Oscar(US:OSCR)2025-11-06 14:00Financial Data and Key Metrics Changes - Total revenue for Q3 2025 was approximately $3 billion, representing a 23% year-over-year increase [5][14] - Medical Loss Ratio (MLR) increased by approximately 380 basis points to 88.5% due to higher market morbidity [5][15] - SG&A expense ratio improved by approximately 150 basis points year-over-year to 17.5% [5][16] - Loss from operations was $129 million, a change of $81 million year-over-year, while net loss was $137 million, an $83 million change year-over-year [5][16] - Adjusted EBITDA loss was $101 million in the quarter, a change of $90 million year-over-year [5][16] Business Line Data and Key Metrics Changes - Membership grew to over 2 million, a 28% increase year-over-year [8] - The company continues to diversify its product mix, introducing new plans like Hello Meno for women experiencing menopause [9] Market Data and Key Metrics Changes - The total addressable market for plan year 2026 is approximately $12 million, up $500,000 year-over-year [9] - The weighted average rate increase for 2026 is approximately 28%, reflecting elevated market morbidity and the expiration of enhanced premium tax credits [8][20] Company Strategy and Development Direction - The company aims to expand margins and return to profitability in 2026, focusing on disciplined pricing strategies [12][20] - Oscar is positioned to capture market share as other carriers retreat or price themselves out of the market [8][20] - The introduction of an AI health agent, Oswell, is part of the strategy to enhance member experience and operational efficiency [11] Management's Comments on Operating Environment and Future Outlook - Management noted that 2025 is a reset moment for the individual market, with expectations of rational pricing in the 2026 open enrollment period [7][20] - The company remains optimistic about Congress reaching a compromise on tax credits to address affordability issues [7] - Management expressed confidence in the ability to navigate market dynamics and improve profitability [20][39] Other Important Information - The company completed a $410 million convertible notes offering, strengthening its capital position [17] - Oscar's innovative plans and AI integration are expected to redefine the healthcare experience [11] Q&A Session Summary Question: Regarding the September weekly report and market morbidity shifts - Management indicated that market morbidity increased by about 1.5 to 2 points across several markets, with no significant changes expected through the end of the year [24] Question: On G&A targets for 2027 - Management believes there is room for improvement in SG&A, leveraging AI to streamline operating costs [27] Question: On underlying cost trends in the quarter - Favorable development of $84 million was noted, primarily related to risk adjustment and claims [30] Question: On enrollment trends and member retention - Stronger than expected membership growth was driven by lower churn, positively impacting MLR dynamics [70] Question: On competitive dynamics and pricing strategy - Management noted that they are positioned competitively, with a focus on taking market share from higher-priced competitors [51][66]