Core Insights - Astrana Health, Inc. (NASDAQ:ASTH) has received mixed opinions from analysts, with a Buy rating from Truist Financial and a lowered price target from TD Cowen [1][2] Financial Performance - For fiscal Q3 2025, Astrana Health reported a revenue growth of 99.71% year-over-year, reaching $956.05 million, which exceeded estimates by $3.22 million [2] - The company's EPS was $0.01, which fell short of the consensus estimate by $0.43 [2] Future Outlook - Management has lowered its full-year revenue guidance to a range of $3.1 billion to $3.18 billion, down from the previous range of $3.1 billion to $3.3 billion [3] - Adjusted EBITDA guidance was also reduced to a range of $200 million to $210 million, from the previous range of $215 million to $225 million [3] - The reduced outlook is attributed to anticipated headwinds in the Medicaid and exchange business [3][4] Analyst Commentary - Analyst Ryan Langston from TD Cowen noted that the cautious outlook reflects concerns regarding Medicaid and the value-based care (VBC) environment [4] - Astrana Health is characterized as a physician-centered, technology-powered healthcare company focused on delivering coordinated, high-quality care [4]

Revenue and Income - Total revenue for the three months ended September 30, 2025, was $956,048,000, a 100.0% increase from $478,710,000 in the same period of 2024[30] - Capitation revenue for the nine months ended September 30, 2025, reached $2,061,451,000, up 66.4% from $1,239,885,000 in 2024[30] - For the three months ended September 30, 2025, net income attributable to Astrana Health, Inc. was $373,000, a decrease of 97.7% compared to $16,094,000 for the same period in 2024[32] - For the nine months ended September 30, 2025, net income was $17,514,000, a decrease of 65.3% compared to $50,100,000 for the same period in 2024[32] - Earnings per share (EPS) – basic for the three months ended September 30, 2025, was $0.01, down from $0.34 in the same period of 2024, reflecting a decline of 97.1%[32] - For the nine months ended September 30, 2025, the basic earnings per share was $0.34, down from $1.05 in 2024, and diluted earnings per share was $0.33 compared to $1.04 in 2024[166] Expenses and Liabilities - Operating income for the three months ended September 30, 2025, was $19,210,000, a decrease of 32.5% compared to $28,425,000 in the same period of 2024[30] - Total liabilities as of September 30, 2025, amounted to $1,682,462,000, representing a 99.9% increase from $840,726,000 as of December 31, 2024[25] - General and administrative expenses for the nine months ended September 30, 2025, were $157,009,000, a 39.6% increase from $112,478,000 in the same period of 2024[30] - Total expenses of $936,838 thousand for the three months ended September 30, 2025, compared to $450,285 thousand in the same period of 2024, an increase of 108%[186] Assets and Cash Flow - Total assets as of September 30, 2025, were $2,237,186,000, an increase of 64.9% from $1,354,894,000 as of December 31, 2024[23] - Cash and cash equivalents increased to $462,227,000 as of September 30, 2025, compared to $288,455,000 as of December 31, 2024, reflecting a growth of 60.2%[23] - Net cash provided by operating activities increased to $117,483,000 from $63,146,000 year-over-year[48] - Cash paid for income taxes decreased significantly to $4,728,000 from $38,270,000 in the previous year[50] Acquisitions and Investments - The company completed the acquisition of certain businesses and assets of Prospect Medical Holdings, Inc., which is expected to enhance future growth opportunities[19] - The Company acquired Prospect Medical Holdings, Inc. for a purchase price of $674.9 million, financed by a $707.3 million loan[87] - The Company recorded acquisition-related costs of $10.3 million and $20.4 million for the three and nine months ended September 30, 2025, respectively[87] - For the period from acquisition dates through September 30, 2025, the total revenue from acquisitions was $308.0 million, and net income was $13.1 million[102] Debt and Financing - Borrowings on long-term debt increased significantly to $1,119,300,000 from $171,875,000 year-over-year[48] - The Company has future debt commitments totaling $1,064,209,000, with the largest portion due in 2029 amounting to $89,746,000[118] - The Company entered into a Second Amended and Restated Credit Agreement on February 26, 2025, which includes a $300 million revolving credit facility and a $250 million term loan[119] - As of September 30, 2025, the Company had outstanding borrowings of $122 million under the Revolver Loan and $942.2 million under Term Loans, with an interest rate of 5.91%[121] Stock and Equity - The company reported a total stockholders' equity of $775,543,000 as of September 30, 2025, an increase of 8.8% from $712,720,000 as of December 31, 2024[27] - The Company repurchased 300,000 shares of its common stock for approximately $10.6 million during the nine months ended September 30, 2025[132] - The Company issued common stock for contingent consideration payment amounting to $2,600,000[50] Tax and Regulatory - The provision for income taxes for the three months ended September 30, 2025, was $4,594,000, a decrease of 41.5% from $7,831,000 in the same period of 2024[32] - The Company's effective income tax rate for the nine months ended September 30, 2025, was 45.4%, up from 30.2% in 2024[158] Other Financial Metrics - Interest expense for the three months ended September 30, 2025, was $(17,718,000), an increase of 99.7% compared to $(8,856,000) for the same period in 2024[32] - The average effective interest rate on the Company's total debt was 6.33% for the nine months ended September 30, 2025, down from 7.08% in the same period of 2024[128] - The Company recognized amortization expense of $14.2 million for the three months ended September 30, 2025, compared to $6.7 million for the same period in 2024[106]

Core Insights - Astrana Health, Inc. reported quarterly earnings of $0.01 per share, significantly missing the Zacks Consensus Estimate of $0.47 per share, representing an earnings surprise of -97.87% [1] - The company posted revenues of $956.05 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 0.61%, and showing a substantial increase from $478.71 million year-over-year [2] - Astrana Health, Inc. has not surpassed consensus EPS estimates over the last four quarters, indicating a trend of underperformance in earnings expectations [2] Financial Performance - The earnings for the previous year were $0.33 per share, highlighting a decline in earnings year-over-year [1] - The company has topped consensus revenue estimates three times in the last four quarters, indicating some strength in revenue generation despite the earnings miss [2] - The current consensus EPS estimate for the upcoming quarter is $0.45 on revenues of $978.65 million, and for the current fiscal year, it is $1.24 on revenues of $3.2 billion [7] Market Position - Astrana Health, Inc. shares have increased by approximately 5.4% since the beginning of the year, underperforming compared to the S&P 500's gain of 15.6% [3] - The Zacks Rank for Astrana Health, Inc. is currently 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] - The Medical - Outpatient and Home Healthcare industry, to which Astrana Health belongs, is currently ranked in the top 19% of over 250 Zacks industries, indicating a favorable industry outlook [8]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $956 million, representing a 100% year-over-year increase and a 46% sequential increase, driven by the integration of Prospect Health and solid organic growth [8][19] - Adjusted EBITDA for the quarter was $68.5 million, up 52% year-over-year and 42% sequentially, indicating strong profitability during rapid growth [8][19] - The company ended the quarter with approximately $462 million in cash and short-term investments, and net debt of approximately $624 million, with a net leverage ratio of about 2.5 times on a pro forma trailing 12-month adjusted EBITDA basis [20] Business Line Data and Key Metrics Changes - The care enablement segment saw significant growth, more than doubling revenue quarter-over-quarter due to the addition of Prospect's provider group clients [19] - Medical cost trends remained stable and in line with expectations across both legacy Astrana and Prospect businesses, with Medicare trending favorably below the 4.5% expectation [9][19] Market Data and Key Metrics Changes - The company reiterated synergy targets of $12 to $15 million from the Prospect acquisition, focusing on aligning provider and patient experiences, standardizing operating systems, and implementing the Astrana technology platform [10][20] - The integration of Prospect is expected to enhance Astrana's scale and capabilities, particularly in Southern California, where the company aims to serve patients and payers with a single integrated delivery model [11][12] Company Strategy and Development Direction - Astrana's strategy is built on four pillars: smart growth, disciplined risk progression, quality and cost excellence, and operating leverage through technology [7] - The company is leveraging AI to improve efficiency and care quality, with initiatives such as predictive models for high-risk patients and AI-driven tools for claims analytics [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of Prospect and its potential to drive stronger performance heading into 2026, despite some anticipated headwinds in Medicaid and exchange businesses [15][16] - The company updated its 2025 revenue guidance to a range of $3.1 to $3.18 billion and adjusted EBITDA to a range of $200 to $210 million, citing timing considerations rather than changes in underlying performance [14][21] Other Important Information - The company is focused on maintaining a disciplined approach to growth, ensuring that full-risk contracts are only entered into when data and infrastructure are in place to manage risk responsibly [14] - Management highlighted the importance of cultural integration post-acquisition to ensure long-term success [10] Q&A Session Summary Question: Revenue guidance update related to full-risk transition timing - Management confirmed the delay was strictly procedural and related to both legacy Astrana and Prospect businesses, with expectations to complete transitions in Q1 2026 [24][26] Question: Details on the Intermountain Health partnership - The partnership aims to enhance care coordination and affordability in Southern Nevada, with potential for future expansion into additional states [30][32] Question: Medicaid cost trends and expectations - Management anticipates Medicaid margins to stabilize by late 2026, with current trends showing improvement [36][38] Question: Margins by segment - The care enablement segment showed strong EBITDA margins due to rapid growth and effective management, while care partners' margins were slightly lower due to higher trends in the legacy Prospect business [42][44] Question: Medical cost trends and expectations for 2026 - The blended weighted average cost trend was just under 4.5%, with expectations for conservative management in light of potential regulatory headwinds [78][80] Question: Full-risk contract transition guidance - Management expects high 70% of revenue to come from full-risk contracts in 2026, with ongoing success in moving contracts to a delegated model [94][96] Question: Organic growth excluding Prospect - The core Astrana business continues to grow in the mid-teens, while Prospect is expected to grow in the mid-to-high single digits [100][102]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $956 million, representing a 100% year-over-year increase and a 46% sequential increase, driven by the integration of Prospect Health and solid organic growth [8][19] - Adjusted EBITDA for the quarter was $68.5 million, up 52% year-over-year and 42% sequentially, indicating strong profitability during rapid growth [8][19] - The company updated its full-year 2025 revenue guidance to a range of $3.1 billion to $3.18 billion and adjusted EBITDA to a range of $200 million to $210 million, reflecting timing considerations rather than changes in underlying performance [14][21] Business Line Data and Key Metrics Changes - The Care Enablement segment saw significant growth, more than doubling revenue quarter-over-quarter due to the addition of new provider group clients from Prospect [19] - Medical cost trends remained stable and in line with expectations across both legacy Astrana and Prospect businesses, with Medicare trending favorably below the 4.5% expectation [9][19] Market Data and Key Metrics Changes - The company reiterated synergy targets of $12 million to $15 million from the Prospect acquisition, focusing on aligning provider and patient experiences, standardizing operating systems, and implementing the Astrana technology platform [10][20] - The integration of Prospect is expected to enhance Astrana's scale and capabilities, particularly in Southern California, strengthening its ability to serve patients and payers [11][13] Company Strategy and Development Direction - Astrana's strategy is built on four pillars: smart growth, disciplined risk progression, quality and cost excellence, and operating leverage through technology [7] - The company is leveraging AI to improve efficiency and care quality, with initiatives such as predictive models for high-risk patients and AI-driven tools for claims analytics [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of Prospect and its potential to drive stronger performance heading into 2026, despite anticipated headwinds in Medicaid and Exchange businesses [15][16] - The company is optimistic about tailwinds from improved Medicare Advantage rates and the realization of synergies from the Prospect acquisition [15][16] Other Important Information - Cash flow from operations for the quarter was approximately $10 million, with a nine-month total of $118 million, and the company expects full-year free cash flow conversion of approximately 40% to 45% of adjusted EBITDA [20] - The company ended the quarter with approximately $462 million in cash and short-term investments and net debt of approximately $624 million, with a net leverage ratio of about 2.5x [20] Q&A Session Summary Question: Revenue guidance update related to full-risk transition timing - Management confirmed the delay was strictly procedural and related to both legacy Astrana and Prospect businesses, with expectations to complete transitions in Q1 2026 [24][25][26] Question: Details on the Intermountain Health partnership - The partnership aims to enhance care coordination and affordability in Southern Nevada, with potential for future expansion into additional states [30][31][32] Question: Medicaid cost trends and expectations - Management anticipates Medicaid margins to stabilize in late 2026, with current trends showing improvement [36][37] Question: Margins by segment - The Care Enablement segment showed strong margins due to rapid growth, while Care Partners' margins were slightly lower due to higher trends in the legacy Prospect business [42][43] Question: Medical cost trends and expectations for 2026 - The blended weighted average cost trend was just under 4.5%, with expectations for conservative management in 2026 due to regulatory headwinds [80][81] Question: Full-risk contract transition guidance - Management expects high 70% of revenue to come from full-risk contracts in 2026, with ongoing success in moving contracts to a delegated model [96][97] Question: Organic growth excluding Prospect - The core Astrana business continues to grow in the mid-teens, while Prospect is expected to grow in the mid-to-high single digits [101][103]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 reached $956 million, representing a 100% increase year-over-year and a 46% increase sequentially, driven by the integration of Prospect Health and solid organic growth [7][18] - Adjusted EBITDA for the quarter was $68.5 million, up 52% year-over-year and 42% sequentially, indicating strong profitability during aggressive scaling [7][18] - The company ended the quarter with approximately $462 million in cash and short-term investments, and net debt of approximately $624 million, resulting in a net leverage ratio of about 2.5 times on a pro forma trailing 12-month adjusted EBITDA basis [20][50] Business Line Data and Key Metrics Changes - The care enablement segment saw significant growth, more than doubling revenue quarter-over-quarter due to the addition of new provider group clients from Prospect [18] - Medical cost trends remained stable and well-controlled across both legacy Astrana and Prospect businesses, with Medicare trending favorably below the 4.5% expectation for the year [8][18] Market Data and Key Metrics Changes - The company reiterated synergy targets of $12 to $15 million from the Prospect acquisition, focusing on aligning provider and patient experiences, standardizing operating systems, and implementing the Astrana technology platform [9][20] - The partnership with Intermountain Health in Nevada enhances Astrana's presence in a fast-growing market, combining clinical infrastructure with value-based care management capabilities [12] Company Strategy and Development Direction - The company’s strategy is built on four pillars: smart growth, disciplined risk progression, quality and cost excellence, and operating leverage through technology [6] - The integration of AI across the enterprise is expected to drive improvements in efficiency and care quality, with predictive models identifying high-risk patients for earlier interventions [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of Prospect and its potential to enhance performance heading into 2026, despite some anticipated headwinds in Medicaid and exchange businesses due to regulatory dynamics [15][16] - The company updated its 2025 revenue guidance to a range of $3.1 to $3.18 billion and adjusted EBITDA to a range of $200 to $210 million, attributing changes to timing rather than underlying performance [14][21] Other Important Information - The company expects to achieve full onboarding of Prospect's physician groups and care teams to the Astrana platform by mid-2026, with cultural integration being a key focus [9][10] - Cash flow from operations for the quarter was approximately $10 million, contributing to a nine-month total of $118 million, with expectations of full-year free cash flow conversion of approximately 40 to 45% of adjusted EBITDA [20] Q&A Session Summary Question: Revenue guidance update related to full-risk transition timing - Management clarified that the delay was strictly a timing issue related to both legacy Astrana and Prospect businesses, ensuring contract standardization across both [22][23] Question: Details on the Intermountain Health partnership - The partnership aims to enhance care coordination and affordability for patients in Southern Nevada, with potential for future expansion into additional states [24] Question: Medicaid cost trends and expectations - Management anticipates Medicaid margins to stabilize by late 2026, with current trends showing improvement [25][26] Question: Margins by segment - The care enablement segment showed high margins due to rapid growth and effective management, while care partners' margins were slightly lower due to higher trends in the legacy Prospect business [27][28] Question: Medical cost trends and expectations for 2026 - The blended weighted average cost trend was just under 4.5%, with expectations for conservative management in light of potential regulatory headwinds [41][42]

Core Insights - Astrana Health reported a remarkable year-on-year revenue growth of 99.7%, reaching $956 million, which exceeded Wall Street's estimates by 0.6% [1][5] - The company has shown strong annualized revenue growth of 47.7% over the last two years, indicating a recent acceleration in demand [1] - Astrana Health's sales have grown at a compounded annual growth rate of 33.3% over the last five years, outperforming the average healthcare company [2] Financial Performance - The company's free cash flow margin decreased to 0.8% from 6.6% in the same quarter last year, and the operating margin fell to 2% from 5.9% [4] - Astrana Health's full-year revenue guidance was lowered to $3.14 billion, which is 1.9% below previous estimates [4] - The GAAP profit for the company was reported at $0.01 per share, significantly below analysts' consensus estimates by 97.6% [5] Profitability Trends - Astrana Health's operating margin has decreased by 14 percentage points over the last five years, indicating rising expenses that could not be passed onto customers [8] - The operating margin for Q3 was 2%, down 3.9 percentage points year on year, reflecting less efficiency due to faster-growing expenses compared to revenue [9] - Earnings per share (EPS) declined by 27.1% annually over the last five years, despite revenue growth, suggesting reduced profitability on a per-share basis [10] Market Expectations - Analysts project a revenue growth of 37.2% over the next 12 months, indicating a slowdown compared to the previous two years but still reflecting confidence in the company's products and services [6] - Wall Street expects Astrana Health's full-year EPS to grow 877% over the next 12 months, despite the current low EPS of $0.01 [12]

Third Quarter 2025 Earnings Supplement November 2025 Forward Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements include any statements about the Company's business, financial condition, operating results, plans, objectives, expectations and intentions, expansion plans, estimates of our total addressable market, our ...

Financial Performance - Total revenue for Q3 2025 reached $956.0 million, a 100% increase from $478.7 million in Q3 2024[7] - Adjusted EBITDA for Q3 2025 was $68.5 million, up 52% from $45.2 million in Q3 2024[8] - Care Partners revenue was $897.7 million, reflecting a 97% increase from $455.8 million in the prior year[8] - Net income attributable to Astrana for Q3 2025 was $0.4 million, with diluted earnings per share of $0.01[8] - Total revenue for the three months ended September 30, 2025, was $956,048 thousand, representing a 100.0% increase from $478,710 thousand in the same period of 2024[26] - Net income for the nine months ended September 30, 2025, was $17,514 thousand, a decrease of 69.7% compared to $57,709 thousand for the same period in 2024[28] - Adjusted EBITDA for the nine months ended September 30, 2025, was $152,970 thousand, an increase of 12.9% from $135,332 thousand in the same period of 2024[31] - Earnings per share (diluted) for the three months ended September 30, 2025, was $0.01, a decrease from $0.33 in the same period of 2024[26] Guidance and Projections - The company updated its full-year 2025 guidance, projecting total revenue between $3,100 million and $3,180 million[13] - Net income guidance for the year ending December 31, 2025, is projected to be between $23,500,000 and $28,500,000[35] - EBITDA guidance for the same period is estimated to range from $124,000,000 to $134,000,000[35] - Adjusted EBITDA is expected to be between $200,000,000 and $210,000,000, providing a key performance measure for the company[35] Assets and Liabilities - Total assets as of September 30, 2025, were $2,237.2 million, compared to $1,354.9 million at the end of 2024[23] - Total stockholders' equity as of September 30, 2025, was $775,543 thousand, up from $712,720 thousand as of December 31, 2024, reflecting a growth of 8.8%[24] - Total liabilities, mezzanine deficit, and stockholders' equity amounted to $2,237,186 thousand as of September 30, 2025, compared to $1,354,894 thousand as of December 31, 2024[24] - The company reported a total of $1,302.4 million in assets that can only be used to settle obligations of its consolidated VIEs as of September 30, 2025[24] Cash Flow and Expenses - Cash flows from operating activities for the nine months ended September 30, 2025, were $117,483 thousand, compared to $63,146 thousand for the same period in 2024, indicating a significant increase[28] - The company incurred $548,553 thousand in payments for business acquisitions during the nine months ended September 30, 2025, compared to $115,494 thousand in the same period of 2024[28] - The company had a net cash increase of $175,224 thousand for the nine months ended September 30, 2025, compared to $54,488 thousand for the same period in 2024[28] Non-GAAP Measures - The company defines Adjusted EBITDA margin as Adjusted EBITDA over total revenue, emphasizing its importance in evaluating operational performance[36] - Non-GAAP measures like Adjusted EBITDA are used to assess the company's ongoing operating performance without the impact of non-recurring financial information[37] - The company believes that presenting non-GAAP financial measures provides investors with relevant information for evaluating business performance[37] - The reconciliation of GAAP and non-GAAP measures is provided to enhance understanding of the company's financial performance[37] Strategic Initiatives - The acquisition of Prospect Health was completed on July 1, 2025, enhancing the company's operational scale and capabilities[9] - A strategic partnership with Intermountain Health was announced to improve healthcare access in southern Nevada[14] - The company continues to control medical costs effectively, reiterating full-year trend expectations[7] Depreciation and Expenses - Interest expense is projected to be between $37,000,000 and $38,000,000, while provision for income taxes is expected to range from $18,000,000 to $22,000,000[35] - Depreciation and amortization is consistently estimated at $45,500,000 for the guidance period[35] - Stock-based compensation is projected to be $36,000,000, which is included in the Adjusted EBITDA calculation[35]

Core Insights - Astrana Health, Inc. reported strong third-quarter results for 2025, with significant revenue growth and successful integration of Prospect Health [2][9][10] - The company is focused on enhancing its care delivery platform and maintaining strong clinical and cost performance despite some delays in full-risk contract transitions [2][9] Financial Highlights for Q3 2025 - Total revenue reached $956.0 million, a 100% increase from $478.7 million in Q3 2024 [9][10] - Adjusted EBITDA was $68.5 million, up 52% from $45.2 million in the same quarter last year [10][22] - Net income attributable to Astrana was $0.4 million, with diluted earnings per share of $0.01 [10][20] Financial Highlights for Nine Months Ended September 30, 2025 - Total revenue for the nine months was $2,231.2 million, a 63% increase from $1,369.3 million [10][19] - Adjusted EBITDA for the nine months was $153.0 million, up 13% from $135.3 million [10][22] - Net income attributable to Astrana for the nine months was $16.5 million, with diluted earnings per share of $0.33 [10][20] Recent Operating Highlights - Care Partners revenue was $897.7 million, a 97% increase from $455.8 million in Q3 2024 [10][19] - The company successfully closed the acquisition of Prospect Health, which exceeded performance expectations [9][10] - Astrana announced a strategic partnership with Intermountain Health to enhance care access and improve patient outcomes in southern Nevada [10][19] Guidance for 2025 - Updated guidance for total revenue is projected between $3.1 billion and $3.18 billion, with Adjusted EBITDA expected between $200 million and $210 million [11][29] - The guidance reflects adjustments for full-risk contract delays unrelated to core performance [9][11] Cash Flow and Balance Sheet Highlights - Cash and cash equivalents as of September 30, 2025, were $462.2 million, up from $288.5 million at the end of 2024 [17][21] - Total assets increased to $2,237.2 million from $1,354.9 million at the end of 2024 [17][18] - Total liabilities rose to $1,682.5 million from $840.7 million at the end of 2024 [17][18]