P3 Health Partners(US:PIII)2023-08-08 01:27Financial Data and Key Metrics Changes - Adjusted EBITDA was positive at approximately $200,000 for Q2 2023, a significant improvement from a loss of $28.7 million in the same period last year [15][54] - Total revenue for Q2 2023 was $329.1 million, representing a growth of approximately 22% compared to the prior year [13][14] - Medical margin improved to $50.5 million, or $161 PMPM, a 132% increase year-over-year [66] - Operating expenses decreased to $85 PMPM, down approximately 20% from $102 PMPM in the prior year [6] Business Line Data and Key Metrics Changes - The medical cost ratio was 84% in Q2 2023, leading to a medical margin of about $50.5 million [6] - Medical cost trend for Medicare Advantage lives increased by roughly 1% year-over-year, significantly lower than the overall market trend [6][17] - Adjusted EBITDA PMPM was close to breakeven compared to negative $95 PMPM in the same period last year [6] Market Data and Key Metrics Changes - P3 onboarded over 100,000 Medicare risk lives in a short period, indicating effective growth in the market [9] - In Arizona, membership grew from 10,000 in 2018 to approximately 45,500 in Q2 2023, with revenue PMPM increasing from $628 to $921 [12] Company Strategy and Development Direction - The company aims to expand into adjacent counties with minimal costs by leveraging existing infrastructure [8] - P3's model is described as high growth and low capital expenditure, focusing on operational excellence to achieve profitability [62][64] - The company is committed to disciplined growth to reach profitability while managing costs effectively [34][49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving adjusted EBITDA profitability in 2024, with an increase in guidance reflecting improved performance [16][33] - The company noted strong demand from payer partners and clinicians, indicating a positive outlook for growth in the second half of the year [41] - Management emphasized the importance of operational discipline and continuous improvement in achieving financial goals [11][67] Other Important Information - The company reported a cybersecurity incident during the quarter, which was deemed immaterial with no ongoing impact expected [40] - The first half of 2023 saw capitated revenue of $624.3 million, an improvement of approximately 16% compared to the prior year [65] Q&A Session Summary Question: What drove the decrease in G&A expenses? - Management indicated that the decrease is sustainable and reflects a solid base for further efficiency improvements [26][27] Question: How does the company plan to expand into new counties? - The company plans to focus on contiguous counties to leverage existing infrastructure and relationships with payers [30] Question: What are the expectations for patient demand in the second half of the year? - Management remains bullish about growth, expecting continued high demand from both payer partners and clinicians [41] Question: Is the improvement in funding sustainable into 2024? - Management expressed optimism about sustaining funding improvements into 2024 due to increased engagement and operational focus [44][46] Question: What is the impact of the cybersecurity incident? - The incident was small and contained, with no expected ongoing impact on operations [40]