Financial Data and Key Metrics Changes - For 2025, the company reported an Adjusted EBITDA loss of $161.3 million, with a normalized Adjusted EBITDA loss of $149.1 million, reflecting a $44 million improvement over 2024 [14][17] - Total revenue for Q4 2025 was $384.8 million, up from $370.7 million in Q4 2024, while full-year revenue was $1.46 billion, down from $1.50 billion in 2024 [14][15] - Capitated revenue per member per month (PMPM) improved by 9% to $1,060 in Q4 2025 and by 5% to $1,026 for the full year [14][15] Business Line Data and Key Metrics Changes - The medical margin for Q4 2025 was -$28.7 million, compared to $7.3 million in Q4 2024, while the full-year medical margin was $23.5 million, down from $85.4 million in 2024 [15][16] - The company achieved Four-Star status across 70% of its priority Medicare Advantage plans, indicating improved quality performance [8] Market Data and Key Metrics Changes - The company announced a partnership that expands its presence into a new Medicare Advantage geography, adding 29,000 new members, which represents a 25% year-over-year growth [9] - Total lives under management in 2026 are expected to reach approximately 140,000 members, contributing roughly $27 million in revenue [9] Company Strategy and Development Direction - The company is focused on smart growth, entering new geographies through a phased glide path to risk, which allows for operational execution before assuming full risk [9][10] - Structural and operational improvement opportunities totaling $170 million have been identified, with 75% expected from contracting and revenue-related actions [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a midpoint Adjusted EBITDA of $10 million for 2026, representing a significant improvement from 2025 [5][18] - The company aims to continue improving its cost structure while targeting investments in frontline operations to support clinical performance and medical cost stability [20] Other Important Information - The company ended 2025 with $25 million in cash and is focused on disciplined working capital management [18] - The company has made strides in improving its underlying cost structure and is committed to maintaining a disciplined operating approach [20] Q&A Session Summary Question: Are the 29,000 lives from the Nebraska agreement included in the risk member guidance midpoint of 112,000? - The 29,000 lives are additional and not included in the 112,000 full risk members [25] Question: What kind of standup costs or geo-entry costs are needed for the new geography? - The deal's economics allow for funding to cover stand-up costs, utilizing existing infrastructure [26] Question: How much of the $170 million improvement is run-rated entering the year versus what still needs to be activated in 2026? - About 75% of the $170 million is run-rated starting in January, focusing on revenue and contract updates [28] Question: How will the company interact with the Nebraska plan for the first two years? - There is a two-year glide path to risk, with a contractually set transition to full risk in 2028 [35][36] Question: What tangible examples differentiate the 2026 contracts from 2025? - Changes include adjustments in premium amounts and charges, as well as improvements in Stars performance impacting plan revenue [38][39]

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]