P3 Health Partners(US:PIII)2025-11-13 23:16Financial Performance - Total operating revenue for Q3 2025 was $345.3 million, a decrease of 4.8% from $362.1 million in Q3 2024[22] - Capitated revenue for Q3 2025 was $341.6 million, down 4.5% from $357.7 million in Q3 2024[22] - Net loss for Q3 2025 was $69.5 million, compared to a net loss of $102.9 million in Q3 2024, representing a 32.5% improvement[22] - Operating loss for Q3 2025 was $44.2 million, an improvement from an operating loss of $107.0 million in Q3 2024[22] - The company reported a basic net loss per share of $9.67 for Q3 2025, compared to $14.36 for Q3 2024[22] - For the nine months ended September 30, 2025, the company reported a net loss of $157.4 million, an improvement from a net loss of $181.2 million for the same period in 2024, representing a decrease of approximately 13.1%[38] - The company recorded a net loss of $37,874 thousand for the quarter ending September 30, 2025, compared to a net loss of $23,303 thousand for the quarter ending June 30, 2025[27] - The company has experienced losses since inception, with a net loss of $69.5 million for the three months ended September 30, 2025, compared to $102.9 million for the same period in 2024[38] Assets and Liabilities - Total current assets decreased to $135.6 million as of September 30, 2025, from $184.1 million as of December 31, 2024, a decline of 26.3%[19] - Total liabilities increased to $664.6 million as of September 30, 2025, compared to $633.9 million as of December 31, 2024, an increase of 4.8%[19] - The accumulated deficit increased to $575.6 million as of September 30, 2025, from $503.2 million as of December 31, 2024[19] - Total assets decreased to $683.6 million as of September 30, 2025, from $783.4 million as of December 31, 2024, a decline of 12.7%[19] - The total stockholders' equity as of September 30, 2025, was reported at $(18,686) thousand, indicating a deficit situation[27] - The company reported a working capital deficit of $288.3 million as of September 30, 2025, highlighting significant liquidity challenges[39] Revenue and Membership - Total revenue for the three months ended September 30, 2025, was $345,253,000, a decrease of 4.7% from $362,124,000 in the same period of 2024[52] - Capitated revenue accounted for 98.9% of total revenue in Q3 2025, totaling $341,555,000, compared to 98.8% or $357,706,000 in Q3 2024[52] - For the nine months ended September 30, 2025, total revenue was $1,074,266,000, down 4.9% from $1,129,769,000 in the same period of 2024[52] - Average at-risk membership decreased to 115,900 in Q3 2025 from 128,400 in Q3 2024, representing a decline of 9.7%[149] - The company operates in the $1,030 billion Medicare market, focusing on the Medicare Advantage (MA) segment, which comprises approximately 51% of the overall market, equating to nearly 35 million eligible lives in 2025[110] - As of September 30, 2025, the company has expanded its primary care physician (PCP) network to approximately 2,700 physicians across 24 markets, serving around 116,000 at-risk members[113] Expenses and Cost Management - Medical claims expense for Q3 2025 was $337.143 million, down from $357.166 million in Q3 2024, reflecting a decrease of 5.6%[87] - Medical expenses represent 92% of the total operating expenses for the nine months ended September 30, 2025, highlighting the importance of managing healthcare costs effectively[128] - The company expects its corporate general and administrative expenses to decrease as a percentage of revenue over time as membership grows and operational efficiencies are realized[130] - Medical expenses for Q3 2025 were $369.8 million, a decrease of $32.1 million, or 8%, compared to $401.9 million in Q3 2024, driven by a reduction in at-risk members[175] Financing and Capital Structure - The company is exploring raising additional capital through a combination of debt financing and equity issuances to support future operations[39] - Long-term debt increased to $312.2 million as of September 30, 2025, compared to $198.0 million on December 31, 2024, representing a 57.5% increase[66] - The net long-term debt after accounting for unamortized costs is $214.2 million, up from $108.9 million, indicating a 96.5% increase year-over-year[66] - The company raised $30.0 million through the VGS 4 Promissory Note, with a first tranche of $15.0 million drawn on February 18, 2025, and a second tranche of $15.0 million drawn on March 14, 2025[188] - The VGS 4 Promissory Note has an interest rate of 19.5% per annum, with interest payable quarterly starting March 31, 2025[188] - The company also entered into the VGS 5 Promissory Note, providing for funding of up to $70.0 million, with the first tranche of $15.0 million drawn on May 29, 2025[193] Operational Challenges and Future Outlook - The company expects to continue incurring net losses and negative cash flows from operating activities in accordance with its operating plan[209] - The company has substantial doubt about its ability to continue as a going concern within one year from the issuance of its financial statements[209] - The company recorded a premium deficiency reserve adjustment of $(36.7) million for the nine months ended September 30, 2025, compared to a reserve of $15.8 million for the same period in 2024[38] - The company anticipates that PMPM revenue will improve as it better understands and assesses the health status of its members through its care model[127]