Starling Oncology — Second Quarter 2026 Earnings Summary

Financial Performance

• Consolidated revenue for the quarter ended June 30, 2026, was $161.3 million, a 34.6% increase from $119.8 million in the prior year quarter.
• Gross profit was $27.2 million, representing a 55.2% increase year-over-year.
• Net loss narrowed to $9.8 million compared to a net loss of $17.0 million in the prior year quarter.
• Basic and diluted loss per share improved to $(0.08) from $(0.15) in the prior year quarter.
• Adjusted EBITDA turned positive at $229 thousand, compared to a loss of $(4.1) million in the prior year quarter.
• Cash and cash equivalents totaled $41.1 million as of June 30, 2026.
• For the six months ended June 30, 2026, free cash flow was $9.5 million, a significant improvement from a negative $14.6 million in the prior year period.
• Long-term debt, net of unamortized costs, increased to $79.9 million as of June 30, 2026, from $77.4 million at December 31, 2025.

Guidance and Future Outlook

• Full-year 2026 revenue guidance was raised to $650–$670 million from a previous range of $630–$650 million.
• Full-year 2026 gross profit guidance was raised to $105–$110 million from a previous range of $97–$107 million.
• Full-year 2026 Adjusted EBITDA guidance was raised to $2–$7 million from a previous range of $0–$9 million.
• Full-year 2026 free cash flow guidance remains unchanged at $5–$15 million.
• Third quarter 2026 Adjusted EBITDA is anticipated to be between $500 thousand and $1.5 million.
• The company expects approximately $150 million in capitated revenue for the full year 2026.
• Medical Loss Ratio (MLR) is anticipated to be in the range of 80% to 90% for the next twelve months.

Business Segments and Product Lines

• Specialty Pharmacy revenue increased 58% year-over-year, driven by record Part D fills and the ramp-up of Florida delegated arrangements.
• The company achieved exclusivity in California with a major partner across all their delegated medical groups, adding approximately 230,000 capitated lives.
• Starling Oncology signed its first delegated contracts outside of Florida in Nevada and Oregon.
• The company is preparing to launch its proprietary provider portal, Starling Nexus, in mid-August to strengthen provider engagement.
• Total lives under value-based contracts reached 2.1 million as of June 30, 2026, up from 1.9 million in the prior year period.
• The number of affiliated and network clinics increased to 301 from 80 in the prior year period.

Market and Competitive Landscape

• The company operates across 17 markets.
• Starling Oncology is positioning itself as one of the largest value-based community oncology groups in the United States.
• The company serves a population of approximately 2.1 million patients.

Risks and Challenges

• Outlook assumes a largely stable global market; persistent tariff rate increases and exchange rate changes could negatively impact world trade and results.
• Forward-looking statements regarding Adjusted EBITDA and revenue are subject to uncertainties regarding capitated lives, direct costs, taxes, capital expenditures, share-based compensation, and other non-cash items.
• Risks include potential adverse judgments, settlements, or fines from judicial and administrative proceedings, changes in patient or payor preferences, and cybersecurity incidents affecting software providers.
• The company notes it is not reasonably able to provide a quantitative reconciliation for forward-looking Adjusted EBITDA, MLR, and Free Cash Flow to GAAP measures without unreasonable efforts.

Management Commentary and Tone

• CEO Daniel Virnich described the second quarter as a "milestone quarter" citing a 35% year-over-year revenue increase and the transition to positive Adjusted EBITDA.
• Management expressed confidence in a path to sustained positive Adjusted EBITDA driven by robust capitated revenue growth from new contracts in Nevada, Oregon, and California.
• The tone emphasized momentum from new delegated contracts and the upcoming launch of the Starling Nexus portal.

Other Key Points

• The company operates over 400 employed and network clinicians across more than 100 clinics and network locations in five states.
• The company was formerly known as The Oncology Institute.
• Adjusted EBITDA is defined as net loss plus depreciation, amortization, interest, taxes, and various non-cash add-backs including share-based compensation and one-time fees.
• Medical Loss Ratio is defined as total direct costs related to capitated contracts divided by total capitated revenue.
• Free Cash Flow is defined as net cash flow from operations plus cash paid for interest, less capital expenditures.