Core Viewpoint - Astrana Health, Inc. has successfully completed the acquisition of Prospect Health for $708 million, aiming to enhance its capabilities in delivering high-quality, patient-centered care across the United States [1][3]. Company Overview - Astrana Health is a physician-centric, technology-enabled healthcare company focused on providing accessible, high-quality care [1][7]. - The company supports over 20,000 providers and 1.6 million patients through value-based care arrangements [8]. Acquisition Details - The acquisition of Prospect Health, initially announced at $745 million, was finalized at a reduced price of $708 million, reflecting the company's disciplined capital deployment strategy [3]. - Prospect Health operates a network of over 11,000 providers and serves approximately 600,000 members across various healthcare programs [2]. Financial Impact - Astrana expects Prospect Health to contribute approximately $1.2 billion in total revenue and $81 million in adjusted EBITDA on a full-year basis [4]. - The company has updated its full-year 2025 revenue guidance to between $3.1 billion and $3.3 billion, with adjusted EBITDA projected between $215 million and $225 million [5]. Debt and Financial Management - Following the acquisition, Astrana will have approximately $700 million of net debt and aims to reduce its net leverage ratio to below 2.5x within the next 12 to 18 months [6].

Company Overview - Astrana Health is a healthcare platform focused on accessible, high-quality, high-value care through a provider-centric, technology-driven approach[7] - The company has a significant scale with 12,000+ providers and 1.1 million members in value-based care arrangements[9] - Astrana Health operates across 16 markets with 20+ payer partners[9] Financial Performance - Astrana Health's FY 2024 Adjusted EBITDA was $170.4 million[10] - The company's FY 2024 revenue was $2.03 billion[10] - The company projects revenue between $2.5 billion and $2.7 billion for FY 2025[31] - The company projects Adjusted EBITDA between $170 million and $190 million for FY 2025[31] Growth and Strategy - Astrana Health's revenue has grown at a Compound Annual Growth Rate (CAGR) of approximately 29%[25] - Adjusted EBITDA has grown at a CAGR of approximately 22%[27] - 38% of Astrana Health's members are in full-risk arrangements[35] - The company's playbook includes growth, risk progression, outcomes and cost management, and operating leverage[35]

Summary of Astrana Health (ASTH) FY Conference Call Company Overview - **Company**: Astrana Health (ASTH) - **Industry**: Healthcare Services and Health Care Information Technology (HCIT) - **CEO**: Brandon Sim - **Conference Date**: June 04, 2025 Key Points and Arguments Business Model and Market Position - Astrana Health operates a unique model aimed at improving healthcare delivery by centralizing physician networks and reducing inefficiencies caused by multiple insurance companies managing their own networks [9][12][18] - The company has been growing rapidly, achieving over 50% year-over-year growth in Q1 of 2025, and has maintained profitability while others in the industry face challenges [10][21][44] - Astrana's model allows it to serve as a single payer for patients, which enhances long-term patient care investments and reduces administrative burdens [40][54] Financial Performance - Astrana Health has achieved a revenue compound annual growth rate (CAGR) of nearly 29% and an EBITDA CAGR of 22% over the past six years [21][22] - The company serves over 1.1 million patients and has contracts with over 12,000 physicians [21] - LTM (Last Twelve Months) revenue is over $2 billion, with LTM EBITDA exceeding $170 million [22] Growth Strategies - **Organic Growth**: Expansion in California and entry into new states like Nevada and Texas, with Nevada already profitable and Texas nearing breakeven [25][27] - **Inorganic Growth**: Strategic acquisitions of risk-bearing provider businesses, such as Community Family Care and the planned acquisition of Prospect Health for $745 million, which serves over 600,000 members [30][32] Revenue Generation - Revenue is generated from payer partners, with a focus on increasing revenue per member by transitioning members into full-risk arrangements, which can increase revenue from approximately $400 to $850-$900 per member per month [34][36][38] - The percentage of full-risk members has increased from 4% to 38%, driving 75% of revenue in Q1 2025 [37] Cost Management - Astrana Health aims to minimize cost of goods sold (COGS) and general and administrative (G&A) expenses through operational efficiencies and proprietary technology [39][46] - The company has successfully reduced medical trend costs to just over 5%, compared to the national average of close to 10% [43] Industry Challenges and Outlook - The healthcare industry faces challenges such as increased utilization and regulatory changes, but Astrana Health believes its model positions it well to navigate these headwinds [51][52] - The company anticipates continued growth due to its proactive approach in capital deployment and risk management, especially in light of favorable Medicare Advantage rate notices for 2026 [55][56] Additional Important Insights - Astrana Health's technology platform automates prior authorizations and claims processing, leading to faster payments and reduced fraud [47][48] - The company emphasizes the importance of long-term patient relationships, which enhances its ability to invest in preventive care [41][42] - Astrana Health's approach contrasts with traditional insurance models, which often lead to fragmented care and inefficiencies [9][54] This summary encapsulates the key insights from the Astrana Health FY Conference Call, highlighting the company's innovative approach, financial performance, growth strategies, and outlook in the healthcare industry.

Core Insights - Astrana Health, Inc. has announced key additions to its senior leadership team to enhance its AI-enabled, value-based care platform and drive growth across its national footprint [1][4] Leadership Appointments - Sherry McBride has been appointed as Chief Operating Officer, effective June 2, 2025, to lead operational integration and execution [2] - McBride brings over 18 years of experience in value-based healthcare operations, previously serving as COO of Providence Health Network and Prospect Medical Systems [3] - Other strategic leadership additions include Georgie Sam as Chief Data and Analytics Officer, Glenn Sobotka as Chief Accounting Officer, and the promotion of Rita Pew to Chief People Officer [5] Strategic Goals - The new leadership team aims to enhance capabilities across operations, data, finance, and talent, positioning the company for greater speed and impact [6] - Astrana Health is accountable for more than 1.7 million patients nationwide, and the leadership team is crucial for unlocking the full value of its platform to improve patient outcomes [6] Company Overview - Astrana Health is a physician-centric, AI-powered healthcare company focused on delivering high-quality, patient-centered care through scalable infrastructure and technology [6] - The company currently supports over 12,000 providers and more than one million patients in value-based care arrangements [7]

Summary of Astrana Health (ASTH) Conference Call Company Overview - **Company**: Astrana Health - **Industry**: Healthcare Delivery - **Business Model**: Partners with physicians to create managed healthcare networks, focusing on value-based arrangements with payers [4][6] Key Business Metrics - **Physician Partnerships**: Over 12,000 physicians [4] - **Patient Base**: Approximately 1,100,000 patients in value-based arrangements [5] - **Revenue Growth**: Reported a 53% year-over-year revenue growth in Q1 [7] - **Profitability**: Continues to grow profitability and generate cash [7] Recent Acquisition - **Acquisition of Prospect Health**: - **Transaction Value**: $745 million [8] - **Network Size**: 14,000 physicians serving around 600,000 patients [10] - **Geographic Focus**: Primarily Southern California [10] - **Financials**: Prospect generated $94 million in adjusted EBITDA and $1.2 billion in revenue in 2024 [13] - **Synergies Expected**: $12 to $15 million in cost-related synergies within the first 12 to 24 months [14] Integration and Risks - **Integration Experience**: Previous successful acquisitions have built operational capabilities for seamless integration [19] - **Potential Risks**: Concerns about provider network retention during integration; however, positive reception from physicians has been noted [22][24] - **Operational Risks**: Minimal due to similarities in operational models and existing technology platforms [21] Medicare and Market Trends - **Medicare Advantage**: Represents about 60% of Astrana's business; company is not seeing the same negative trends reported by competitors [39][40] - **Risk Adjustment**: Astrana's risk scores are stable and have improved, positioning the company favorably against upcoming reforms [41][42] - **Market Outlook**: Anticipates a material tailwind from Medicare Advantage rate adjustments [50] Medicaid Insights - **Revenue Impact**: Approximately $2.6 billion in revenue, with 28% from Medicaid; potential for a 20-30% reduction in Medicaid members due to stricter eligibility checks [57][58] - **Profitability**: Medicaid is the lowest margin business but still profitable [57] Commercial Business - **Growth Strategy**: Focus on partnerships with Anthem Blue Cross to build co-branded clinics [67] - **Risk Management**: Historically avoided full risk in commercial due to scale concerns, but may explore this in the future [68] Future Guidance - **2027 EBITDA Target**: $350 million, with conservative growth assumptions [69] - **Confidence in Projections**: Strong belief in achieving guidance based on current operational strategies and market conditions [72] Conclusion - **Long-term Vision**: Astrana aims to demonstrate the viability of running a profitable value-based care company while expanding its footprint in California and beyond [73][75] - **Market Position**: Positioned as a leading player in the healthcare delivery space with a focus on quality and cost-effective care [75]

Part I [Financial Information](index=6&type=section&id=Part%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Astrana Health's Q1 2025 revenue increased 53% to $620.4 million, primarily from acquisitions, but net income declined 55% to $6.7 million [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $1.33 billion, slightly down from year-end 2024, while total liabilities decreased to $813.6 million, increasing total equity Key Balance Sheet Items ($ in thousands) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $258,517 | $288,455 | | Receivables, net | $241,078 | $225,733 | | Goodwill | $416,386 | $419,253 | | Total assets | $1,331,256 | $1,354,894 | | **Liabilities & Equity** | | | | Medical liabilities | $204,101 | $209,039 | | Long-term debt, net | $403,894 | $425,299 | | Total liabilities | $813,550 | $840,726 | | Total equity | $750,439 | $716,726 | [Condensed Consolidated Statements of Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q1 2025 total revenue increased 53% to $620.4 million, driven by capitation, but operating income fell 32% to $20.6 million, and net income decreased 55% to $6.7 million Q1 2025 vs. Q1 2024 Performance ($ in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $620,390 | $404,356 | | Capitation, net | $583,963 | $365,910 | | Income from operations | $20,583 | $30,139 | | Net income attributable to Astrana Health, Inc. | $6,692 | $14,835 | | Earnings per share – diluted | $0.14 | $0.31 | [Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 operating cash flow increased to $16.6 million, investing cash outflow decreased to $2.4 million, and financing activities used $44.2 million, resulting in a net cash decrease of $29.9 million Cash Flow Summary ($ in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,627 | $5,977 | | Net cash used in investing activities | $(2,394) | $(71,039) | | Net cash (used in) provided by financing activities | $(44,170) | $106,351 | | **Net (decrease) increase in cash** | **$(29,937)** | **$41,289** | [Notes to Condensed Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail business structure, accounting policies, and key financial events, including recent acquisitions, debt refinancing, related-party transactions, and the use of VIEs across three segments - The company operates through three reportable segments: Care Partners (provider networks), Care Delivery (clinics and ancillary services), and Care Enablement (technology and MSO services)[46](index=46&type=chunk)[47](index=47&type=chunk) - In February 2025, the company entered into a Second Amended and Restated Credit Agreement, establishing a **$300M Revolver Loan**, a **$250M Term Loan**, and a **$745M Delayed Draw Term Loan**, primarily to refinance existing debt and fund the pending Prospect acquisition[97](index=97&type=chunk) - Due to corporate practice of medicine laws, the company utilizes Variable Interest Entities (VIEs), such as affiliated IPAs and medical groups, which are consolidated into its financial statements[156](index=156&type=chunk)[157](index=157&type=chunk) [Management's Discussion and Analysis (MD&A)](index=50&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes Q1 2025 revenue growth to acquisitions, but higher costs led to declines in operating income and net income, with Adjusted EBITDA falling to $36.4 million [Results of Operations](index=52&type=section&id=Results%20of%20Operations) Q1 2025 total revenue grew 53% to $620.4 million, driven by capitation, but cost of services rose 66%, leading to a 32% drop in operating income to $20.6 million and a 55% fall in net income to $6.7 million - The **53% increase in total revenue** was primarily driven by acquisitions within the Care Partners segment and more enrollees transitioning to full-risk plans[203](index=203&type=chunk) - Cost of services increased by **66%**, driven by higher medical costs associated with new acquisitions and increased participation in a value-based Medicare FFS model[204](index=204&type=chunk) - General and administrative expenses rose **13%** to **$43.9 million**, mainly due to increased costs like stock-based compensation to support operational growth[205](index=205&type=chunk) [Segment Financial Performance](index=54&type=section&id=Segment%20Financial%20Performance) In Q1 2025, Care Partners revenue grew 57% to $601.0 million, Care Delivery revenue increased 9% to $33.4 million with a wider loss, and Care Enablement revenue rose 19% to $39.6 million with flat operating income Segment Performance ($ in thousands) | Segment | Revenue Q1 2025 | Revenue Q1 2024 | % Change | Operating Income Q1 2025 | Operating Income Q1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Care Partners | $600,951 | $382,318 | 57% | $44,215 | $43,196 | 2% | | Care Delivery | $33,388 | $30,719 | 9% | $(3,108) | $(238) | * | | Care Enablement | $39,562 | $33,274 | 19% | $3,535 | $3,504 | 1% | [Non-GAAP Financial Measures](index=56&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA decreased to **$36.4 million** in Q1 2025 from $42.2 million in Q1 2024, with the margin declining from **10% to 6%**, primarily due to lower operating income and higher expenses Reconciliation of Net Income to Adjusted EBITDA ($ in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income | $6,221 | $16,862 | | EBITDA | $21,449 | $32,689 | | **Adjusted EBITDA** | **$36,386** | **$42,245** | | Total revenue | $620,390 | $404,356 | | **Adjusted EBITDA margin** | **6%** | **10%** | [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held **$260.9 million** in cash and equivalents, with liquidity enhanced by a February 2025 debt refinancing establishing over **$1.2 billion** in new credit facilities to support operations and acquisitions - Cash, cash equivalents, and marketable securities totaled **$260.9 million** at March 31, 2025[226](index=226&type=chunk) - In February 2025, the company entered into a new credit agreement providing a **$300M revolver**, **$250M term loan**, and a **$745M delayed-draw term loan**[227](index=227&type=chunk) Cash Flow Summary Q1 2025 vs Q1 2024 ($ in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,627 | $5,977 | | Net cash used in investing activities | $(2,394) | $(71,039) | | Net cash (used in) provided by financing activities | $(44,170) | $106,351 | [Quantitative and Qualitative Disclosures about Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces interest rate risk on **$412.0 million** of variable-rate debt, mitigated by an interest rate collar on the Revolver Loan with a **5.00% cap** and **2.34% floor** - The company is exposed to interest rate risk on **$412.0 million** of variable-rate debt (**$250.0M Term Loan** and **$162.0M Revolver Loan**)[238](index=238&type=chunk) - An interest rate collar agreement is used to manage risk on the Revolver Loan, with a SOFR cap of **5.00%** and a floor of **2.34%**[238](index=238&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2025[240](index=240&type=chunk) - No changes were identified in the company's internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[241](index=241&type=chunk) Part II [Other Information](index=62&type=section&id=Part%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management does not expect them to have a material adverse effect on its financial condition or operations - The company is party to various lawsuits and claims in the normal course of business, but management does not expect them to have a **material adverse effect**[243](index=243&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported from those disclosed in the company's 2024 Annual Report on Form 10-K - The company states there have been **no material changes** in its risk factors from those disclosed in its 2024 Annual Report on Form 10-K[245](index=245&type=chunk) [Share Repurchases and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company repurchased 444,777 shares, including 300,000 from an affiliate for **$10.6 million**, with **$40.5 million** remaining for future repurchases - As of March 31, 2025, **$40.5 million** remained available for repurchase under the company's share repurchase plan[248](index=248&type=chunk) - In Q1 2025, the company repurchased **300,000 shares** from its affiliate, Allied Physicians of California (APC), for approximately **$10.6 million**[253](index=253&type=chunk)

Financial Performance - Q1 2025 - Revenue for Q1 2025 was $6204 million[10], a 53% increase compared to $4044 million in Q1 2024[27] - Net income attributable to Astrana Health was $67 million[10] - Adjusted EBITDA for Q1 2025 was $364 million[10], with an Adjusted EBITDA margin of 6%[41] - The company is projecting full year 2025 revenue to be between $25 billion and $27 billion[23, 33] - The company is projecting full year 2025 Adjusted EBITDA to be between $170 million and $190 million[25, 33] Segment Performance - Q1 2025 - Care Partners segment revenue was $6010 million in Q1 2025[27], representing a 57% increase year-over-year[38] - Care Delivery segment revenue was $334 million in Q1 2025[27], representing a 9% increase year-over-year[38] - Care Enablement segment revenue was $396 million in Q1 2025[27], representing a 19% increase year-over-year[38] Risk Arrangement & Membership - 75% of total capitation revenue came from full-risk arrangements[14] - 38% of Care Partners members are in full-risk arrangements[14] - The company projects that 75-85% of capitation revenue will come from full-risk arrangements by the end of 2025[21] - Care Partners segment has 910000 members[14] Strategic Initiatives - The company expects to achieve at least $10 million in annual operating efficiencies by early 2026 through investments in automation and AI[13]

Company Performance - Astrana Health, Inc. reported quarterly earnings of $0.14 per share, missing the Zacks Consensus Estimate of $0.23 per share, and down from $0.31 per share a year ago, representing an earnings surprise of -39.13% [1] - The company posted revenues of $620.39 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.33%, but up from $404.36 million year-over-year [2] - Over the last four quarters, the company has surpassed consensus EPS estimates just once, while it has topped consensus revenue estimates three times [2] Stock Outlook - Astrana Health, Inc. shares have increased by approximately 1.9% since the beginning of the year, contrasting with the S&P 500's decline of -4.3% [3] - The current consensus EPS estimate for the coming quarter is $0.35 on revenues of $646.89 million, and for the current fiscal year, it is $1.32 on revenues of $2.63 billion [7] - The estimate revisions trend for Astrana Health, Inc. is mixed, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Industry Context - The Medical - Outpatient and Home Healthcare industry, to which Astrana Health, Inc. belongs, is currently in the top 19% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Data and Key Metrics Changes - Astrana Health reported total revenue of $620.4 million for Q1 2025, a 53% increase compared to the prior year period [9][21] - Adjusted EBITDA for the quarter was $36.4 million, reflecting continued success in growing membership and managing cost trends effectively [9][21] - Net income attributable to Astrana for the quarter was $6.7 million, with an EPS of $0.14 per share [21] - The company closed the quarter with $260.9 million in cash and short-term investments [22] Business Line Data and Key Metrics Changes - The Care Partners segment grew 57% year over year, contributing $600 million to total revenue [9] - Approximately 38% of members are now in full risk contracts, up from 5.5% a year ago, accounting for 75% of capitated revenue [11] - CHS contributed $95 million in revenue for the quarter, in line with expectations [9][14] Market Data and Key Metrics Changes - Membership in the Care Partners segment reached 910,000 as of Q1 2025 [11] - In Nevada, the risk-bearing network achieved breakeven, with membership growing 40% and clinic visit volume increasing by 35% year over year [12] - Texas is on track to reach profitability in late 2025, with ongoing transformation efforts [12] Company Strategy and Development Direction - The company focuses on four strategic pillars: sustainable membership growth, alignment of patient outcomes with financial performance, improving care quality while managing costs, and driving operational excellence through a proprietary care enablement platform [6][8] - The integration of CHS onto the Astrana platform is complete, with over $10 million in G&A efficiencies identified [13][28] - The planned acquisition of Prospect Health is expected to significantly expand the provider network in Southern California, serving approximately 1.7 million members in value-based arrangements [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver sustainable, profitable growth despite current market conditions [22][23] - The 2026 Medicare Advantage rate notice is seen as a positive signal for the business, reinforcing a stable reimbursement outlook [17][18] - Management remains optimistic about the overall trend guidance for the year, despite challenges in the Medicaid sector due to higher ER and lab utilization [10][36] Other Important Information - The company generated $13.6 million in free cash flow for the quarter, with a non-recurring debt issuance cost of $5 million [22] - The expected pro forma net leverage post-acquisition of Prospect is approximately 3.4 times, with a goal to deleverage below three times within twelve months [22] Q&A Session Summary Question: Details on CHS integration progress - Integration of CHS is complete, with staff onboarded to the platform and over $10 million in G&A efficiencies identified [26][28] Question: Status of the Prospect deal and Medicare Advantage exposure - The Prospect acquisition is awaiting regulatory approvals, with integration activities underway to prepare for onboarding 600,000 members [29][32] Question: Medicaid trends and utilization impacts - Medicaid trends are above average due to increased ER and lab utilization, but management is comfortable with the overall trend guidance for the year [34][36] Question: Revenue guidance for Q2 and factors affecting it - Revenue guidance for Q2 is slightly lower than expected due to seasonality and the timing of full risk member conversions [40][42] Question: MSSP shared savings booked in Q1 - No MSSP shared savings were booked in Q1, with expectations to book in the latter half of the year [78] Question: Concerns about the Prospect Medical transaction - Management remains confident in the $81 million adjusted EBITDA contribution from Prospect, based on audited financials [91][94] Question: Medical trend visibility and oncology costs - The company anticipates a full-year medical trend of 4.5%, with no significant spikes in oncology costs observed [96][97] Question: Impact of tariffs on business - The company has minimal exposure to Part D risk, and potential tariff impacts are not expected to significantly affect operations [99][100]

Financial Data and Key Metrics Changes - Astrana Health reported total revenue of $620.4 million for Q1 2025, a 53% increase compared to the prior year period [8][19] - Adjusted EBITDA for the quarter was $36.4 million, reflecting continued success in growing membership and managing cost trends effectively [8][19] - Net income attributable to Astrana for the quarter was $6.7 million, with earnings per share (EPS) of $0.14 [19] - The company closed the quarter with $260.9 million in cash and short-term investments [20] Business Line Data and Key Metrics Changes - The Care Partners segment grew 57% year over year, contributing $600 million to total revenue [8] - Membership in the Care Partners segment reached 910,000 as of Q1 2025, with approximately 38% of members now in full risk contracts, up from 5.5% a year ago [10] - CHS contributed $95 million in revenue for the quarter, in line with expectations [8][19] Market Data and Key Metrics Changes - Medical cost trends for the quarter were in line with expectations, in the mid-single digits, with Medicaid trends above and Medicare and commercial trends below the blended average [9][10] - In Nevada, membership in the risk-bearing network grew 40%, and clinic visit volume increased by 35% year over year [11] Company Strategy and Development Direction - The company focuses on four strategic pillars: sustainable membership growth, alignment of patient outcomes with financial performance, improving care quality while managing costs, and driving operational excellence through a proprietary care enablement platform [5][6] - The integration of CHS onto the Astrana platform is complete, with over $10 million in G&A efficiencies identified [12] - The company plans to close the acquisition of Prospect Health, which will significantly expand its provider network in Southern California [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver sustainable, profitable growth despite the current environment [20] - The 2026 Medicare Advantage rate notice is seen as a positive signal for the business, reinforcing a stable reimbursement outlook [15] - Management remains optimistic about the integration of Prospect Health and its potential contributions to revenue and EBITDA [13][19] Other Important Information - The company generated $13.6 million in free cash flow for the quarter, with a non-recurring debt issuance cost of $5 million [20] - The expected pro forma net leverage post-acquisition of Prospect is approximately 3.4 times, with a goal to deleverage below three times within twelve months post-close [20] Q&A Session Summary Question: Details on CHS integration progress - Management confirmed that the integration of CHS is complete, with technology deployed and G&A efficiencies identified [25][26] Question: Status of the Prospect deal and Medicare Advantage exposure - Management is preparing for the integration of Prospect Health, with regulatory approvals pending, and anticipates that approximately 60% of combined revenue will be related to Medicare [30][31] Question: Medicaid trends and utilization impacts - Management noted that the increase in Medicaid utilization was primarily due to a spike in ER and lab visits, not from redetermination impacts [32][34] Question: Guidance for second quarter revenue - Management indicated that the guidance for Q2 revenue is slightly lower than expected due to seasonality and anticipated full risk member conversions being weighted towards the latter half of the year [38][39] Question: MSSP shared savings booked in Q1 - Management reported zero MSSP shared savings booked in Q1, with expectations to book savings in the latter half of the year [71] Question: Concerns about the Prospect Medical transaction - Management reassured that the audited financials for Prospect are above the anticipated $81 million in adjusted EBITDA, and they remain confident in the earnings power of Prospect [86][87]