P3 Health Partners Inc. (PIII) shares soared 8.9% in the last trading session to close at $9.79. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 5% gain over the past four weeks.P3 Health Partners recorded a strong price rise on investors’ optimism surrounding the company’s fourth quarter 2024 financial results. The company reported fourth quarter revenue of $371 million, a 7% increase year over year. The company reaffirmed its 2 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2024 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-40033 P3 Health Partners Inc. (Exact name of registrant as specified in its charter) Delaware 85-2992794 (State or other jurisdiction of incorp ...

P3 Health Partners Inc. (NASDAQ:PIII) Q4 2024 Earnings Conference Call March 27, 2025 4:30 PM ET Company Participants Ryan Halsted - IR Aric Coffman - CEO Leif Pedersen - CFO Amir Bacchus - Chief Medical Officer Conference Call Participants Josh Raskin - Nephron Research David Larsen - BTIG Ryan Langston - TD Cowen Jack Senft - William Blair Operator Good day and welcome to the P3 Health Partners’ Fourth Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instruc ...

Group 1 - The conference call is for P3 Health Partners' Fourth Quarter 2024 Earnings [1] - Participants include company executives and analysts from various research firms [1][2] - The call will cover forward-looking statements regarding financial outlook and long-term targets [4] Group 2 - The company emphasizes that forward-looking statements are predictions based on current expectations [4] - There are risks and uncertainties that could lead to actual results differing from expectations [5] - The company will refer to non-GAAP financial measures during the call [5]

Core Viewpoint - P3 Health Partners Inc. reported a quarterly loss of $0.32 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.17, indicating significant underperformance in earnings expectations [1][2]. Financial Performance - The company posted revenues of $370.69 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 3.92%, but showing an increase from $346.86 million in the same quarter last year [2]. - Over the last four quarters, P3 Health Partners has surpassed consensus EPS estimates only once [2]. Stock Performance - P3 Health Partners shares have declined approximately 20.8% since the beginning of the year, contrasting with the S&P 500's decline of 2.9% [3]. - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.09 on revenues of $379.5 million, and for the current fiscal year, it is -$0.37 on revenues of $1.42 billion [7]. - The estimate revisions trend for P3 Health Partners is currently favorable, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting it is expected to outperform the market in the near future [6]. Industry Context - The Medical Info Systems industry, to which P3 Health Partners belongs, is currently ranked in the top 17% of over 250 Zacks industries, indicating a favorable outlook compared to lower-ranked industries [8].

Revenue Performance - Total revenue for Q4 2024 was $370.7 million, a 7% increase from $346.9 million in Q4 2023[5] - Full-year 2024 total revenue reached $1.50 billion, an 18% increase compared to $1.27 billion in 2023[5] - Total operating revenue for the year ended December 31, 2024, was $1,500,455,000, an increase of 18.4% from $1,266,375,000 in 2023[20] - Capitated revenue for Q4 2024 was $367,456,000, up 7.2% from $342,836,000 in Q4 2023[20] - Capitated revenue for the year ended December 31, 2024, reached $1.484 billion, up from $1.252 billion in 2023, reflecting a growth of 18.5%[28] Membership and Guidance - At-risk membership increased by approximately 14% to 123,800 from 108,900 in the prior year[5] - The company affirmed its 2025 guidance with total revenues projected between $1.35 billion and $1.50 billion[7] - The expected at-risk members for 2025 are between 109,000 and 119,000[7] Losses and Expenses - Net loss for Q4 2024 was $129.1 million, compared to a net loss of $69.1 million in Q4 2023[5] - The net loss for the year ended December 31, 2024, was $310,378,000, compared to a net loss of $186,426,000 in 2023, representing a 66.4% increase in losses[22] - Adjusted EBITDA loss for Q4 2024 was $67.6 million, compared to a loss of $44.3 million in Q4 2023[5] - Adjusted EBITDA loss for the year ended December 31, 2024, was $167.199 million, compared to a loss of $85.504 million in 2023, showing an increase of 95.4%[25] - Total operating expense for Q4 2024 was $509.189 million, compared to $411.121 million in Q4 2023, an increase of 23.9%[32] - Medical expenses for the year ended December 31, 2024, were $1,559,372,000, an increase of 26.3% from $1,234,740,000 in 2023[20] - Medical claims expense for the year ended December 31, 2024, totaled $1.398 billion, up from $1.117 billion in 2023, representing a rise of 25.1%[28] Profitability Metrics - Full-year 2024 gross profit was a loss of $58.9 million, compared to a profit of $31.6 million in the prior year[5] - Medical margin for full-year 2024 was $85.5 million, a 37% decrease from $135.1 million in the prior year[5] - Medical margin for Q4 2024 was $7.278 million, down from $9.075 million in Q4 2023, indicating a decrease of 20%[28] - Medical margin PMPM for the year ended December 31, 2024, was $75, down from $108 in 2023, a decrease of 30.6%[28] Assets and Liabilities - Total current assets increased to $184,140,000 in 2024 from $166,017,000 in 2023, reflecting an increase of 10.9%[18] - Total liabilities rose significantly to $633,891,000 in 2024 from $427,305,000 in 2023, marking a 48.3% increase[18] - Cash and restricted cash at the end of 2024 totaled $44,102,000, up from $40,934,000 at the end of 2023, indicating a 5.3% increase[23] Reserves and Interest Expenses - The company reported a premium deficiency reserve of $67,368,000 in 2024, compared to $13,670,000 in 2023, reflecting a significant increase[20] - Premium deficiency reserve for Q4 2024 was $37.927 million, compared to a reserve of $(3.344) million in Q4 2023, indicating a significant change[25] - The company incurred interest expense of $22,173,000 for the year ended December 31, 2024, compared to $15,985,000 in 2023, representing a 38.5% increase[22] - Interest expense, net for the year ended December 31, 2024, was $22.173 million, compared to $15.985 million in 2023, reflecting a rise of 38.5%[25] Shareholder Metrics - The weighted average common shares outstanding for the year ended December 31, 2024, were 145,175,000, compared to 94,889,000 in 2023, an increase of 53%[20]

Core Viewpoint - P3 Health Partners Inc. (PIII) has experienced a decline of 7.6% over the past week, but the formation of a hammer chart pattern suggests potential support and a possible trend reversal in the future [1][2]. Technical Analysis - The hammer chart pattern indicates a potential bottom, suggesting that selling pressure may be subsiding [2][4]. - A hammer pattern forms when there is a small candle body with a long lower wick, indicating that despite a downtrend, buying interest has emerged [3][4]. - This pattern is significant when it occurs at the bottom of a downtrend, signaling that bears may have lost control [4]. Fundamental Analysis - There has been a recent upward trend in earnings estimate revisions for PIII, which is a bullish indicator [6]. - The consensus EPS estimate for the current year has increased by 11.9% over the last 30 days, reflecting analysts' agreement on the company's improved earnings potential [7]. - PIII holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, indicating strong potential for outperformance [8].

Core Viewpoint - Kuehn Law, PLLC is investigating potential breaches of fiduciary duties by officers and directors of P3 Health Partners Inc. related to self-dealing, which may entitle shareholders to damages and corporate governance reforms [1]. Group 1 - The investigation focuses on whether certain officers and directors of P3 Health Partners Inc. have engaged in self-dealing that could harm shareholder interests [1]. - Shareholders are encouraged to contact Kuehn Law for a free consultation regarding their rights and potential claims [2]. - The firm emphasizes the importance of shareholder participation in maintaining the integrity and fairness of financial markets [3].

Financial Data and Key Metrics Changes - The third quarter top line performance included capitated revenue of $357.7 million and total revenue of $362.1 million, representing a 26% year-over-year growth driven by a 22% increase in member base to over 128,900 members and a 6% rise in funding year-over-year [35][36] - The medical margin was $540,000 or $1 on a PMPM basis, while adjusted EBITDA loss for the quarter was $71 million or $184 on a PMPM basis, impacted by $5 million to $10 million in elevated medical claims costs and $35 million in retroactive adjustments [36][39] - Cash flow from operations for the quarter was approximately negative $20 million, with the company ending Q3 with about $63 million in cash [41][56] Business Line Data and Key Metrics Changes - The company experienced elevated medical utilization primarily in Part B medical claims, with negative prior period development contributing about $10 million additional expense during the quarter [39][46] - High-cost claims greater than $50,000 rose 23% year-over-year, with Part B oncological medications leading the increase [48] Market Data and Key Metrics Changes - The Medicare Advantage repricing cycle and benefit design changes are expected to serve as catalysts for profitability in 2025, with anticipated recalibration of CMS benchmarks reflecting ongoing elevated utilization [16][17] - The company noted that many health plan partners are targeting margin recapture, expecting plan benefits to be less robust in 2025, which should lead to decreased utilization [17][30] Company Strategy and Development Direction - The company is executing on a plan involving over $130 million in initiatives aimed at positively impacting EBITDA and cash flow, with benefits expected to begin in Q4 and more prominently in 2025 [9][14] - Key areas of focus include enhancing payer and provider networks, improving operational discipline, increasing operating efficiency, and advancing data and analytics capabilities [15][43] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in 2024 but expressed optimism about the future, emphasizing the importance of value-based care in controlling medical costs and preserving margins [53][30] - The leadership team is focused on setting reliable targets that reflect the current market landscape while providing opportunities for outperformance [42] Other Important Information - The company has trimmed 63 provider tax ID numbers and reduced its payer network by 20% to enhance profitability and simplify operations [23][22] - A partnership with Innovaccer is on track for full implementation in 2025, aimed at improving data visibility and supporting decision-making [26][27] Q&A Session Summary Question: How does the company see its capital availability to execute initiatives? - The company ended the quarter with $63 million in cash, supporting core operations and strategic growth initiatives, while actively monitoring cash burn and focusing on optimizing working capital [57] Question: Is the company pursuing additional capital raise in the fourth quarter? - Currently, the company is not pursuing an immediate capital raise and is evaluating its overall cash position [60] Question: Will 2025 revenues be down due to risk exposure reduction? - There will be a slight reduction in membership associated with revenue reduction due to payer and provider rationalization, but increases from operational improvements are expected to offset this [62][64] Question: Can the company provide specifics on chronic disease improvement opportunities? - The company is focusing on operational efficiency by providing more support to high-value providers and enhancing coding and documentation practices [66][70] Question: Why was there a spike in the medical cost ratio (MCR) this quarter? - The spike was attributed to delayed information from plans, particularly in non-delegated plans, leading to unexpected cost escalations [72][74] Question: Will the MCR remain elevated in Q4 and will there be a sudden step down in Q1 2025? - The company expects immediate effects from benefit design changes starting in January, but specifics on the magnitude of impact will be clearer after open enrollment [75][76] Question: Can the company elaborate on enhancing payer and provider contracts? - The company is looking to change its position in Part D across most contracts and has exited subscale contracts that were not strong performers [78][81] Question: Is the company considering exiting certain markets entirely? - The company plans to exit the Florida market due to its small size and lack of investment potential [83]

Core Insights - P3 Health Partners Inc. reported a quarterly loss of $0.31 per share, significantly worse than the Zacks Consensus Estimate of a loss of $0.03, marking an earnings surprise of -933.33% [1] - The company's revenues for the quarter ended September 2024 were $362.12 million, missing the Zacks Consensus Estimate by 1.76%, but showing an increase from $288.35 million year-over-year [2] - P3 Health Partners shares have declined approximately 71.9% year-to-date, contrasting with the S&P 500's gain of 25.8% [3] Financial Performance - Over the last four quarters, P3 Health Partners has surpassed consensus EPS estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is $0.02 on revenues of $391.1 million, and for the current fiscal year, it is -$0.23 on revenues of $1.54 billion [7] Market Outlook - The earnings outlook for P3 Health Partners is mixed, with the stock currently holding a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] - The Medical Info Systems industry, to which P3 Health Partners belongs, is currently ranked in the top 19% of over 250 Zacks industries, suggesting a favorable industry outlook [8]