Apollo Medical(AMEH) - 2025 Q3 - Quarterly Report

Financial Performance - Total revenue for the quarter ended September 30, 2025, was $956,048,000, representing a 100% increase from $478,710,000 in the same quarter of 2024[30] - Capitation revenue for the nine months ended September 30, 2025, reached $2,061,451,000, up from $1,239,885,000 in the prior year, indicating a 66.5% year-over-year growth[30] - Operating expenses for the quarter were $936,838,000, compared to $450,285,000 in the same quarter of 2024, which is a 108.0% increase[30] - Income from operations for the quarter was $19,210,000, down from $28,425,000 in the same quarter of 2024, representing a decline of 32.5%[30] - For the three months ended September 30, 2025, net income attributable to Astrana Health, Inc. was $373,000, a decrease of 97.7% compared to $16,094,000 for the same period in 2024[32] - Earnings per share (EPS) for the three months ended September 30, 2025, was $0.01, down from $0.34 in the same period of 2024, reflecting a decline of 97.1%[32] - Net income for the nine months ended September 30, 2025, was $17,514,000, a decrease from $57,709,000 in the same period of 2024[48] - Income before provision for income taxes for the nine months ended September 30, 2025, was $32,100,000, down 61.2% from $82,713,000 in 2024[32] Assets and Liabilities - Total current assets increased to $883,629,000 as of September 30, 2025, compared to $638,496,000 as of December 31, 2024, reflecting a 38.3% increase[23] - Total liabilities rose to $1,682,462,000 as of September 30, 2025, from $840,726,000 as of December 31, 2024, marking a 99.9% increase[25] - Goodwill increased to $863,266,000 as of September 30, 2025, from $419,253,000 as of December 31, 2024, showing a 106.5% increase[23] - Medical liabilities increased to $333,969,000 as of September 30, 2025, from $209,039,000 as of December 31, 2024, indicating a 59.8% rise[25] - The company reported a total stockholders' equity of $775,543,000 as of September 30, 2025, compared to $712,720,000 as of December 31, 2024, which is an 8.8% increase[27] Cash Flow and Investments - Net cash provided by operating activities increased to $117,483,000 in 2025 from $63,146,000 in 2024, reflecting a significant improvement[48] - Cash flows used in investing activities totaled $(537,942,000) in 2025, compared to $(159,071,000) in 2024, indicating increased investment activity[48] - Cash and cash equivalents at the end of the period rose to $464,326,000 in 2025 from $348,640,000 in 2024, marking a substantial increase[50] - The company paid $4,728,000 in income taxes during the nine months ended September 30, 2025, down from $38,270,000 in 2024[50] - Borrowings on long-term debt amounted to $1,119,300,000 in 2025, a significant increase from $171,875,000 in 2024[48] Acquisitions and Strategic Growth - The company anticipates continued growth in capitation revenue and plans to explore strategic acquisitions to enhance market presence[19] - The Company acquired Prospect Medical Holdings, Inc. for a total purchase price of $674.9 million, financed through a $707.3 million loan[87] - The acquisition of Prospect is expected to enhance the Company's provider network, enabling access to over 11,000 providers and improving care delivery across various insurance lines[86] - The company completed the acquisition of Collaborative Health Systems (CHS) for a total consideration of $47.5 million, which included $35.3 million in cash and contingent consideration valued at $5.2 million[98] - The acquisition of Advanced Health Management Systems (AHMS) was finalized for $60.9 million, with $63.9 million paid in cash at closing[99] Debt and Financing - As of September 30, 2025, the total debt of the Company was $1,064,209,000, a significant increase from $438,107,000 as of December 31, 2024[117] - The Company has future debt commitments totaling $1,064,209,000, with the largest portion due in 2029 amounting to $89,746,000[118] - The Company drew down $707.3 million from a delayed draw term loan to finance the Prospect acquisition, resulting in total term loans of $942.2 million[120] - The average effective interest rate on the Company's total debt decreased to 6.33% for the nine months ended September 30, 2025, down from 7.08% for the same period in 2024[128] Stock and Compensation - The company issued shares for the Employee Stock Purchase Plan (ESPP) totaling 10,683 shares, generating $301,000 in additional paid-in capital[36] - Share-based compensation expenses increased to $27,219,000 in 2025 from $19,301,000 in 2024, reflecting higher compensation costs[48] - The Company repurchased 300,000 shares of its common stock for approximately $10.6 million during the nine months ended September 30, 2025[132] Tax and Regulatory Matters - The Company's effective income tax rate for the nine months ended September 30, 2025, was 45.4%, compared to 30.2% for the same period in 2024[158] - The Company expects the One Big Beautiful Bill Act to reduce federal and state income tax payables in the current year[161] Operational Metrics - Major payers contributed 22.4% and 28.3% of net revenue for the three and nine months ended September 30, 2025, respectively[77] - The Company maintains reserves for potential credit losses on receivables, regularly analyzing historical bad debts and customer creditworthiness[72] - The Company recognized income from equity method investments of $1.0 million for the three months ended September 30, 2025, down from $1.4 million in the same period of 2024[108]