Summary of P3 Health Partners Conference Call Company Overview - **Company**: P3 Health Partners (NasdaqCM: PIII) - **Industry**: Healthcare, specifically focused on Medicare and value-based care for seniors - **Market Presence**: Operating in four states with 120,000 full-risk lives and 2,800 primary care providers (PCPs) [2][3] Core Insights and Arguments - **Market Size**: The Medicare market is valued at $1.1 trillion, with a significant portion transitioning to Medicare Advantage (MA) [3][5] - **Growth Potential**: P3 Health Partners has the potential to care for approximately 2 million seniors without expanding into new geographies, indicating substantial growth opportunities within existing markets [4] - **Business Model**: The company operates on a full-risk model across Medicare Advantage and ACO REACH, aiming for profitability through strategic growth and operational efficiencies [5][6] - **Medicare Advantage Trends**: Enrollment in Medicare Advantage has increased from 35% in 2017 to 54% in 2025, with total enrollment growing from 18 million to 34 million [7][8] - **Cost Management**: The average cost per Medicare beneficiary has decreased from projected $22,000 to $12,000, indicating the effectiveness of value-based care models [9][10] Industry Dynamics - **Consolidation Trends**: The healthcare industry is experiencing consolidation, which may create new partnership opportunities for P3 Health Partners [6] - **Physician Challenges**: There is a noted lack of resources and expertise for physicians transitioning to value-based care, with 50% of physicians experiencing burnout [12][13] - **Patient Access**: Up to 25% of Americans lack access to primary care, highlighting the need for improved healthcare delivery systems [12] Operational Strategies - **Value-Based Care Platform**: P3 Health Partners utilizes a value-based care platform to enhance patient outcomes and streamline operations for providers [14][17] - **Data Utilization**: The company leverages data analytics to improve care management and optimize risk stratification for high-risk patients [15][16] - **Community Integration**: P3 focuses on creating unified care networks that connect patients with community resources and support services [13][23] Financial Performance and Projections - **EBITDA Improvement Plan**: The company has outlined a $130 million EBITDA improvement plan, with $70 million still in progress for 2025 [24][25] - **Future Opportunities**: An additional $120 to $170 million in EBITDA improvement opportunities have been identified for 2026, focusing on operational performance and quality management [25][26] - **Revenue Guidance**: Expected total revenue for 2025 is projected between $1.35 billion and $1.5 billion, with an adjusted EBITDA range of -$69 million to -$39 million [27] Market Challenges - **Oregon Market**: Oregon is currently the only market experiencing losses, with efforts underway to achieve breakeven by 2026 [30][31] - **Membership Trends**: The company anticipates a decline in membership in 2025 but expects growth to resume in 2026 and 2027 [30] Conclusion - P3 Health Partners is positioned to capitalize on the growing demand for value-based care in the Medicare sector, with a clear strategy for operational improvements and market expansion. The company is focused on enhancing patient outcomes while navigating industry challenges and optimizing financial performance.

Financial Data and Key Metrics Changes - Privia Health reported a strong performance in 2024, exceeding guidance metrics across all areas, with implemented providers increasing by 11.2% year over year and fee-for-service collections growing by 13.6% [7][8] - Adjusted EBITDA rose by 25.2% to reach $90,500,000, with a free cash flow generation of $109,300,000, converting 121% of adjusted EBITDA [8][15] - The company ended 2024 with $491,000,000 in cash and no debt, providing significant financial flexibility [9][15] Business Line Data and Key Metrics Changes - Implemented providers grew to 4,789, with practice collections increasing by 4.5% to $2,970,000,000, and care margin up by 12.4% [14][15] - The company achieved a gross provider retention rate of 98%, indicating strong provider satisfaction with the Privia platform [10] Market Data and Key Metrics Changes - Total attributed lives increased by over 11% year over year, with commercial attributed lives rising by 15.2% to reach 782,000 [11] - Medicare Advantage and Medicaid attribution both increased by nearly 8% from the previous year [11] Company Strategy and Development Direction - Privia aims to build one of the largest primary care-centric delivery networks in the nation, focusing on disciplined growth and capital deployment [9][18] - The company plans to maintain its core priorities in 2025, including increasing provider density, attribution growth, and operational efficiencies [16][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds in the Medicare Advantage environment but expressed confidence in the company's ability to build scale and profitability despite challenges [11][12] - The company expects to generate positive contribution margins in value-based contracts while managing risks and enhancing clinical performance [11][12] Other Important Information - The company does not anticipate new market entry costs in its 2025 guidance, focusing instead on organic growth in existing markets [19][89] - Management emphasized the importance of a disciplined approach to capital deployment and the potential for returning capital to shareholders if stock prices deviate from intrinsic value [28] Q&A Session Summary Question: Can you break out the leverage between sales and marketing and G&A? - Management indicated that the guidance reflects scaling of the cost structure, with no new market entry costs assumed [22][23] Question: What is the status of M&A opportunities given the cash on the balance sheet? - Management stated they are exploring all opportunities but will remain disciplined in their approach, focusing on capital deployment to create shareholder value [26][28] Question: How does the glide path to risk impact Privia? - Management believes their approach to risk-taking validates their market position and does not change their strategy [32][34] Question: What factors are influencing the flatness in shared savings? - Management noted that prudence in guidance reflects various factors, including utilization trends and potential changes in program structures [40][41] Question: What is the expected contribution margin for the capitated book? - Management indicated that while they expect a positive contribution margin, it is difficult to predict if it will improve from the previous year [112] Question: How does the company view the potential increase in uninsured individuals? - Management expressed that they do not have significant exposure to Medicaid or uninsured populations, and their diversified mix helps mitigate risks [68]