Financial Data and Key Metrics Changes - The company reported third quarter revenue of $137 million, a 23% increase compared to the previous year, driven by a 42% growth in the pharmacy business and a 13% growth in the fee-for-service business [4][14] - Adjusted EBITDA loss improved to $3.5 million, a $4.7 million improvement year-over-year, with expectations to achieve profitability in Q4 and become free cash flow positive in 2026 [5][20] - Total revenue for Q3 was $136.6 million, representing a 36.7% year-over-year growth [14] Business Line Data and Key Metrics Changes - Patient services revenue, including capitation and fee-for-service, totaled $60.2 million, accounting for 44.1% of total revenue, with a 21% year-over-year increase [15] - Pharmacy revenue reached $75.9 million, representing 55.6% of total revenue, and increased 57.4% year-over-year due to higher prescription volumes [16] Market Data and Key Metrics Changes - The company expanded its MSO network in Florida to over 200 providers and opened a new pharmacy location to serve network providers [6] - New capitation contracts signed in 2025 are expected to contribute an estimated $19 million in full-year revenue, a 29% increase compared to 2024 [6] Company Strategy and Development Direction - The company is focusing on expanding its delegated capitation model, particularly in Florida, which is expected to become its primary model across all markets [12][13] - The integration of AI into operations is anticipated to enhance performance and reduce costs, with significant operational efficiencies expected from the new AI model [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving adjusted EBITDA profitability in Q4 and highlighted the strong momentum built over the past year [10][20] - The company is optimistic about the impact of recent healthcare policy changes, believing they will lower drug costs and enhance accessibility [40][41] Other Important Information - A cybersecurity incident at a key vendor temporarily affected billing for fee-for-service claims, but the company managed to minimize operational disruptions [9][10] - The company ended the quarter with $27.7 million in cash and cash equivalents, with $86 million of convertible debt outstanding [18] Q&A Session Summary Question: Can you describe the reserve for fee-for-service revenue? - The reserve was a $1.8 million adjustment that impacted adjusted EBITDA, but normalized performance was significantly better [24][26] Question: How sustainable is the first month of profitability in September? - The company expects to achieve break-even EBITDA in Q4 and anticipates positive adjusted EBITDA in 2026 [28][29] Question: What is the current PM/PM trend on new contracts? - PM/PM is dependent on market location, with most contracts having escalators for annual increases [42] Question: How will changes in payer behavior impact the business? - The overall trend towards lower-cost drugs and simplified reimbursement processes is expected to be net favorable for the company [40][41] Question: What is the outlook for new contracts and covered lives? - The company continues to see strong interest in its model and expects top-line growth to mirror previous years, with no slowdown in value-based contracting opportunities [48][49]