Financial Data and Key Metrics Changes - Astrana Health reported total revenue of $620.4 million for Q1 2025, a 53% increase compared to the prior year period [8][19] - Adjusted EBITDA for the quarter was $36.4 million, reflecting continued success in growing membership and managing cost trends effectively [8][19] - Net income attributable to Astrana for the quarter was $6.7 million, with earnings per share (EPS) of $0.14 [19] - The company closed the quarter with $260.9 million in cash and short-term investments [20] Business Line Data and Key Metrics Changes - The Care Partners segment grew 57% year over year, contributing $600 million to total revenue [8] - Membership in the Care Partners segment reached 910,000 as of Q1 2025, with approximately 38% of members now in full risk contracts, up from 5.5% a year ago [10] - CHS contributed $95 million in revenue for the quarter, in line with expectations [8][19] Market Data and Key Metrics Changes - Medical cost trends for the quarter were in line with expectations, in the mid-single digits, with Medicaid trends above and Medicare and commercial trends below the blended average [9][10] - In Nevada, membership in the risk-bearing network grew 40%, and clinic visit volume increased by 35% year over year [11] Company Strategy and Development Direction - The company focuses on four strategic pillars: sustainable membership growth, alignment of patient outcomes with financial performance, improving care quality while managing costs, and driving operational excellence through a proprietary care enablement platform [5][6] - The integration of CHS onto the Astrana platform is complete, with over $10 million in G&A efficiencies identified [12] - The company plans to close the acquisition of Prospect Health, which will significantly expand its provider network in Southern California [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver sustainable, profitable growth despite the current environment [20] - The 2026 Medicare Advantage rate notice is seen as a positive signal for the business, reinforcing a stable reimbursement outlook [15] - Management remains optimistic about the integration of Prospect Health and its potential contributions to revenue and EBITDA [13][19] Other Important Information - The company generated $13.6 million in free cash flow for the quarter, with a non-recurring debt issuance cost of $5 million [20] - The expected pro forma net leverage post-acquisition of Prospect is approximately 3.4 times, with a goal to deleverage below three times within twelve months post-close [20] Q&A Session Summary Question: Details on CHS integration progress - Management confirmed that the integration of CHS is complete, with technology deployed and G&A efficiencies identified [25][26] Question: Status of the Prospect deal and Medicare Advantage exposure - Management is preparing for the integration of Prospect Health, with regulatory approvals pending, and anticipates that approximately 60% of combined revenue will be related to Medicare [30][31] Question: Medicaid trends and utilization impacts - Management noted that the increase in Medicaid utilization was primarily due to a spike in ER and lab visits, not from redetermination impacts [32][34] Question: Guidance for second quarter revenue - Management indicated that the guidance for Q2 revenue is slightly lower than expected due to seasonality and anticipated full risk member conversions being weighted towards the latter half of the year [38][39] Question: MSSP shared savings booked in Q1 - Management reported zero MSSP shared savings booked in Q1, with expectations to book savings in the latter half of the year [71] Question: Concerns about the Prospect Medical transaction - Management reassured that the audited financials for Prospect are above the anticipated $81 million in adjusted EBITDA, and they remain confident in the earnings power of Prospect [86][87]
Astrana Health(ASTH) - 2025 Q1 - Earnings Call Transcript