Financial Data and Key Metrics Changes - For Q4 2024, Medicare Advantage (MA) membership increased by 36% year-over-year to 527,000 members, driven by the expansion of the '24 partner class and 4.1% same geography growth [10][30] - Total revenue grew 44% to $1.52 billion for the quarter and $6.06 billion for the year, primarily driven by the class of '24 and organic growth in existing classes [11][31] - Medical margin was $1 million for Q4 2024, compared to a negative margin of $102 million in Q4 2023, while the full-year medical margin was $205 million, down from $299 million in 2023 [34] - Adjusted EBITDA was negative $84 million for Q4 2024 and negative $154 million for the full year, reflecting elevated medical cost trends and unfavorable prior year development [12][37] Business Line Data and Key Metrics Changes - ACO model membership reached 132,000 members at the end of Q4 2024, representing a 48% year-over-year growth [30] - The company anticipates a full-year MA membership decline of approximately 4% for 2025, projecting a range of 490,000 to 520,000 members [14][41] - ACO model business is projected to have 110,000 members in 2025, as the company exits one underperforming MSSP partnership [14][41] Market Data and Key Metrics Changes - The Medicare Advantage market continues to experience elevated cost trends, with a gross medical cost trend of 6.3% expected for 2025 [16][48] - The company has reduced its Medicare Part D exposure to less than 30% of its membership, reflecting a strategic decision to minimize risk in areas outside its control [56][58] Company Strategy and Development Direction - The company aims to be cash flow breakeven by 2027, focusing on strengthening its business for near-term improvement and profitability [8][50] - Strategic actions include reducing underwriting exposure, pursuing profitable growth, enhancing clinical and operational capabilities, and maintaining cost discipline [7][24] - The company is investing in clinical programs to improve quality outcomes and is focused on leveraging technology and data analytics to enhance operational performance [22][23] Management's Comments on Operating Environment and Future Outlook - Management acknowledges a challenging macro environment for 2025 but expresses optimism about favorable trends in payor bids and the 2026 advanced notice from CMS [9][25] - The company views 2025 as a transition year, with expectations for improved financial performance in 2026 and beyond [24][28] Other Important Information - The company ended Q4 2024 with cash and marketable securities of $406 million, with an expected cash use of approximately $110 million for 2025 [39][50] - The company has exited two unprofitable partnerships, improving bottom line profitability and cash burn [27][28] Q&A Session Summary Question: Changes to Part D and Contracting for 2025 - Management discussed narrowing exposure to Part D risk, reducing it to 30% of members, and highlighted the challenges associated with this risk [56][57] Question: Year 1 Performance Expectations - Management noted strong performance from the class of '24 and indicated that the class of '25 will be smaller with a focus on measured growth [63][64] Question: Medical Cost Trend Guidance - Management clarified that the 50 basis point estimate for the 2 Midnight rule is incorporated into the cost trend guidance for 2025 [72] Question: ACO REACH Client Impact - Management confirmed that exiting an underperforming MSSP partnership was due to financial losses, impacting overall performance [79] Question: Working Capital Improvement Factors - Management highlighted disciplined cash management and partnership exits as key factors improving working capital [86][88] Question: Medical Margin Initiatives - Management expressed confidence in initiatives aimed at improving quality performance and clinical management activities [92][96] Question: 2026 MA Advance Notice - Management was encouraged by the advance notice and emphasized the need for rates to catch up with utilization trends [101][102]