P3 Health Partners(US:PIII)2023-11-11 12:38Financial Data and Key Metrics Changes - Revenue for Q3 2023 was $288 million, a 16% increase year-over-year, with year-to-date revenue of $920 million also growing 16% compared to the prior year [27][47] - Adjusted EBITDA for the quarter was a loss of $22.3 million, an improvement from a loss of $40.3 million in the prior year, with year-to-date adjusted EBITDA loss of $41.2 million compared to a loss of $87.9 million in the previous year, representing a 53% improvement [21][29][52] - Medical margin for Q3 was $36 million, with a year-to-date total of $126 million, on track to meet the annual guidance of $155 million to $175 million [20][54] - Cash burn for Q3 was $8 million, with expectations to reach cash flow breakeven in 2024 [26][55] Business Line Data and Key Metrics Changes - Medical margin per member per month (PMPM) for persistent lives was $241 year-to-date, consistent with mature market ranges [20] - Revenue PMPM growth for the quarter was 11%, with year-to-date revenue PMPM at $985, compared to Agilon's $945 [34] - Gross profit PMPM for the year-to-date was $56, compared to Agilon's $45 PMPM [36] Market Data and Key Metrics Changes - Persistent lives, defined as those on the platform in December 2022 and January 2023, showed a medical claim expense PMPM decrease of approximately negative 2% year-to-date [28] - In California, revenue PMPM increased to $1,134 year-to-date, a 16% increase from the prior year, while medical margin PMPM improved from negative $45 to positive $244 [43] Company Strategy and Development Direction - The company aims to grow its fully delegated lives from 20% to approximately 30%-35% by converting existing contracts and signing new ones [99] - Focus on existing and adjacent markets while leveraging existing infrastructure for capital-efficient growth in 2024 [30] - The company is optimistic about the opportunities for strategic partnerships and joint ventures with payers and providers [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive adjusted EBITDA in 2024, with a preliminary guidance range of $20 million to $40 million [19][57] - The company is on track to meet its 2023 guidance, with strong momentum and improvements in medical costs and margins [25][60] - Management highlighted the importance of physician engagement and patient maturation in driving future performance [68] Other Important Information - The average age of persistent lives is reported to be 73 years old [105] - The company ended the quarter with approximately $58 million in cash, indicating a solid liquidity position [55] Q&A Session Summary Question: What is the expected EBITDA for 2024? - Management expects a positive EBITDA between $20 million and $40 million for 2024, driven by revenue growth and improved medical margins [19][57] Question: How confident is the company in bringing in new lives while maintaining performance? - Management is confident in adding new lives in 2024, leveraging existing infrastructure and seeing shorter timeframes for achieving successful medical margins [68] Question: Can you elaborate on the negotiations with payers for 2024? - The company signed a multiyear contract with SCAN Health and expanded relationships with Aetna and Atrio, with protections in place for medical benefits changes [77][80] Question: What is the current number of affiliated PCPs and at-risk members? - The company has over 2,700 affiliated PCPs and approximately 110,000 Medicare at-risk members [72][74] Question: How does the company plan to manage medical costs moving forward? - Management is focused on improving risk adjustment coding and managing medical costs through better data utilization and care management strategies [70][104]