Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $373 million, a 4% decrease from the prior year, primarily due to a decrease in membership [12][17] - Membership decreased by 8% year over year, aligning with the company's strategy to exit unprofitable plans [16][12] - Per member funding increased by 8% to $10.63 on a PMPM basis compared to the full year 2024, reflecting improved disease burden capture [12][17] - Adjusted operating expenses decreased by 18% sequentially and 11% year over year, indicating effective cost management [8][18] - Adjusted EBITDA for Q1 was a loss of $22 million, with a normalized loss of $13 million after accounting for a single underperforming contract [18][19] Business Line Data and Key Metrics Changes - The ACO reach population now accounts for approximately 15% of total membership, with a 60% increase in ACO membership over the past year [16][13] - The complex care program is projected to deliver over $30 million in savings for 2025 through improved care coordination [11][25] - Medical margin for Q1 was approximately $17 million or $49 PMPM, down from $37 million or $96 PMPM in Q1 2024 [17] Market Data and Key Metrics Changes - Three of the four markets achieved breakeven or better in Q1, with expectations for continued improvement [6][28] - Increased funding across markets by 8% on a PMPM basis indicates better disease burden capture [7][29] - The company is experiencing a steady ramp in converting groups into the Tier one category, with Oregon's Tier one enrollment expected to reach 60% by Q3 [11] Company Strategy and Development Direction - The company is executing a $130 million operating improvement plan, with a focus on operational efficiency, contracting, and execution [8][20] - Strategic initiatives are aimed at enhancing care enablement and improving provider engagement [10][24] - The company is actively renegotiating payer contracts to reduce exposure and improve funding [9][48] Management's Comments on Operating Environment and Future Outlook - Management remains confident in meeting full-year targets, citing improvements in operational metrics and payer collaboration [20][28] - The company is seeing positive impacts from benefit design changes, contributing to improved financial performance [29] - Despite industry headwinds, the company is reaffirming its guidance based on positive progress from various initiatives [28] Other Important Information - The company ended the quarter with approximately $40 million in cash, indicating a strong liquidity position [21] - The implementation of the Innovaccer system is on schedule, expected to enhance data infrastructure and analytics capabilities [26] Q&A Session Summary Question: Progress on the $130 million EBITDA initiative - The company achieved about 15% of the OpEx savings in Q1, with more benefits expected in the latter half of the year [34] Question: Engagement and satisfaction trends with the RESTORE program - The engagement strategy is working well, with key providers becoming ambassadors for the program [37] Question: Details on the outlier payer causing issues - The outlier payer accounts for no more than 22% of overall revenue, and the company is collaborating to rectify performance issues [41][42] Question: Trends in Medicare Advantage - The company is seeing improvements in utilization metrics, contrary to some public commentary about worsening trends [55] Question: Performance in the underperforming market - The underperforming market is associated with the outlier payer, but other payers in the same market are performing well [58][59]

Financial Data and Key Metrics Changes - Membership growth from Q4'23 to Q4'24 was 13%, with revenue increasing by 7% to $371 million [11] - Annual revenue for 2024 reached $1.5 billion, representing an 18% year-over-year growth [11][22] - The fourth quarter medical margin was $7 million, a decrease year-over-year due to elevated utilization trends [12] - Adjusted EBITDA for Q4 was a loss of $68 million, impacted by unfavorable out-of-period true-ups [12][25] - Full-year adjusted EBITDA loss was $167.2 million for 2024, compared to a loss of $85.5 million in the prior year [25] Business Line Data and Key Metrics Changes - At-risk membership increased to 123,800, a 14% year-over-year rise [22] - Full-year medical margin decreased by approximately 37% year-over-year to $85.5 million, driven by elevated medical expenses [24] - PMPM (per member per month) capitated revenue increased by 2.5% year-over-year [22] Market Data and Key Metrics Changes - The macro environment in the Medicare sector is improving, with positive trends expected for 2025 [9][10] - The company anticipates a $30 to $35 PMPM incremental medical margin benefit from payer benefit design changes [10] Company Strategy and Development Direction - The company is focused on strengthening its business for near-term profitability and has reaffirmed its 2025 guidance on all metrics except for total members, which is slightly raised [9][11] - A growth strategy emphasizing profitable growth is in place, with expectations to achieve profitability in 2025 [14] - The company is enhancing its leadership team with key hires to support its strategic initiatives [20] Management's Comments on Operating Environment and Future Outlook - Management noted that early indicators for 2025 are showing positive trends, with improvements in benefit design and utilization [10] - The company is optimistic about achieving its targets due to early trends observed in the first few months of the year [14] - Management expressed confidence in the accuracy of data exiting 2024, supporting effective reserve management [26] Other Important Information - The company has made significant investments in field operations for 2025, including the introduction of the P3 Restore program aimed at reducing physician burnout [19] - The company has successfully remediated seven previously identified material weaknesses in internal controls [27] Q&A Session Summary Question: Timing around reaching potential profitability - Management discussed the three major inputs for 2025 guidance, including a 7.5% revenue increase and a $16 PMPM improvement in medical costs [44][46] Question: Expectations for cash in 2025 - The company ended 2024 with $38.8 million in cash, with an additional $15 million received in early January, bringing the total to approximately $54 million [49] Question: Fourth quarter results and deviations from expectations - Management acknowledged that Q4 results were impacted by onetime negative items totaling about $17 million, which should be excluded from total Q4 EBITDA numbers [56] Question: Part D risk management - Management confirmed that about half of the Part D risk has been eliminated, with plans to address the remaining portion by January 1, 2026 [66] Question: Improving trends in utilization - Management noted slight improvements in utilization trends in Q4, with expectations that these trends will continue into Q1 of 2025 [73][75] Question: Seasonal dynamics and macro environment improvements - Management explained that the macro environment is improving due to benefit design changes and expected reductions in utilization [89]