agilon health(US:AGL)2022-03-04 16:24Financial Data and Key Metrics Changes - Total members live on the agilon platform increased 82% year-over-year to 238,000, with consolidated Medicare Advantage membership increasing 42% to 186,000 [9][20] - Revenue for the fourth quarter increased 44% year-over-year to $463 million, while full-year revenue increased 50% to $1.83 billion [10][21] - Medical margin for the fourth quarter was $31 million, a 15% increase from $27 million in the prior year, while full-year medical margin was $182 million compared to $192 million in 2020 [10][21] - Adjusted EBITDA was negative $26.7 million in the fourth quarter and negative $38.6 million for the full year, with expectations for breakeven to a positive $10 million in 2022 [23][25] Business Line Data and Key Metrics Changes - Membership growth in Medicare Advantage was driven by the addition of three new geographies and strong same geography growth of 15% [20] - Medical margin per member per month in partner markets was $94 in 2021, with expectations to increase to $127 to $130 in 2022 [11][12] - Direct contracting members ended the quarter at 52,000, with expectations for modest adjusted EBITDA contribution in 2022 [20][25] Market Data and Key Metrics Changes - The company is expanding its footprint to cover 12 states, 25 geographies, and 23 partners, with expectations to approach 500,000 senior patients on the platform by the end of 2023 [15][19] - Hawaii represents 15% of membership for 2022, with plans to finalize a partnership with Hawaii Health Network to improve performance in this market [16][17] Company Strategy and Development Direction - The company aims to transform healthcare by empowering primary care doctors and shifting from a fee-for-service model to a value-based subscription model [8][12] - The focus is on deep alignment with primary care doctors, local market scale, and being a first mover in fee-for-service dominated geographies [7][12] - The company is optimistic about the ACO Reach program, which emphasizes health equity and provider governance, aligning with its mission and values [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong growth for 2022, expecting membership and revenues to grow by 40% or higher, with positive adjusted EBITDA reflecting an increase in MA medical margin of over $120 million [12][25] - The company anticipates that existing partner market medical margins will improve significantly, driven by better insights and actionable information [12][37] - Management noted that the competitive environment remains favorable, with a growing demand for a new primary care business model [68] Other Important Information - The company has over $1 billion in cash on hand and under $50 million in outstanding debt, indicating strong capitalization [24] - Platform support costs increased but remain well below revenue growth, highlighting the efficiency of the company's model [22] Q&A Session Summary Question: Insights on the class of 2023 and membership growth - Management confirmed that the 80,000 new members are solely Medicare Advantage and highlighted the strong demand for a new primary care business model driving this growth [30][31] Question: Direct contracting expectations for 2022 - Management moderated expectations for direct contracting but still anticipates it to be a positive contributor to adjusted EBITDA [32][33] Question: Performance in existing markets and medical margins - Management indicated that existing partner markets are performing better than expected, with medical margins projected to increase significantly [36][37] Question: Hawaii market performance and partnership - Management clarified that the partnership with Hawaii Health Network aims to improve performance in this non-partner market, shifting 20% of MA membership to this arrangement [45][46] Question: Overall trends and COVID impact in 2022 - Management expects utilization to return to pre-COVID levels, with a shift from inpatient to outpatient care [48][49] Question: Future growth expectations and competitive landscape - Management expressed confidence in continued strong growth and noted that competition remains manageable, with a focus on building partnerships in new markets [68][69]