P3 Health Partners(PIII) - 2025 Q1 - Quarterly Results

P3 Health Partners First Quarter 2025 Financial Results Management Commentary 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] - P3 has identified additional value creation opportunities through enhanced complex care programs and payment integrity initiatives[3] - The company is making targeted investments in technology infrastructure and innovative clinical programs to drive long-term value[3] First Quarter 2025 Financial & Operational Highlights 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] - 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] Fiscal 2025 Guidance 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] Financial Statements Condensed Consolidated Balance Sheets 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 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 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 Reconciliation of Net Loss to Adjusted EBITDA Loss 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 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 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 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 Conference Call and Webcast Information 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][10] About P3 Health Partners 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] Non-GAAP Financial Measures & Key Performance Metrics 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] - 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] Cautionary Note Regarding Forward-Looking Statements 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] - Important risks are detailed in the company's Annual Report on Form 10-K and subsequent SEC filings[15]