agilon health(US:AGL)2024-11-07 21:16Membership Growth - Medicare Advantage members reached approximately 525,200 as of September 30, 2024, representing a 37% increase from 384,200 members on September 30, 2023[94] - Average Medicare Advantage membership during the third quarter of 2024 was 535,400[97] Revenue Performance - Total revenue for the third quarter of 2024 was $1.5 billion, a 28% increase from $1.2 billion in the third quarter of 2023[94] - Year-to-date total revenue as of September 30, 2024, was $4.5 billion, reflecting a 39% increase from $3.2 billion in 2023[95] - Medical services revenue for the third quarter of 2024 was $1.45 billion, up 28% from $1.13 billion in the third quarter of 2023[99] - Medical services revenue for the three months ended September 30, 2024, was $1,447,697, an increase from $1,133,457 in the same period of 2023, representing a growth of approximately 28%[123] - Total revenues for the nine months ended September 30, 2024, reached $4,538,044, compared to $3,260,290 for the same period in 2023, reflecting a year-over-year increase of about 39%[123] - For the nine months ended September 30, 2024, medical services revenue rose by $1,274.7 million, or 39%, to $4,528.5 million, attributed to a 39% increase in average membership and revenue from new geographies[128] Profitability and Losses - Gross profit for the third quarter of 2024 was negative $64 million, compared to a positive $37 million in the same quarter of 2023[94] - The net loss for the third quarter of 2024 was $118 million, compared to a net loss of $31 million in the third quarter of 2023[94] - Adjusted EBITDA loss for the third quarter of 2024 was $96 million, compared to earnings of $6 million in the third quarter of 2023[94] - Medical margin loss for the third quarter of 2024 was $(58) million, compared to earnings of $111 million in the third quarter of 2023[94] - The company's net loss for the three months ended September 30, 2024, was $117,615, compared to a net loss of $31,483 for the same period in 2023, representing a deterioration in performance[123] - Medical margin for the nine months ended September 30, 2024, was $(204,619) thousand, compared to $400,544 thousand for the same period in 2023, indicating a substantial decline[149] - Adjusted EBITDA for the nine months ended September 30, 2024, was $(70,245) thousand, compared to $42,060 thousand for the same period in 2023, reflecting a negative shift in operational performance[151] Expenses - Medical services expense for the three months ended September 30, 2024, was $1,505,950, up from $1,022,871 in the prior year, indicating a rise of approximately 47%[123] - Medical services expense for the three months ended September 30, 2024, increased by $483.1 million, or 47%, to $1,506.0 million, primarily due to a 38% growth in average membership and a 7% increase in average medical services expense per member[129] - For the nine months ended September 30, 2024, medical services expense increased by $1,470.6 million, or 52%, to $4,323.9 million, driven by a 39% growth in average membership and a 9% increase in average medical services expense per member[130] - Other medical expenses for the three months ended September 30, 2024, were $9,149, significantly lower than $77,153 in the same period of 2023, indicating a decrease of approximately 88%[123] - General and administrative expenses for the three months ended September 30, 2024, totaled $63,123, down from $72,058 in the same period of 2023[123] - General and administrative expenses decreased by $8.9 million, or 12%, for the three months ended September 30, 2024, with operating costs to support live geographies remaining relatively flat[134] Cash Flow and Financing - Cash and cash equivalents, along with restricted cash and equivalents, totaled $153.8 million as of September 30, 2024, with investments in marketable securities amounting to $244.8 million[152] - Net cash used in operating activities was $(74,196) thousand for the nine months ended September 30, 2024, a decrease of $20,837 thousand compared to $(95,033) thousand for the same period in 2023[161] - Net cash provided by investing activities was $116,218 thousand for the nine months ended September 30, 2024, a significant increase compared to net cash used of $(41,816) thousand for the same period in 2023[162] - Net cash used in financing activities was $(2,561) thousand for the nine months ended September 30, 2024, a notable decrease from $(192,288) thousand for the same period in 2023, primarily due to share repurchases in the prior year[163] - The company expects to continue incurring operating losses and generating negative cash flows from operations due to ongoing investments in business expansion and increased administrative costs[153] - The company may require additional financing in the future to fund working capital and pay obligations, which could lead to dilution of existing stockholders' interests if raised through equity offerings[156] Debt and Interest Rates - The maturity date of the Credit Facility was extended to February 18, 2026, with a maximum issuance capacity of $100.0 million for standby letters of credit[165] - The Secured Overnight Financing Rate (SOFR) was adopted as the benchmark interest rate, with SOFR Rate Loans bearing interest at 3.50% plus the higher of SOFR or 0%[166] - The company pays a commitment fee of 0.375% on the unfunded 2021 Revolving Credit Facility amount[166] - The Credit Facility includes covenants that limit restricted payments, require minimum financial ratios, and restrict additional borrowings based on financial ratios[167] - A hypothetical 100 basis point change in interest rates would not have a material impact on the company's interest expense[173] Investment and Market Risks - The company does not use derivative financial instruments for speculative or trading purposes, exposing it to market risks primarily from interest rate changes[171] - The investment policy focuses on liquidity and capital preservation, avoiding investments for trading or speculative purposes[174] Other Financial Information - Income from equity method investments decreased by $12.6 million, or 86%, for the three months ended September 30, 2024, primarily due to increased operating expenses[136] - Other income (expense), net increased by $10.6 million, or 196%, for the three months ended September 30, 2024, primarily from income related to services rendered to CMS ACO Models investments[138] - Total discontinued operations for the three months ended September 30, 2024, improved by $8.3 million, or 87%, compared to the same period in 2023, related to obligations from Hawaii operations[141] - Total discontinued operations for the nine months ended September 30, 2024, amounted to $(10,464) thousand, a significant increase of 149% compared to $(4,205) thousand for the same period in 2023, primarily due to obligations from Hawaii operations[142] - There have been no significant changes to the company's critical accounting policies during 2024[169]