Core Viewpoint - Oscar Health Inc. is experiencing a decline in stock price despite a year-to-date gain of approximately 15%, attributed to a recent partnership with Hy-Vee to launch a new employer health insurance plan [1][5]. Group 1: Company Developments - Oscar Health announced a partnership with Hy-Vee to introduce "Hy-Vee Health with Oscar," an employer health insurance plan aimed at covering 400,000 local employees in Des Moines, Iowa, starting November 1, 2025 [1]. - The new insurance plan is expected to save businesses 20% to 30% and employees between $500 to $1,000 annually [2]. - Oscar Health reported second-quarter revenue of approximately $2.86 billion, an increase from $2.2 billion year-over-year, but fell short of the consensus estimate of $2.91 billion [3]. Group 2: Financial Performance - The company reported a loss of 89 cents per share for the second quarter, missing the consensus estimate of 86 cents [3]. - The medical loss ratio for the second quarter of 2025 was 91.1%, up from 79.0% in the same quarter of 2024, primarily due to increased market morbidity [4]. - Oscar Health reaffirmed its fiscal 2025 sales guidance of $12 billion to $12.2 billion, exceeding Wall Street's estimate of $11.32 billion, and expects a medical loss ratio of 86% to 87% for 2025 [4]. Group 3: Market Sentiment - The health insurance sector received a positive sentiment boost following investments from notable investors like Michael Burry and Warren Buffett in UnitedHealth Group, benefiting peers such as Oscar Health [5].

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $96 million, down from $192.1 million in Q1 2024, primarily due to the decline in the government vertical, especially in migrant-related projects [18] - The company recorded a net loss of $11.1 million in Q1 2025 compared to a net income of $10.6 million in Q1 2024, reflecting the drop in revenues [19] - Adjusted EBITDA for Q1 2025 was a loss of $3.9 million, down from adjusted EBITDA of $24.1 million in Q1 2024 [20] - SG&A as a percentage of total revenues was 46.7% in Q1 2025, compared to 26.8% in Q1 2024, indicating a significant increase due to the decline in migrant revenues [23] Business Line Data and Key Metrics Changes - Mobile health revenue for Q1 2025 was $45.2 million, down from $143.9 million in Q1 2024, driven by the anticipated wind down of migrant revenues [19] - Medical transportation services revenue increased to $50.8 million in Q1 2025 from $48.2 million in Q1 2024, supported by growth in several markets [19] - The medical transportation business is expected to generate $225 million in revenue for 2025, while the payer and provider business is projected to generate $50 million [17] Market Data and Key Metrics Changes - The company has seen growth in medical transportation services in markets including Delaware, Tennessee, Pennsylvania, New Jersey, Wisconsin, Upstate New York, and the UK [19] - The payer and provider vertical has exceeded 900,000 assigned lives, up from 700,000 just a quarter ago, indicating strong demand [10] Company Strategy and Development Direction - The company has removed its government population health vertical from its 2025 guidance due to ongoing policy changes and budget cuts, leading to substantial uncertainty [5][7] - The focus is on building the company around innovative solutions for payers, providers, and health systems, particularly in mobile health and medical transportation [8] - The company is undertaking cost-cutting measures while investing in growing segments, aiming for positive adjusted EBITDA in 2026 [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of the medical transportation and payer/provider verticals despite the challenges in the government sector [8][17] - The anticipated adjusted EBITDA loss for 2025 is primarily due to elevated SG&A levels during the transition period [15] - Management highlighted the importance of patient satisfaction and the positive impact of their services on healthcare outcomes, which is expected to drive future growth [40][70] Other Important Information - The company plans to report any significant non-migrant municipal work as upside revenue in future quarters [17] - The balance sheet remains healthy, with expectations of positive cash flow from operations despite projected losses [16][25] - The company has initiated a stock buyback program, repurchasing nearly 2 million shares for approximately $5.8 million [26] Q&A Session Summary Question: What is the expected government revenue for the remainder of the year? - Management clarified that government population health revenues have been removed from guidance, and any new deployments will be reported separately as upside [30][31] Question: How is the payer business performing? - The payer business is experiencing healthy demand, with plans focused on reducing medical loss ratios and improving quality metrics [38][40] Question: What caused the revenue miss in Q1? - The revenue miss was attributed to the government vertical, with delays in contract launches and RFP responses impacting expected revenues [46][51] Question: What is the margin profile of the migrant-related revenue? - The margin for the migrant program was about 34%, consistent with previous quarters, while the non-migrant mobile health segment had higher margins [75] Question: Are there risks from tariffs on medical equipment? - Management indicated that tariffs could impact the cost of maintaining the fleet and procuring new vehicles, but they are well-positioned to manage these costs [77][78]