Financial Data and Key Metrics Changes - Health plan membership reached 229,600 members, reflecting a growth of approximately 26% year over year [4][12] - Total revenue for Q3 2025 was $994 million, an increase of approximately 44% year over year [4][12] - Adjusted gross profit was $127 million, up 58% year over year, resulting in a consolidated Medical Benefit Ratio (MBR) of 87.2%, an improvement of 120 basis points [4][12] - Adjusted SG&A ratio improved to 9.6%, also an improvement of 120 basis points year over year [4][12] - Adjusted EBITDA was $32 million, representing a margin of 3.3% and a 240 basis points expansion compared to Q3 2024 [14] Business Line Data and Key Metrics Changes - Inpatient admissions per thousand were in the low 140s, indicating effective risk management in Medicare Advantage [5][12] - Part D performance modestly outperformed expectations, with growth in utilization trends moderating sequentially [12] Market Data and Key Metrics Changes - 100% of health plan members are in plans rated four stars or above for rating year 2026, compared to a national average of approximately 63% [6][8] - The California HMO contract achieved a four-star rating for the ninth consecutive year, while competitors in the state have about 70% of members in plans rated four stars or higher [6][8] Company Strategy and Development Direction - The company is focused on investments in back office automation, clinical engagement, AVA AI clinical stratification, and STARS durability to differentiate from competitors [5][10] - The strategy for 2026 includes a balanced approach to membership growth and profitability, with expectations of at least 20% year-over-year growth [10][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to manage care effectively, which is crucial in a tightening reimbursement environment [76] - The company is well-positioned for growth despite industry disruptions and anticipates continued strong performance in 2026 [10][76] Other Important Information - The company raised its full-year guidance for adjusted EBITDA to $94 million at the midpoint, up from an initial guidance of $47.5 million [6][15] - Cash and cash equivalents at the end of Q3 were $644 million, positively impacted by the timing of medical expense payments [14] Q&A Session Summary Question: Insights on growth for 2026 and market share opportunities - Management is pleased with growth across California and other states, emphasizing strong provider networks and product mix [20][21] Question: Considerations for M&A or partnerships - The company is discerning in evaluating tuck-in opportunities for supplemental benefits, focusing on margin improvement with minimal execution risk [23][25] Question: Status of risk sharing with physicians in California - Approximately 65% to 70% of the business is in shared risk arrangements, with expectations for more shared risk in the future [28][29] Question: SG&A reinvestment details - SG&A was favorable in Q3, with investments aimed at automation and efficiency improvements across the organization [32][33] Question: Clarification on star ratings and underlying performance - The overall raw star rating score improved significantly, with management confident in the quality of care provided [36][38] Question: Brand investment strategy - The company is establishing a brand to reflect its commitment to quality Medicare Advantage services, aiming to change perceptions of MA [40][42] Question: Retention versus new member acquisition for 2026 - Both gross ads and retention rates are strong, with investments in member experience yielding positive results [45][46] Question: Management of Part D redesign - The company has maintained stability in benefits and is well-prepared for the competitive landscape in Part D [48][49] Question: Future competitive environment and market expansion - The company plans to explore new markets while ensuring that care management capabilities remain strong [80]