 2024[116]. Cash Flow and Investments - Net cash used in operating activities was $32.0 million for Q1 2025, an improvement from $47.8 million in Q1 2024, showing a reduction of $15.8 million[143]. - Cash and cash equivalents as of March 31, 2025, totaled $138.6 million, with investments in marketable securities amounting to $230.1 million[134]. - The company expects to continue incurring operating losses and generating negative cash flows due to ongoing investments in business expansion[135]. - Net cash used in investing activities was $23.1 million for Q1 2025, compared to net cash provided of $51.4 million in Q1 2024, a change of $74.5 million[144]. - As of March 31, 2025, the company held cash, cash equivalents, restricted cash and equivalents, and marketable securities totaling $368.8 million, compared to $405.6 million as of December 31, 2024[155]. Strategic Focus - The company aims to empower primary care physicians through a risk-bearing entity model to manage total healthcare needs[84]. - The company is focused on expanding its network of physician partners and enhancing its platform capabilities to drive growth[85]. - The company anticipates challenges in maintaining and securing contracts with Medicare Advantage payors on favorable terms[81]. - The company expects medical margin to increase in absolute dollars as the platform matures, despite potential fluctuations in PMPM due to new member additions[125]. Other Financial Metrics - Income from equity method investments increased by $6,988 or 123% to $12,672 in Q1 2025, driven by higher medical margins from CMS ACO Models investments[121]. - Other income (expense), net rose by $3,369 or 57% to $9,261 in Q1 2025, primarily due to $4.2 million of income related to services rendered to CMS ACO Models[122]. - Total discontinued operations reported a gain of $14,000 in Q1 2025, a significant improvement of $23,281 or 251% compared to a loss of $9,281 in Q1 2024[123]. - The Credit Facility includes a $100.0 million senior secured term loan and a $100.0 million senior secured revolving credit facility, maturing on February 18, 2026[146]. - A hypothetical 100 basis point change in interest rates would not have a material impact on the company's interest expense[154]. - A hypothetical 100 basis point change in interest rates would not have a material impact on the fair value of the company's marketable securities[155].

Financial Performance - Total revenues for Q1 2025 were $1.53 billion, a decrease of 4% compared to $1.60 billion in Q1 2024[5] - Gross profit for Q1 2025 was $51 million, a 32% decrease from $75 million in Q1 2024[6] - Net income for Q1 2025 was $12 million, compared to a net loss of $6 million in Q1 2024[6] - Adjusted EBITDA for Q1 2025 was $21 million, a decrease of 29% from $29 million in Q1 2024[6] - Total revenues for Q1 2025 were $1,532,782, a decrease of 4.5% from $1,604,354 in Q1 2024[20] - Medical services revenue was $1,529,879, down from $1,601,195, reflecting a decline of 4.4% year-over-year[20] - Gross profit for Q1 2025 was $50,722, a decrease of 32.5% compared to $75,088 in Q1 2024[24] - Net income for Q1 2025 was $12,112, compared to a net loss of $6,034 in Q1 2024[20] - Adjusted EBITDA for Q1 2025 was $20,567, down from $29,054 in Q1 2024, representing a decline of 29.2%[30] Membership and Membership Trends - Medicare Advantage membership stood at 491,000, down 6% from 523,000 in the previous year[6] - Total members on the agilon platform decreased to 605,000, reflecting a 7% decline year-over-year[6] Guidance and Projections - The company reaffirmed its full-year 2025 earnings guidance, projecting total revenues between $5.85 billion and $6.025 billion[9] - For Q2 2025, total revenue guidance is set between $1.435 billion and $1.505 billion[9] Balance Sheet and Assets - The balance sheet as of March 31, 2025, included cash and marketable securities of $369 million and total debt of $35 million[8] - Total current assets increased to $1,650,722 in Q1 2025 from $1,457,774 in Q4 2024, marking an increase of 13.3%[18] - Total liabilities rose to $1,432,607 in Q1 2025 from $1,263,031 in Q4 2024, an increase of 13.4%[18] - Cash and cash equivalents at the end of Q1 2025 were $138,623, down from $188,231 at the end of Q4 2024, a decrease of 26.4%[18] Medical Margin and Expenses - Medical margin was $128 million, down 19% from $157 million in the same quarter last year[6] - Medical margin for Q1 2025 was $128,012, down from $157,353 in Q1 2024, a decline of 18.6%[29] - General and administrative expenses decreased to $65,956 in Q1 2025 from $76,422 in Q1 2024, a reduction of 13.6%[25] Definitions and Comparisons - Adjusted EBITDA is defined as net income adjusted to exclude various items, including interest expense and stock-based compensation[37] - Medical Margin is the most directly comparable GAAP measure to Gross Profit, while Adjusted EBITDA relates to Net Income[38] - Medical Margin and Adjusted EBITDA are used to identify underlying trends and evaluate operating performance over multiple periods[39]

Group 1 - Adma Biologics (ADMA) has shown a year-to-date return of 38.8%, significantly outperforming the average return of -1.2% for the Medical sector [4] - The Zacks Consensus Estimate for ADMA's full-year earnings has increased by 3.7% over the past three months, indicating improved analyst sentiment and earnings outlook [4] - Adma Biologics is ranked 2 (Buy) in the Zacks Rank system, which highlights stocks with characteristics likely to outperform the market in the near term [3] Group 2 - Adma Biologics is part of the Medical - Biomedical and Genetics industry, which has an average return of -1.8% this year, further showcasing ADMA's strong performance relative to its peers [6] - Another notable stock in the Medical sector is Agilon Health (AGL), which has returned 124.2% year-to-date and also holds a Zacks Rank of 2 (Buy) [5] - The Medical Services industry, to which Agilon Health belongs, has a current ranking of 68 and has experienced a return of -0.8% this year [6]

Core Viewpoint - Agilon Health (NYSE: AGL) is experiencing significant growth, with its shares up over 30% in 2025, despite the overall bear market trends [2]. Company Overview - Agilon Health provides primary care physician (PCP) services primarily to Medicare Advantage health insurance plans [2]. - The company is positioned well in the healthcare sector, particularly in the Medicare Advantage market, which is expected to grow [2]. Market Context - The broader market is currently facing turbulent bear market trends, yet Agilon Health is managing to thrive [2]. - The performance of Agilon Health's shares indicates a strong investor interest and confidence in the company's business model and market strategy [2].

Core Viewpoint - Agilon Health's stock price surged 26.1% to close at $5.36, driven by positive sentiment following a recent upgrade from Bernstein and solid trading volume [1][2]. Company Summary - Agilon Health is expected to report break-even quarterly earnings per share, reflecting a year-over-year change of -100%, with projected revenues of $1.51 billion, down 6.2% from the previous year [3]. - The consensus EPS estimate for Agilon has been revised 10% higher in the last 30 days, indicating a positive trend that may lead to further price appreciation [4]. Industry Context - Agilon Health operates within the Zacks Medical Services industry, which includes other companies like LifeMD, Inc. LifeMD's stock closed 2.5% lower at $4.82, with a 15.8% return over the past month [4]. - LifeMD's consensus EPS estimate remains unchanged at -$0.04, representing a 79% improvement from the previous year [5].

Company Overview - Agilon Health (AGL) is currently outperforming its peers in the Medical sector, with a year-to-date return of 131.6% compared to the sector average of 4.9% [4] - The Zacks Rank for Agilon Health is 2 (Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings outlooks [3] Earnings Performance - The Zacks Consensus Estimate for Agilon Health's full-year earnings has increased by 21.3% over the past quarter, reflecting improved analyst sentiment [4] - In comparison, another Medical stock, Paragon 28, Inc. (FNA), has returned 26.1% year-to-date, with a consensus EPS estimate increase of 3.1% over the past three months [5] Industry Context - Agilon Health is part of the Medical Services industry, which consists of 59 stocks and is currently ranked 63 in the Zacks Industry Rank, with an average gain of 5.6% year-to-date [6] - In contrast, Paragon 28, Inc. belongs to the Medical - Instruments industry, which has 84 stocks and is ranked 81, showing a decline of 3.1% year-to-date [6] Investment Outlook - Investors interested in Medical stocks should monitor Agilon Health and Paragon 28, Inc. for their continued strong performance [7]

Core Insights - J.P. Morgan analyst Lisa C. Gill has updated estimates for Agilon Health, Inc. following the fourth-quarter results, indicating a Neutral rating for the stock [1] Financial Performance - Agilon Health reported a fourth-quarter 2024 adjusted EPS of $(0.26), which missed the consensus estimate of $(0.23) [1] - The company's sales for the quarter were $1.52 billion, aligning with expectations [1] Future Outlook - For FY25, the revenue estimate has been revised to $5.926 billion, slightly below the consensus of $5.928 billion, down from an earlier estimate of $6.453 billion [3] - The adjusted EBITDA loss estimate for FY25 remains unchanged at $77 million, compared to a consensus loss of $78 million [3] - For FY26, the revenue estimate has been updated to $6.594 billion, below the consensus mean of $6.665 billion, down from a prior estimate of $7.319 billion [3] - The adjusted EBITDA loss estimate for FY26 has changed to $23 million, compared to a consensus loss of $22 million, revised from a previous loss estimate of $10 million [3] Strategic Positioning - The company is expected to navigate a year of transition in 2025, addressing specific challenges while positioning itself to achieve targets for 2026/2027 [2] Investment Opportunities - Investors can gain exposure to Agilon Health through Fidelity Disruptive Medicine ETF FMED and SPDR S&P Health Care Services ETF XHS [4] - As of the last check, AGL shares are down 0.48% at $4.18 [4]

Company Overview - Agilon Health (AGL) is a stock in the Medical sector, which includes 1012 individual stocks and currently holds a Zacks Sector Rank of 4 [2] - The Zacks Rank system emphasizes earnings estimates and revisions, with Agilon Health currently holding a Zacks Rank of 2 (Buy) [3] Performance Metrics - Agilon Health has returned approximately 56.8% since the beginning of the calendar year, significantly outperforming the Medical sector average return of about 6.7% [4] - The consensus estimate for Agilon Health's full-year earnings has increased by 14.5% over the past quarter, indicating improved analyst sentiment [3] Industry Comparison - Agilon Health is part of the Medical Services industry, which consists of 59 individual stocks and currently ranks 84 in the Zacks Industry Rank, with an average gain of 2.5% year to date [5] - In contrast, Akero Therapeutics, Inc. (AKRO), another outperforming Medical stock, belongs to the Medical - Biomedical and Genetics industry, which has 510 stocks and is currently ranked 71, with a year-to-date gain of 5.7% [6]

Financial Data and Key Metrics Changes - For Q4 2024, Medicare Advantage (MA) membership increased by 36% year-over-year to 527,000 members, driven by the expansion of the '24 partner class and 4.1% same geography growth [10][30] - Total revenue grew by 44% to $1.52 billion for the quarter and $6.06 billion for the year, primarily driven by the class of '24 and organic growth in existing classes [11][31] - Adjusted EBITDA was negative $84 million for the quarter and negative $154 million for the year, reflecting elevated medical cost trends and unfavorable prior year development [12][37] Business Line Data and Key Metrics Changes - ACO model membership reached 132,000 members, representing a 48% year-over-year growth [30] - Medical margin for Q4 2024 was $1 million, compared to a negative margin of $102 million in Q4 2023, while the full year 2024 medical margin was $205 million compared to $299 million in 2023 [34] - Medical expenses for Q4 2024 increased by 31% to $1.52 billion, driven by the expansion of the 2024 class and elevated cost trends [32] Market Data and Key Metrics Changes - The company anticipates a full-year MA membership decline of approximately 4% or 22,000 members for 2025, projecting a range of 490,000 to 520,000 members [14] - Revenue for 2025 is forecasted to decline by 2% to $5.925 billion, driven by the anticipated membership decline [15] Company Strategy and Development Direction - The company aims to be cash flow breakeven by 2027, focusing on reducing underwriting exposure to costs outside its control and pursuing profitable growth [7][8] - Strategic decisions include constraining 2025 MA membership to balance near-term risks and opportunities, while enhancing clinical and operational capabilities [13][21] - The company is investing in clinical programs to improve quality outcomes and reduce medical costs, leveraging technology and data analytics [22][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging macro environment for 2025 but expresses optimism for a more favorable overall environment in 2026 and beyond [9][24] - The recent favorable trends in payor bids and the 2026 advanced notice from CMS are seen as positive signals for future performance [25][28] Other Important Information - The company has exited two unprofitable partnerships and improved back-end processes to enhance visibility and reduce volatility around risk adjustment and medical costs [27] - Cash and marketable securities at the end of Q4 2024 were $406 million, with an expected cash use of approximately $110 million for 2025 [39][50] Q&A Session Summary Question: Changes to Part D and its impact on P&L - Management explained that they have reduced Part D risk to less than 30% of membership, which reflects a successful strategy to manage costs [56][57] - Part D continues to be a loss, and the company has doubled the PMPM loss for 2025 based on anticipated increases from the Inflation Reduction Act [59][60] Question: Year 1 performance expectations - The class of '24 performed strongly, while the class of '25 is smaller with a focus on measured growth and a care management fee structure [63][64] Question: Medical cost trend guidance - Management confirmed that the 50 basis point estimate for the 2 Midnight rule is incorporated into the 2025 guidance, and supplemental benefits are expected to decrease due to payor adjustments [72][73] Question: ACO REACH impact - The company is exiting an underperforming MSSP contract, which had a significant negative impact on profitability [79] Question: Working capital improvements - Management highlighted disciplined cash management and successful partnership exits as key factors improving cash flow [85][88] Question: Visibility on initiatives to improve medical margin - Management expressed confidence in initiatives aimed at improving quality performance and clinical management, which are expected to offset revenue and cost challenges [92][96] Question: 2026 MA advance notice - Management is encouraged by the advance notice but emphasizes the need for rates to catch up with increased costs in Medicare Advantage [101][102]