agilon health — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue increased 6% year-over-year to $1.52 billion in Q3 2026, compared to $1.44 billion in Q3 2025.
• Net income turned positive at $35 million in Q3 2026, reversing a net loss of $110 million in Q3 2025.
• Adjusted EBITDA improved to $64 million in Q3 2026 from a negative $91 million in Q3 2025.
• Medical services expense ratio (MSER) decreased to 88.5% in Q3 2026 from 104.0% in Q3 2025, driven by favorable claims development in the first half of 2026.
• Geography entry costs decreased 64% year-over-year to $2 million in Q3 2026 from $7 million in Q3 2025.
• Cash, cash equivalents, and marketable securities totaled $312 million as of September 30, 2026, with total debt at $32 million.
• Unconsolidated ACO model entities held $74 million in cash at the end of the quarter.
• For the nine months ended September 30, 2026, net income was $101.8 million compared to a net loss of $202.5 million in the prior year period.
• Operating cash flow for the nine months ended September 30, 2026, was $16.3 million, compared to $85.2 million used in the prior year period.

Guidance and Future Outlook:

• Full-year 2026 revenue guidance was raised to a range of $5.87 billion to $5.89 billion, up from the previous range of $5.775 billion to $5.86 billion.
• Full-year 2026 Adjusted EBITDA guidance was raised to a range of $145 million to $155 million, up from the previous range of $75 million to $95 million.
• Full-year 2026 MSER guidance was adjusted to a range of 90.3% to 90.5%, down from the previous range of 91.4% to 91.9%.
• Full-year 2026 geography entry costs guidance remains unchanged at $15 million.
• Management expects ACO model entities to contribute approximately $40 million to $45 million to Adjusted EBITDA for fiscal year 2026.
• The company does not provide forward-looking guidance for net income due to uncertainty regarding non-cash stock-based compensation.

Business Segments and Product Lines:

• Total members on the agilon platform decreased to 566,000 as of September 30, 2026, from 618,000 in the prior year period.
• Medicare Advantage members decreased to 454,000 (from 503,000), and ACO model beneficiaries decreased to 112,000 (from 115,000).
• Membership changes reflect a disciplined contracting approach focused on profitability, previously disclosed market exits, and measured growth.
• Revenue growth was driven by higher-than-expected burden of illness performance, payor contracting, and improved pricing, partially offset by lower membership.
• The platform supports approximately 2,300 primary care physicians across 30 communities.

Market and Competitive Landscape:

• The company differentiates its model through proximity to physicians and patients, enabling trusted relationships and actionable insights at the point of care.
• The business model focuses on transitioning physician groups and health systems to a value-based Total Care Model for senior patients.

Risks and Challenges:

• Risks include the potential for medical expenses to exceed revenues, failure to secure favorable payor contracts, and the challenge of growing physician partner relationships to recover startup costs.
• The company faces risks related to reliance on a limited number of key payors and the ability to renew contracts upon expiration.
• Uncertainty exists regarding non-cash stock-based compensation and its impact on net income.
• Potential risks include cybersecurity attacks, data breaches, and regulatory changes affecting the healthcare industry.

Management Commentary and Tone:

• CEO Tim O'Rourke stated that third-quarter results exceeded expectations, reflecting disciplined execution and operational progress.
• Management emphasized that the company's proximity to physicians and patients differentiates its model and positions it to create sustainable, long-term value.
• The tone indicates confidence in the foundation built to deliver better outcomes and financial performance.

Other Key Points:

• The company hosted a conference call on November 4, 2026, to discuss results.
• The ACO model entities are not consolidated within the company's financial results, though their Adjusted EBITDA contributions are tracked separately.
• Stock-based compensation expense for the nine months ended September 30, 2026, was $48.9 million, compared to $39.6 million in the prior year period.
• The company reported a net increase in cash, cash equivalents, and restricted cash of $72.7 million for the nine months ended September 30, 2026.