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 - Total revenue for Q1 2025 was $373 million, a 4% decrease from the prior year, primarily due to an 8% year-over-year decline in membership [11][15] - Average membership for Q1 2025 was approximately 116,000, down from 126,000 in Q1 2024, reflecting a strategic exit from unprofitable plans [14] - Per member funding increased by 8% to $10.63 on a PMPM basis compared to full year 2024, indicating improved capture of disease burden [11][15] - Adjusted operating expenses decreased by 18% sequentially and 11% year over year, reflecting efficiency improvements [7][17] - Adjusted EBITDA for Q1 2025 was a loss of $22 million, with a normalized loss of $13 million after accounting for a single underperforming contract [17][18] 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 [12][14] - The complex care program is projected to deliver over $30 million in savings for 2025 through improved care coordination [10][24] - Medical margin for Q1 2025 was approximately $17 million or $49 PMPM, compared to $37 million or $96 PMPM in Q1 2024 [15][17] Market Data and Key Metrics Changes - Three of the four markets achieved breakeven or better in Q1 2025, with expectations for continued improvement [6][27] - Increased funding across markets by 8% on a PMPM basis, indicating better financial performance [6][28] - The company is experiencing a steady ramp in converting groups into the Tier one category, with Oregon's enrollment expected to reach 60% by Q3 [10] Company Strategy and Development Direction - The company is executing a $130 million operating improvement plan, with a focus on operational efficiency, contracting, and execution [7][19] - Strategic initiatives include renegotiating payer contracts to reduce Part D exposure and improve funding [8][49] - The care enablement model is gaining momentum, aimed at reducing medical expenses and improving outcomes through enhanced data sharing and decision-making tools [9][24] Management's Comments on Operating Environment and Future Outlook - Management remains confident in meeting full-year targets, citing positive progress from strategic initiatives [19][27] - The company is addressing performance issues with a single outlier payer, with expectations for improvements in 2026 [6][27] - Overall, management sees encouraging trends in Medicare Advantage, with improved utilization metrics and funding structures [56][57] Other Important Information - The company ended Q1 2025 with approximately $40 million in cash, actively managing liquidity [20] - The implementation of the Innovaccer system is on schedule for complete deployment by mid-summer, enhancing data infrastructure and analytics capabilities [26] Q&A Session Summary Question: Progress on the $130 million EBITDA initiative - The company achieved roughly one-fifth of the OpEx savings in Q1, with more benefits expected in the latter half of 2025 [33][34] Question: Engagement and satisfaction trends with the RESTORE program - The engagement strategy is working well, with key providers becoming ambassadors for the program [36][37] Question: Details on the outlier payer causing issues - The outlier payer accounts for no more than 22% of overall revenue, with cost pressures primarily related to inpatient services from 2024 [42][44] Question: Trends in Medicare Advantage - The company is seeing improvements in utilization and benefit structures, contrary to negative trends reported by other payers [56][57]