PART I—FINANCIAL INFORMATION [Item 1. Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2025 show a **$44.2 million net loss**, stable assets, increased liabilities, and a going concern warning [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were **$783.9 million**, total liabilities **$662.8 million**, with a **$315.6 million** working capital deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $40,082 | $38,816 | | Total Current Assets | $191,435 | $184,140 | | Intangible assets, net | $553,889 | $574,350 | | **Total Assets** | **$783,870** | **$783,420** | | **Liabilities & Equity** | | | | Claims payable | $268,664 | $255,089 | | Total Current Liabilities | $507,034 | $496,415 | | Long-term debt, net | $106,121 | $89,824 | | **Total Liabilities** | **$662,791** | **$633,891** | | Total Stockholders' Equity | $63,250 | $75,936 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, total operating revenue decreased **4%** to **$373.2 million**, resulting in a net loss of **$44.2 million**, an improvement from Q1 2024 Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Capitated revenue | $369,517 | $384,134 | | **Total Operating Revenue** | **$373,225** | **$388,488** | | Medical expense | $372,043 | $382,057 | | **Operating Loss** | **($38,088)** | **($43,831)** | | **Net Loss** | **($44,246)** | **($49,606)** | | Net Loss Attributable to Controlling Interest | ($20,480) | ($18,700) | | **Net Loss Per Share (Basic & Diluted)** | **($6.28)** | **($7.86)** | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly increased to **$33.5 million** in Q1 2025, offset by **$30.7 million** from financing, ending with **$41.3 million** cash Q1 2025 vs Q1 2024 Cash Flows (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($33,466) | ($20,030) | | Net cash provided by financing activities | $30,657 | $11,401 | | **Net change in cash and restricted cash** | **($2,809)** | **($8,629)** | | Cash and restricted cash, end of period | $41,293 | $32,305 | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes highlight substantial doubt about going concern, **$30 million** new debt financing, a 1-for-50 reverse stock split, and a subsequent asset sale - The company has experienced losses since inception and anticipates operating losses and negative cash flows to continue, raising **substantial doubt** about its ability to continue as a going concern within one year[37](index=37&type=chunk)[38](index=38&type=chunk) - On April 11, 2025, the company effected a **1-for-50 reverse stock split** of its Class A and Class V common stock to meet Nasdaq's minimum bid price requirement, with all share and per-share amounts retroactively adjusted[50](index=50&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - In February 2025, P3 LLC secured up to **$30.0 million** in new debt financing via the VGS 4 Promissory Note, fully drawn by March 14, 2025, maturing in August 2028 with a **19.5% interest rate**[65](index=65&type=chunk) - On May 1, 2025, the company sold its remaining MA-related business assets in Clearwater, Florida, for approximately **$0.1 million**[94](index=94&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **4%** revenue decrease, improved net loss, widened Adjusted EBITDA loss, critical liquidity, and ongoing efforts to secure additional financing [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Total operating revenue decreased **4%** to **$373.2 million** in Q1 2025 due to a **9%** drop in members, while medical expenses also decreased, and a **$7.0 million** premium deficiency reserve benefit was recognized Revenue Comparison (in thousands) | Revenue Type | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Capitated revenue | $369,517 | $384,134 | ($14,617) | (4)% | | **Total operating revenue** | **$373,225** | **$388,488** | **($15,263)** | **(4)%** | - The decrease in capitated revenue was primarily driven by a **9% decrease** in at-risk members, from 126,800 at March 31, 2024, to 115,500 at March 31, 2025, due to strategic termination of underperforming contracts[138](index=138&type=chunk)[159](index=159&type=chunk) - Premium deficiency reserve was a **$7.0 million benefit** in Q1 2025 versus a **$1.0 million expense** in Q1 2024, a change of **$8.0 million**, due to network rationalization and improved contract profitability[162](index=162&type=chunk) [Non-GAAP Financial Measures](index=27&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA loss widened to **$22.2 million** in Q1 2025, and Medical Margin significantly decreased to **$17.2 million**, reflecting profitability pressures Reconciliation of Net Loss to Adjusted EBITDA Loss (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(44,246) | $(49,606) | | Interest expense, net | 8,725 | 4,256 | | Depreciation and amortization | 21,052 | 21,539 | | Income tax provision | 1,073 | 2,072 | | Mark-to-market of stock warrants | (3,322) | (216) | | Premium deficiency reserve | (6,962) | 1,000 | | Equity-based compensation | 1,808 | 1,449 | | Other | (318) | (264) | | **Adjusted EBITDA loss** | **$(22,190)** | **$(19,770)** | Medical Margin Calculation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Capitated revenue | $369,517 | $384,134 | | Less: medical claims expense | (352,317) | (347,582) | | **Medical margin** | **$17,200** | **$36,552** | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces significant liquidity challenges, with **$40.1 million** unrestricted cash insufficient for operations, leading to a going concern warning, despite securing **$30 million** in new debt - The company has concluded that there is **substantial doubt** about its ability to continue as a going concern, as existing cash resources are not sufficient to support planned operations for at least the next year[183](index=183&type=chunk) - As of March 31, 2025, the company had **$40.1 million** of unrestricted cash and cash equivalents[166](index=166&type=chunk) - In February 2025, the company entered into a financing transaction for a **$30.0 million** unsecured promissory note (VGS 4 Promissory Note), which was fully drawn by March 14, 2025[169](index=169&type=chunk) Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(33,466) | $(20,030) | | Net cash provided by financing activities | $30,657 | $11,401 | | **Net change in cash** | **$(2,809)** | **$(8,629)** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not required as the company qualifies as a Smaller Reporting Company - Disclosure is not required for Smaller Reporting Companies[193](index=193&type=chunk) [Item 4. Controls and Procedures](index=39&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 to internal controls - Based on an evaluation as of the end of the reporting period, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were **effective** as of March 31, 2025[195](index=195&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[196](index=196&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company received a civil investigative demand from the DOJ in June 2024 regarding an investigation under the False Claims Act concerning arrangements with insurance agents - In June 2024, the company received a **civil investigative demand (CID)** from the Department of Justice (DOJ) under the **False Claims Act**[200](index=200&type=chunk) - The investigation concerns the company's **arrangements with insurance agents and brokers**, including remuneration paid to them, and the company is cooperating with the investigation[200](index=200&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) The primary risk is potential delisting from Nasdaq due to minimum bid price non-compliance, addressed by a **1-for-50 reverse stock split**, though sustained compliance is not assured - The company faces a risk of **delisting** from The **Nasdaq Capital Market** for failure to meet continued listing requirements, specifically the **minimum bid price rule**[202](index=202&type=chunk) - After receiving a deficiency notice, the company effected a **1-for-50 reverse stock split** and **regained compliance** with the bid price rule on April 29, 2025, but there is no assurance of sustained compliance or that the stock's liquidity won't be harmed[203](index=203&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the quarter ended March 31, 2025, that were not previously disclosed - **No unregistered sales** of equity securities occurred during the quarter that were not already reported on a Form 8-K[206](index=206&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - Not applicable[207](index=207&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[208](index=208&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) No other material information is reported, and no director or officer adopted or terminated Rule 10b5-1 trading arrangements during the quarter - During the quarter ended March 31, 2025, **no director or officer adopted or terminated a Rule 10b5-1 trading arrangement** or a non-Rule 10b5-1 trading arrangement[211](index=211&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents, financing agreements, and officer certifications

[P3 Health Partners First Quarter 2025 Financial Results](index=1&type=section&id=P3%20Health%20Partners%20Announces%20First%20Quarter%202025%20Results) [Management Commentary](index=1&type=section&id=Management%20Commentary) The CEO reports the turnaround plan is ahead of schedule, with three markets achieving breakeven, and highlights ongoing investments in technology and clinical programs - The company's turnaround plan is ahead of schedule, with **three out of four markets achieving breakeven or better in Q1**[3](index=3&type=chunk) - P3 has identified additional value creation opportunities through enhanced complex care programs and payment integrity initiatives[3](index=3&type=chunk) - The company is making targeted investments in technology infrastructure and innovative clinical programs to drive long-term value[3](index=3&type=chunk) [First Quarter 2025 Financial & Operational Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20%26%20Operational%20Highlights) Q1 2025 saw total revenue decrease by 4% to $373.2 million, medical margin fall to $17.2 million due to a $23 million adjustment, and Adjusted EBITDA loss widen to $22.2 million, alongside an 8% decline in at-risk membership Q1 2025 Key Financial and Operational Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $373.2M | $388.5M | -4% | | Medical Margin | $17.2M | $36.6M | -53% | | Adjusted EBITDA Loss | $(22.2)M | $(19.8)M | +12.1% | | Average At-Risk Membership | 115,900 | N/A | -8% (vs FY 2024 avg) | | Medical Margin PMPM | $49 | $96 | -49% | | Adjusted EBITDA Loss PMPM | $(64) | $(52) | +23.1% | - Medical margin and Adjusted EBITDA were negatively impacted by prior year claims and retroactive adjustments from a single payer, amounting to a **$23 million** and **$9 million net impact**, respectively[7](index=7&type=chunk) - The **8% decrease** in average at-risk membership compared to the full year 2024 average was a result of previously disclosed network and payer rationalization[7](index=7&type=chunk) [Fiscal 2025 Guidance](index=1&type=section&id=Fiscal%202025%20Guidance) The company affirmed its FY2025 guidance, projecting total revenues between **$1.35 billion** and **$1.50 billion**, at-risk membership between **109,000** and **119,000**, and Adjusted EBITDA ranging from a **$35 million loss** to a **$5 million profit** Fiscal Year 2025 Guidance | Metric | Low | High | | :--- | :--- | :--- | | At-risk Members | 109,000 | 119,000 | | Total Revenues (in millions) | $1,350 | $1,500 | | Medical Margin (in millions) | $174 | $210 | | Medical Margin PMPM | $133 | $147 | | Adjusted EBITDA (in millions) | $(35) | $5 | - The company is not providing a quantitative reconciliation for its forward-looking non-GAAP measures (Adjusted EBITDA, medical margin) to the most comparable GAAP measures due to uncertainty around certain items[6](index=6&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets were **$783.9 million**, total liabilities increased to **$662.8 million** due to long-term debt, and total stockholders' equity decreased to **$63.3 million** Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $40,082 | $38,816 | | Total Current Assets | $191,435 | $184,140 | | Total Assets | $783,870 | $783,420 | | Claims payable | $268,664 | $255,089 | | Total Current Liabilities | $507,034 | $496,415 | | Total Liabilities | $662,791 | $633,891 | | Total Stockholders' Equity | $63,250 | $75,936 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Q1 2025 total operating revenue decreased to **$373.2 million**, while operating loss narrowed to **$38.1 million**, and net loss improved to **$44.2 million** or **$(6.28) per share** Q1 Statement of Operations (in thousands, except per share) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total Operating Revenue | $373,225 | $388,488 | | Total Operating Expense | $411,313 | $432,319 | | Operating Loss | $(38,088) | $(43,831) | | Net Loss | $(44,246) | $(49,606) | | Net Loss Per Share (Basic & Diluted) | $(6.28) | $(7.86) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Q1 2025 saw net cash used in operating activities increase to **$33.5 million**, offset by **$30.7 million** from financing activities, resulting in a **$2.8 million** decrease in cash and restricted cash Q1 Statement of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(33,466) | $(20,030) | | Net cash provided by financing activities | $30,657 | $11,401 | | Net change in cash and restricted cash | $(2,809) | $(8,629) | | Cash and restricted cash, end of period | $41,293 | $32,305 | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) [Reconciliation of Net Loss to Adjusted EBITDA Loss](index=7&type=section&id=RECONCILIATION%20OF%20NET%20LOSS%20TO%20ADJUSTED%20EBITDA%20LOSS) Q1 2025 GAAP net loss of **$44.2 million** was reconciled to a non-GAAP Adjusted EBITDA loss of **$22.2 million**, primarily by adjusting for depreciation, amortization, and net interest expense Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(44,246) | $(49,606) | | Adjustments (Depreciation, Interest, etc.) | $22,056 | $29,836 | | **Adjusted EBITDA loss** | **$(22,190)** | **$(19,770)** | [Medical Margin](index=7&type=section&id=MEDICAL%20MARGIN) Q1 2025 medical margin significantly decreased to **$17.2 million** from **$36.6 million** in Q1 2024, with medical margin PMPM falling from **$96** to **$49** Medical Margin Calculation (in thousands, except PMPM) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Capitated revenue | $369,517 | $384,134 | | Less: medical claims expense | $(352,317) | $(347,582) | | **Medical margin** | **$17,200** | **$36,552** | | **Medical margin PMPM** | **$49** | **$96** | [Reconciliation of Gross Profit (Loss) to Medical Margin](index=7&type=section&id=RECONCILIATION%20OF%20GROSS%20PROFIT%20%28LOSS%29%20TO%20MEDICAL%20MARGIN) Q1 2025 GAAP gross profit of **$1.2 million** was reconciled to a non-GAAP medical margin of **$17.2 million** by adjusting for other patient service revenue and medical expenses Gross Profit to Medical Margin Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross profit (loss) | $1,182 | $6,431 | | Adjustments | $16,018 | $30,121 | | **Medical margin** | **$17,200** | **$36,552** | [Reconciliation of Total Operating Expense to Adjusted Operating Expense](index=8&type=section&id=RECONCILIATION%20OF%20TOTAL%20OPERATING%20EXPENSE%20TO%20ADJUSTED%20OPERATING%20EXPENSE) Q1 2025 total operating expense of **$411.3 million** was reconciled to an adjusted operating expense of **$23.4 million**, excluding medical expenses and depreciation to show core corporate overhead Adjusted Operating Expense Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total operating expense | $411,313 | $432,319 | | Medical expense | $(372,043) | $(382,057) | | Depreciation and amortization | $(21,052) | $(21,539) | | Other adjustments | $5,216 | $(2,501) | | **Adjusted operating expense** | **$23,434** | **$26,222** | [Supplementary Information](index=2&type=section&id=Supplementary%20Information) [Conference Call and Webcast Information](index=2&type=section&id=Conference%20Call%20and%20Webcast%20Information) A conference call and webcast to discuss Q1 2025 financial results is scheduled for May 15, 2025, at 4:30 PM ET - A conference call and webcast to discuss Q1 2025 results is scheduled for May 15, 2025, at **4:30 PM ET**[9](index=9&type=chunk)[10](index=10&type=chunk) [About P3 Health Partners](index=2&type=section&id=About%20P3%20Health%20Partners) P3 Health Partners is a physician-led population health management company operating a network of over **2,800** affiliated primary care providers across five states, focused on value-based care - P3 is a physician-led population health management company with a network of over **2,800** affiliated primary care providers across five states[11](index=11&type=chunk) [Non-GAAP Financial Measures & Key Performance Metrics](index=2&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Key%20Performance%20Metrics) This section defines non-GAAP financial measures like Adjusted EBITDA and medical margin, along with the key performance metric 'at-risk members,' to aid in evaluating operating results - The report uses non-GAAP measures such as Adjusted EBITDA, medical margin, and adjusted operating expense to provide additional tools for investors to evaluate operating results[12](index=12&type=chunk) - The key performance metric 'at-risk members' is defined as the approximate number of Medicare members for whom the company receives a fixed percentage of premium under capitation arrangements[13](index=13&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section contains a standard safe harbor statement, indicating that forward-looking statements are subject to significant risks and uncertainties detailed in the company's SEC filings - The press release contains forward-looking statements that are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially[14](index=14&type=chunk) - Important risks are detailed in the company's Annual Report on Form 10-K and subsequent SEC filings[15](index=15&type=chunk)

Company Overview - P3 Health Partners Inc. (PIII) shares increased by 8.9% to close at $9.79, supported by high trading volume, contrasting with a 5% gain over the past four weeks [1] - The company reported fourth quarter revenue of $371 million, marking a 7% year-over-year increase, and reaffirmed its 2025 revenue guidance of $1.35 billion to $1.5 billion, with expectations of achieving profitability this year [2] Earnings Expectations - The upcoming report for P3 Health Partners is expected to show a quarterly loss of $5 per share, reflecting a year-over-year change of -3025%, with revenues anticipated at $363.75 million, down 6.4% from the previous year [3] - The consensus EPS estimate for the quarter has been revised 14.3% lower over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] Industry Context - P3 Health Partners operates within the Zacks Medical Info Systems industry, where another company, Pulmonx Corporation (LUNG), experienced a 9.1% decline in its stock price, closing at $4.92, and has returned -30.6% over the past month [4] - Pulmonx's consensus EPS estimate for the upcoming report remains unchanged at -$0.37, representing a -2.8% change from the previous year, and it currently holds a Zacks Rank of 3 (Hold) [5]

Medicare Market Overview - P3 Health Partners operates in the $1,029.8 billion Medicare market, covering approximately 68 million eligible lives as of November 2024[34]. - The Medicare Advantage (MA) market constitutes about 54% of the overall Medicare market, with nearly 33 million Medicare eligible lives in 2024[34]. - The penetration of MA plans among Medicare beneficiaries increased from 19% in 2007 to 54% in 2024, projected to reach 64% by 2034[43]. - The total addressable market for P3 is approximately 68 million Americans enrolled in traditional Medicare or MA, representing $1,030 billion of annual spend[46]. - The core addressable market for P3 is estimated to be over $300 billion, based on approximately 33 million Medicare Advantage members with an average spend of $1,000 per member per month[46]. Revenue and Financial Performance - Contracts with four health plans accounted for approximately 59% and 60% of P3's capitated revenue for the years ended December 31, 2024 and 2023, respectively[35]. - For the year ended December 31, 2024, the company incurred net losses of $310.4 million, resulting in an accumulated deficit of $503.2 million[128]. - The company expects to continue incurring operating losses and generating negative cash flows for the foreseeable future, indicating a need for additional funding in 2025[125]. - The company has issued an aggregate of 110.8 million shares of Class A common stock and warrants since December 2022, which may dilute ownership interests[132]. - The company is exploring raising additional capital through debt financing and equity issuances due to substantial doubt about its ability to continue as a going concern[126]. Operational Strategy and Growth - The company aims to expand its footprint in current markets like Arizona, California, Nevada, and Oregon, leveraging existing relationships with payors to increase membership[68]. - The company is focused on executing accretive acquisitions to grow its membership base, despite previous growth being primarily organic[71]. - The company maintains a disciplined growth strategy, periodically reviewing provider and payor contracts to exit underperforming ones and rationalize network costs[65]. - Future growth depends on the successful integration of new physician partners and expansion into new geographies, which may involve significant challenges[150]. Compliance and Regulatory Environment - The company operates under extensive regulatory requirements, including obtaining necessary licenses and maintaining compliance with federal and state regulations[88]. - P3's credentialing program ensures compliance with CMS and NCQA requirements, with providers recredentialed every three years[89]. - Non-compliance with healthcare laws could lead to significant penalties, including civil and criminal penalties, and loss of provider licenses[94]. - The Affordable Care Act has significantly changed healthcare financing, promoting the establishment of Accountable Care Organizations (ACOs) to improve care coordination[107]. - Compliance with data privacy and security laws is critical, with potential penalties for violations[112]. Risks and Challenges - The company faces risks related to competition for qualified personnel, particularly in healthcare, which may hinder growth initiatives[149]. - The company may incur significant losses if healthcare service expenses exceed the revenue received from payors under capitation contracts[171]. - The company faces increasing competition from various entities, including Oak Street Health, Astrana Health, and agilon health, which may impact market share and profitability[175]. - Changes in government regulations or private initiatives affecting healthcare delivery could adversely impact the company's revenue[182]. - The company is exposed to risks from competitive developments, including pricing changes and the introduction of new products by competitors[213]. Technology and Innovation - The proprietary P3 Technology/Health Hub integrates clinical and claims data monthly from various sources, allowing for risk stratification and proactive care delivery[58]. - The Provider Portal enables physicians to access risk stratified patient lists and identify care opportunities, improving cost management and patient outcomes[59]. - The Analytic Management Tools platform provides real-time metrics and visualizations to support decision-making and optimize resource utilization across the organization[62]. - The company utilizes AI technologies, which are subject to evolving regulatory frameworks that may impact operations and increase compliance costs[202]. Employee and Talent Management - As of December 31, 2024, the company had approximately 360 full-time employees, with a focus on attracting and retaining skilled talent[83]. - High employee turnover and labor shortages were experienced in 2024, affecting the ability to hire qualified personnel[147]. Financial Liabilities and Assets - As of December 31, 2024, the company had $38.8 million in unrestricted cash and cash equivalents, $154.8 million in outstanding indebtedness, and $255.1 million in unpaid claims[125]. - The net carrying value of other intangible assets was $574.4 million, representing 73% of total assets[142]. - A significant goodwill impairment charge of $1,315.0 million was recorded for the year ended December 31, 2022, due to a decrease in share price[142]. Legal and Audit Risks - The company is subject to various legal proceedings and audits that could result in substantial costs and divert management's attention, adversely affecting its financial condition[206]. - The company may be required to refund amounts received from Medicare or Medicaid as a result of adverse audit findings, which could materially affect its operating results[225]. - Regulatory authorities may assert that the company's arrangements with affiliated entities constitute unlawful practices, necessitating restructuring or termination of these relationships[223].

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].

P3 Health Partners (PIII) Q4 2024 Earnings Call March 27, 2025 04:30 PM ET Company Participants Ryan Halsted - Managing DirectorAric Coffman - CEOLeif Pedersen - Chief Financial OfficerAmir Bacchus - Co-Founder and Chief Medical OfficerAaron Wukmir - Healthcare Equity Research AssociateJoshua Raskin - Partner - Managed Care & ProvidersDavid Larsen - Managing Director Conference Call Participants Ryan Langston - Director & Senior Analyst - Healthcare ResearchJack Sampson - Analyst Operator Good day and welco ...

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].