Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenue of $1.44 billion, a slight decrease from $1.45 billion in Q3 2024. The medical margin was negative $57 million, compared to negative $58 million in the same period last year. Adjusted EBITDA was negative $91 million, an improvement from negative $96 million in Q3 2024 [4][17][19] - The company reinitiated its 2025 guidance, expecting revenue between $5.81 billion and $5.83 billion, with a medical margin projected between negative $5 million and negative $15 million, and adjusted EBITDA guidance ranging from negative $270 million to negative $245 million [6][22][23] Business Line Data and Key Metrics Changes - Medicare Advantage membership at the end of Q3 2025 was 503,000, down from 525,000 in Q3 2024. ACO REACH membership decreased to 115,000 from 132,000 in the same period [17] - The company experienced a negative impact of $20 million from exited markets during the quarter [18] Market Data and Key Metrics Changes - The company noted that the 2025 risk adjustment scores were lower than expected, impacting revenue by approximately $150 million for the full year. This was primarily driven by one payer in a new market [18] - The company expects to end 2025 with approximately $310 million in cash, including about $65 million held off-balance sheet by ACO entities [23][28] Company Strategy and Development Direction - The company is focused on executing strategic initiatives aimed at improving contract economics, reducing risk, and optimizing cost structures. It anticipates a $30 million reduction in operating expenses for 2026 [16][24] - The company is taking a disciplined approach to payer contracting, which includes reducing Part D exposure and enhancing quality incentives [9][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, citing several tailwinds such as a 9% benchmark rate increase and better-aligned payer contracts. They believe these factors will drive material improvement in performance [24][25] - The leadership team is actively engaged in improving performance and is committed to enhancing Agilon's position for sustainable value creation [15][29] Other Important Information - The company is currently in the process of searching for a new CEO, with a focus on candidates who align with the company's new strategic direction [15][36] - The company plans to pursue a reverse stock split and seek stockholder approval at the annual general meeting in 2026 [28] Q&A Session Summary Question: Impact of ACO REACH changes on EBITDA - Management acknowledged that changes to the ACO REACH program would lead to lower economics but still contribute positively to margins. They are reviewing ACOs to determine better models for 2026 [30][31] Question: Potential market exits and payer contracts - Management confirmed a disciplined approach to contracting, indicating that they would not engage with payers if the economics do not make sense. Any reduction in membership would benefit medical margins and EBITDA [32][33] Question: Update on CEO search - The search for a new CEO is ongoing, with good candidates emerging. Management emphasized active engagement in improving business performance during this transition [35][36] Question: Medical cost trends in Q3 - Management noted that inpatient and Part B oncology drug costs remain high, but overall medical cost trends have restated favorably [36] Question: Cash allocation to ACO REACH entities - The company clarified that there is no minimum cash requirement for ACO REACH entities, but maintaining cash there provides tax efficiencies [37] Question: Changes in provider contracts - Management stated that there are no significant changes to provider contracts, but they are aligning incentives with physician partners to achieve operating savings [45][46] Question: Impact of Humana's focus on benefit stability - Management indicated that they analyze benefit designs from all payers, including Humana, as part of their contracting process [52][53]