P3 Health Partners(US:PIII)2022-10-20 22:22Financial Data and Key Metrics Changes - Revenue for the first half of 2022 was $543 million, an increase of 84% compared to $296 million in the prior year period [44] - The company reported a net loss of $964 million for the first half of 2022, compared to a net loss of $54 million in the same period last year, primarily due to a goodwill impairment charge of $851 million [45][46] - Adjusted EBITDA loss was $48 million in the first half of 2022, compared to an adjusted EBITDA loss of $34 million in the same period of the prior year [47] - The adjusted EBITDA loss per member per month improved to $78, compared to a loss of $85 in the prior year [48] Business Line Data and Key Metrics Changes - The company ended the first half of 2022 with approximately 102,000 at-risk Medicare Advantage members, a 52% increase from 67,000 at the end of 2021 [17][53] - The gross margin improved by 217 basis points in the first half of 2022 compared to the same period in the prior year [28][31] Market Data and Key Metrics Changes - P3 Health Partners is now in 18 markets across five states, including a successful expansion into California and increased presence in Arizona [14] - The Medicare Advantage market is growing at an average rate of approximately 9% per year, with significant opportunities for value-based care contracts [43] Company Strategy and Development Direction - The company is focused on disciplined, purposeful growth, aiming for an average of 35% year-over-year growth over the next five years [75] - P3 Health Partners is committed to improving patient outcomes and operational excellence while managing the balance sheet prudently [31][66] - The company has been accepted into the ACO reach program for 2023, which is expected to enhance its ability to reach new members [15][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to absorb recent growth and focus on executing the business strategy [71] - The company anticipates modest operating cash flow losses in 2023 compared to 2022, driven by the maturation of its members [72][88] - Management expects to achieve adjusted EBITDA profitability by 2024 [50][88] Other Important Information - Eric Atkins, the CFO, announced his departure, and Erin Darakjian has been appointed as the Interim CFO [32][34] - The company has experienced direct costs related to COVID-19 patient admissions amounting to $84 million since the pandemic began [51] Q&A Session Summary Question: Is the restatement issue behind the company? - Management confirmed that they are excited to move forward and focus on business opportunities after resolving the restatement [71] Question: How is the capital position of the company? - The company expects more modest operating cash flow losses in 2023 and is looking at options to refinance its existing debt facility [72][74] Question: What is the outlook for membership growth during the open enrollment period? - Management is confident in maintaining strong growth and has expanded payer relationships in several states [76] Question: Can you explain the sequential revenue trends and EBITDA loss? - The revenue shift of $9 million from the second quarter was due to risk adjustment payments recognized in the prior period [82] Question: What are the drivers of growth in Medicare Advantage lives? - The company has seen increased demand and successful expansions into new markets, contributing to the growth in membership [96] Question: What is the timeframe for converting accounts receivable into operating cash? - The cash flow lag is typically six to nine months, with some improvement expected in Q4 and into 2023 [100] Question: What are the expectations for profitability in 2023? - Management reiterated a commitment to achieving adjusted EBITDA profitability by 2024, with improvements expected in 2023 [88]