Revenue increased 74% to $1.14 billion and
Medicare Advantage membership increased 61% to 402,200
Total members live on the agilon platform
grew to 490,900, including 402,200 Medicare Advantage members and
88,700 ACO REACH beneficiaries
Continued gains in profitability driven by
strong performance across partner markets, inclusive of higher
membership growth
agilon health, inc. (NYSE: AGL), the trusted partner empowering
physicians to transform health care in our communities, announced
results for the first quarter ended March 31, 2023.
“Our successful start to 2023 reflects the dedication of our
physician partners and the power of our network to consistently
improve patient outcomes,” said Steve Sell, chief executive
officer. “Our physician-centric model was designed to rapidly and
efficiently scale across diverse partner organizations and we are
excited to bring a sustainable model for primary care to more
communities in 2024 and beyond.”
Total revenue of $1.14 billion in the first quarter 2023,
compared to $653 million in the first quarter 2022. Gross Profit of
$77 million in the first quarter 2023, compared to $42 million in
the first quarter 2022. Net income of $16 million in the first
quarter 2023, compared to $1 million in first quarter 2022.
Revised Presentation of Adjusted EBITDA
and Network Contribution
agilon health has revised its presentation of Adjusted EBITDA
and Network Contribution. The company determined the revised
presentation is necessary to conform to the SEC’s recent guidance
on Non-GAAP Financial Measures. Network Contribution is replaced by
Gross Profit, which now incorporates other operating revenue and
geography entry costs included in other medical expenses. Adjusted
EBITDA now incorporates geography entry costs included in other
medical expenses and G&A.
Revised Presentation of Adjusted EBITDA
Three Months
Fiscal Year
Ended March 31,
Ended December 31,
2023
2022
2022
2021
Adjusted EBITDA – Prior Presentation
($M)
$35
$12
$4
($39)
Geography Entry Costs ($M)
($12)
($4)
($68)
($33)
Adjusted EBITDA ($M)
$24
$8
($63)
($71)
Tables with the revised reconciliation of Gross Profit and
Adjusted EBITDA to the most comparable GAAP measure are included in
this press release, including historical periods.
First Quarter 2023
Results:
- Total members live on the agilon platform increased to 490,900
as of March 31, 2023, including 402,200 Medicare Advantage members
and 88,700 ACO REACH beneficiaries. Medicare Advantage membership
increased 61%, with 14% growth in same geographies.
- Total revenue of $1.14 billion increased 74% during the first
quarter 2023 compared to $653 million in the first quarter
2022.
- Medical Margin of $162 million increased 88% during the first
quarter 2023 compared to $86 million in the first quarter 2022.
Medical Margin represented 14.3% of revenue during the first
quarter 2023 compared to 13.2% in the first quarter 2022.
- Adjusted EBITDA of $24 million in the first quarter 2023
compared to $8 million in the first quarter 2022. Adjusted EBITDA
included $12 million and $4 million of geography entry costs in the
first quarter 2023 and first quarter 2022, respectively.
Key Financial and Operating Metrics:
Three Months
Ended March 31,
Change
2023
2022
% YoY
Medicare Advantage Members
402,200
250,300
61%
ACO REACH Members
88,700
91,800
(3%)
Total Members Live on Platform
490,900
342,000
44%
Avg. Medicare Advantage Members
399,800
248,000
61%
Total revenues ($M)
$1,136
$653
74%
Gross Profit ($M)
$77
$42
82%
Medical Margin ($M)
$162
$86
88%
Net Income ($M)
$16
$1
1282%
Adjusted EBITDA ($M)
$24
$8
197%
Geography Entry Costs ($M)
$12
$4
191%
Adjusted EBITDA contribution from ACO REACH was $3 million
during the first quarter 2023 and $3 million in the first quarter
2022.
Membership reflects end of period results, unless otherwise
stated. agilon’s partnered ACO REACH Entities are not consolidated
within its financial results.
Class of 2024 New Partnership Announcements:
Lexington Clinic and agilon health announced the formation of a
long-term partnership on February 9, 2023. Lexington Clinic is the
largest and oldest multi-specialty medical group in Central
Kentucky with 25 locations across the region.
Family Practice Center and agilon health announced the formation
of a long-term partnership on February 28, 2023. Family Practice
Center is Central Pennsylvania’s largest independent primary care
physician group with 42 locations in 12 counties.
Premier Health and agilon health announced the formation of a
long-term partnership on March 30, 2023. Premier Health is one of
Ohio’s largest, nonprofit, comprehensive health care systems, with
more than 100 locations across seven counties, including acute care
hospitals and outpatient facilities, physician practices, long-term
care facilities, and home health.
Holland PHO, a Physician-Hospital Organization, and agilon
health announced the formation of a long-term partnership on March
30, 2023. Holland PHO is a partnership between community physician
groups and Holland Hospital serving the West Michigan Lakeshore
region.
Catalyst Health Network and agilon health announced the
formation of a long-term partnership on April 2, 2023. Catalyst
Health Network is the largest clinically integrated network for
independent primary care providers in Texas.
Capital Position and Balance Sheet:
The company’s balance sheet as of March 31, 2023 included cash,
cash equivalents and marketable securities of $817 million and
total debt of $42 million.
On February 28, 2023, agilon health completed the previously
announced acquisition of mphrX, a leading provider of value-based
care technology and interoperability solutions, for cash
consideration of $44 million, net of cash acquired.
Outlook for Second Quarter and Fiscal
Year 2023:
Quarter Ended June 30,
2023
Year Ended December 31,
2023
Low
High
Low
High
Medicare Advantage Members
403,000
405,000
405,000
410,000
ACO REACH Members
85,000
90,000
85,000
90,000
Total Members Live on Platform
488,000
495,000
490,000
500,000
Avg. Medicare Advantage Members
407,000
409,000
405,000
407,000
Total Revenues ($M)
$1,105
$1,115
$4,410
$4,440
Medical Margin ($M)
$138
$148
$535
$560
Adjusted EBITDA ($M)
$2
$10
($3)
$25
Geography Entry Costs ($M)
$19
$16
$78
$65
Adjusted EBITDA contribution from ACO REACH is expected in a
range of $5 million to $10 million for 2023.
Membership reflects management’s outlook for end of period,
unless otherwise stated. agilon’s partnered ACO REACH Entities are
not consolidated within its financial results.
We have not reconciled guidance for Medical Margin to Gross
Profit or Adjusted EBITDA to net income (loss), the most comparable
GAAP measures, and have not provided forward-looking guidance for
net income (loss) in each case because of the uncertainty around
certain items that may impact Gross Profit or net income (loss),
including non-cash stock-based compensation.
Webcast and Conference Call:
agilon health will host a conference call to discuss first
quarter 2023 results on Tuesday, May 9, 2023, at 4:30 PM Eastern
Time. The conference call can be accessed by dialing (833) 470-1428
for U.S. participants and (929) 526-1599 for international
participants and referencing participant code 763252. A
simultaneous webcast can be accessed by visiting the “Events &
Presentations” section of agilon’s Investor Relations website at
https://investors.agilonhealth.com. A replay of the call will be
available via webcast for on-demand listening shortly after the
completion of the call.
About agilon health
agilon health is the trusted partner empowering physicians to
transform health care in our communities. Through our partnerships
and purpose-built platform, agilon is accelerating at scale how
physician groups transition to a value-based Total Care Model for
senior patients. agilon provides the technology, people, capital,
process, and access to a peer network of 2,700+ PCPs that allow
physician groups to maintain their independence and focus on the
total health of their most vulnerable patients. Together, agilon
and its physician partners are creating the healthcare system we
need – one built on the value of care, not the volume of fees. The
result: healthier communities and empowered doctors. agilon is the
trusted partner in 30+ diverse communities and is here to help more
of our nation's leading physician groups and health systems have a
sustained, thriving future. For more information visit
www.agilonhealth.com and connect with us on Twitter, Instagram,
LinkedIn and YouTube.
Forward-Looking Statements
Statements in this release that are not historical factual
statements are “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include, among other things, statements
regarding our and our officers’ intent, belief or expectation as
identified by the use of words such as “believes,” “expects,”
“may,” “will,” “shall,” “should,” “would,” “could,” “seeks,”
“aims,” “projects,” “is optimistic,” “intends,” “plans,”
“estimates,” “anticipates” or the negative versions of these words
or other comparable terms. Examples of forward-looking statements
include, among other things: statements regarding timing, outcomes
and other details relating to current, pending or contemplated new
markets, growth opportunities, ability to deliver sustainable
long-term value, business environment, long-term opportunities and
strategic growth plans, expected revenue and net income, total and
average membership, Adjusted EBITDA, Medical Margin, geography
entry costs and other financial projections and assumptions.
Forward-looking statements reflect our current expectations and
views about future events and are subject to risks and
uncertainties that could significantly affect our future financial
condition and results of operations. While forward-looking
statements reflect our good faith belief and assumptions we believe
to be reasonable based upon current information, we can give no
assurance that our expectations or forecasts will be attained.
Forward-looking statements are subject to known and unknown risks
and uncertainties, many of which may be outside our control. These
risks and uncertainties that could cause actual results and
outcomes to differ from those reflected in forward-looking
statements include, but are not limited to, those factors discussed
in our filings with the Securities and Exchange Commission (the
“SEC”), including the factors discussed under “Risk Factors” in our
Annual Report on Form 10-K for the fiscal year ended December 31,
2022, which can be found at the SEC’s website at www.sec.gov.
Except as required by law, we do not undertake, and hereby
disclaim, any obligation to update any forward-looking statements,
which speak only as of the date on which they are made.
agilon health, inc.
Consolidated Balance
Sheets
In thousands, except per share
data
March 31, 2023
December 31, 2022
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
394,190
$
497,070
Restricted cash and equivalents
10,204
10,610
Marketable securities
422,492
411,901
Receivables, net
1,004,856
497,574
Prepaid expenses and other current assets,
net
44,697
34,119
Total current assets
1,876,439
1,451,274
Property and equipment, net
22,132
20,050
Intangible assets, net
92,712
67,680
Goodwill
62,140
41,540
Other assets, net
116,846
116,924
Total assets
$
2,170,269
$
1,697,468
LIABILITIES AND STOCKHOLDERS’ EQUITY
(DEFICIT)
Current liabilities:
Medical claims and related payables
$
745,557
$
346,727
Accounts payable and accrued expenses
222,052
183,364
Current portion of long-term debt
5,000
5,000
Total current liabilities
972,609
535,091
Long-term debt, net of current portion
37,249
38,482
Other liabilities
78,571
83,286
Total liabilities
1,088,429
656,859
Commitments and contingencies
Stockholders' equity (deficit):
Common stock, $0.01 par value: 2,000,000
shares authorized; 414,465 and 412,385 shares issued and
outstanding, respectively
4,145
4,124
Additional paid-in capital
2,130,126
2,106,886
Accumulated deficit
(1,048,208
)
(1,064,230
)
Accumulated other comprehensive income
(loss)
(3,549
)
(5,560
)
Total agilon health, inc. stockholders'
equity (deficit)
1,082,514
1,041,220
Noncontrolling interests
(674
)
(611
)
Total stockholders’ equity (deficit)
1,081,840
1,040,609
Total liabilities and stockholders’ equity
(deficit)
$
2,170,269
$
1,697,468
agilon health, inc.
Consolidated Statements of
Operations
In thousands, except per share
data
(unaudited)
Three Months Ended March
31,
2023
2022
Revenues:
Medical services revenue
$
1,134,830
$
652,423
Other operating revenue
1,317
1,022
Total revenues
1,136,147
653,445
Expenses:
Medical services expense
972,827
566,208
Other medical expenses
86,024
44,773
General and administrative (including
noncash stock-based compensation expense of $13,672, and $3,970,
respectively)
66,846
39,834
Depreciation and amortization
4,189
3,373
Total expenses
1,129,886
654,188
Income (loss) from operations
6,261
(743
)
Other income (expense):
Other income (expense), net
9,472
2,269
Interest expense
(1,533
)
(871
)
Income (loss) before income
taxes
14,200
655
Income tax benefit (expense)
1,759
71
Income (loss) from continuing
operations
15,959
726
Total discontinued operations
—
429
Net income (loss)
15,959
1,155
Noncontrolling interests’ share in
(earnings) loss
63
75
Net income (loss) attributable to
common shares
$
16,022
$
1,230
Net income (loss) per common share,
basic and diluted
Continuing operations
$
0.04
$
—
Discontinued operations
$
—
$
—
Weighted average shares
outstanding
Basic
413,136
401,964
Diluted
426,586
424,065
agilon health, inc.
Consolidated Statements of
Cash Flows
In thousands
(unaudited)
Three Months Ended March
31,
2023
2022
Cash flows from operating
activities:
Net income (loss)
$
15,959
$
1,155
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
4,189
3,373
Stock-based compensation expense
13,672
3,970
Loss (income) from equity method
investments
(1,376
)
(2,033
)
Other non-cash items
(1,785
)
556
Changes in operating assets and
liabilities
(91,470
)
(30,254
)
Net cash provided by (used in) operating
activities
(60,811
)
(23,233
)
Cash flows from investing
activities:
Purchase of property and equipment,
net
(3,717
)
(4,049
)
Purchase of intangible assets
—
(1,000
)
Investment in loans receivable and
other
(1,301
)
(4,503
)
Investments in marketable securities
(29,969
)
—
Proceeds from maturities and sales of
marketable securities and other
28,540
683
Net cash paid in business combination
(44,367
)
—
Net cash provided by (used in) investing
activities
(50,814
)
(8,869
)
Cash flows from financing
activities:
Proceeds from other equity issuances,
net
9,589
14,756
Repayments of long-term debt
(1,250
)
(1,250
)
Net cash provided by (used in) financing
activities
8,339
13,506
Net increase (decrease) in cash, cash
equivalents and restricted cash and equivalents
(103,286
)
(18,596
)
Cash, cash equivalents and restricted
cash and equivalents, beginning of period
507,680
1,054,820
Cash, cash equivalents and restricted
cash and equivalents, end of period
$
404,394
$
1,036,224
agilon health, inc.
Key Operating Metrics
In thousands
(unaudited)
GROSS PROFIT
Three Months Ended March
31,
2023
2022
Total revenues
$
1,136,147
$
653,445
Medical services expense
(972,827
)
(566,208
)
Other medical expenses(1)
(86,024
)
(44,773
)
Gross profit
$
77,296
$
42,464
______________
(1)
Represents physician compensation expense
related to surplus sharing and other care management expenses that
help to create medical cost efficiency. Includes costs in
geographies that are in implementation and are not yet generating
revenue and investments to grow existing markets. For the three
months ended March 31, 2023 and 2022, costs incurred in
implementing geographies were $2.3 million and $0.2 million,
respectively.
Effective 2023, Network Contribution is replaced by Gross
Profit, which now incorporates other operating revenue and
geography entry costs included in other medical expenses. The
following table sets forth Gross Profit for the periods
indicated:
Three Months Ended During
2022
Year Ended
March 31,
June 30,
September 30,
December 31,
December 31, 2022
Total revenues
$
653,445
$
670,134
$
694,858
$
689,774
$
2,708,211
Medical services expense
(566,208
)
(587,140
)
(618,287
)
(628,163
)
(2,399,798
)
Other medical expenses(1)
(44,773
)
(49,080
)
(50,659
)
(51,615
)
(196,127
)
Gross profit
$
42,464
$
33,914
$
25,912
$
9,996
$
112,286
______________
(1)
Represents physician compensation expense
related to surplus sharing and other care management expenses that
help to create medical cost efficiency. Includes costs in
geographies that are in implementation and are not yet generating
revenue and investments to grow existing markets. For the three
months ended March 31, June 30, September 30, and December 31,
2022, costs incurred in implementing geographies were $0.2 million,
$3.5 million, $7.2 million, and $13.0 million, respectively. For
the year ended December 31, 2022, costs incurred in implementing
geographies were $23.9 million.
GENERAL AND ADMINISTRATIVE COSTS,
INCLUDING PLATFORM SUPPORT COSTS
Three Months Ended March
31,
2023
2022
Platform support costs
$
47,678
$
33,813
Geography entry costs(1)
9,250
3,804
Severance and related costs
188
1,702
Stock-based compensation expense
13,672
3,970
Other(2)
(3,942
)
(3,455
)
General and administrative
$
66,846
$
39,834
______________
(1)
Represents direct geography entry costs,
including investments to develop and expand our platform and costs
in geographies that are in implementation and are not yet
generating revenue and investments to grow existing markets.
(2)
Includes non-cash accruals for unasserted
claims and contingent liabilities.
Our platform support costs, which include regionally-based
support personnel and other operating costs to support our
geographies, are expected to decrease over time as a percentage of
revenue as our physician partners add members and our revenue
grows. Our operating expenses at the enterprise level include
resources and technology to support payor contracting, clinical
program development, quality, data management, finance and legal
functions.
agilon health, inc.
Non-GAAP Financial
Measures
In thousands
(unaudited)
MEDICAL MARGIN
Three Months Ended March
31,
2023
2022
Gross profit(1)
$
77,296
$
42,464
Other operating revenue
(1,317
)
(1,022
)
Other medical expenses
86,024
44,773
Medical margin
$
162,003
$
86,215
______________
(1)
Gross profit is defined as total revenues
less medical services expenses and other medical expense.
ADJUSTED EBITDA
Three Months Ended March
31,
2023
2022
Net income (loss)(1)
$
15,959
$
1,155
(Income) loss from discontinued
operations, net of income taxes
—
(429
)
Interest expense
1,533
871
Income tax expense (benefit)
(1,759
)
(71
)
Depreciation and amortization
4,189
3,373
Severance and related costs(2)
188
1,702
Stock-based compensation expense
13,672
3,970
EBITDA adjustments related to equity
method investments
1,967
1,171
Other(3)
(11,889
)
(3,697
)
Adjusted EBITDA
$
23,860
$
8,045
______________
(1)
Includes direct geography entry costs,
including investments to develop and expand our platform and costs
in geographies that are in implementation and are not yet
generating revenue and investments to grow existing markets. For
the three months ended March 31, 2023 and 2022, (i) $2.3 million
and $0.2 million, respectively, are included in other medical
expenses and (ii) $9.3 million and $3.8 million, respectively, are
included in general and administrative expenses.
(2)
For the three months ended March 31, 2022,
includes taxes and related costs on stock option exercises for
departed executives of $1.2 million.
(3)
Includes interest income and non-cash
accruals for unasserted claims and contingent liabilities.
Effective 2023, we no longer exclude geography entry costs from
our computation of Adjusted EBITDA. Adjusted EBITDA for prior
periods has been revised to the current period computation
methodology. The following table sets forth a reconciliation of net
income (loss) to Adjusted EBITDA using data derived from our
consolidated financial statements for the periods indicated:
Three Months Ended During
2022
Year Ended
March 31,
June 30,
September 30,
December 31,
December 31, 2022
Net income (loss)(1)
$
1,155
$
(20,731
)
$
(30,739
)
$
(56,549
)
$
(106,864
)
(Income) loss from discontinued
operations, net of income taxes
(429
)
(307
)
236
35
(465
)
Interest expense
871
945
1,000
1,709
4,525
Income tax expense (benefit)
(71
)
580
559
572
1,640
Depreciation and amortization
3,373
3,042
3,450
3,907
13,772
(Gain) loss on lease terminations
—
5,458
—
—
5,458
Severance and related costs
1,702
256
512
—
2,470
Stock-based compensation expense
3,970
6,553
7,907
9,951
28,381
EBITDA adjustments related to equity
method investments
1,171
492
1,325
749
3,737
Other
(3,697
)
1,033
(10,089
)
(3,391
)
(16,144
)
Adjusted EBITDA
$
8,045
$
(2,679
)
$
(25,839
)
$
(43,017
)
$
(63,490
)
(1)
Includes direct geography entry costs,
including investments to develop and expand our platform and costs
in geographies that are in implementation and are not yet
generating revenue and investments to grow existing markets. For
the three months ended March 31, June 30, September 30, and
December 31, 2022, costs included in other medical expenses were
$0.2 million, $3.5 million, $7.2 million, and $13.0 million,
respectively. For the year ended December 31, 2022, included in
other medical expenses were $23.9 million. For the three months
ended March 31, June 30, September 30, and December 31, 2022, costs
included general and administrative expenses were $3.8 million,
$6.6 million, $14.1 million, and $19.4 million, respectively. For
the year ended December 31, 2022, included in general and
administrative expenses were $43.9 million.
In addition to providing results that are determined in
accordance with GAAP, we present medical margin and Adjusted
EBITDA, which are non-GAAP financial measures.
We define medical margin as medical services revenue after
medical services expenses are deducted. Medical services expense
represents costs incurred for medical services provided to our
members. As our platform matures over time, we expect medical
margin to increase in absolute dollars. However, medical margin per
member per month (PMPM) may vary as the percentage of new members
brought onto our platform fluctuates. New membership added to the
platform is typically dilutive to medical margin PMPM. We believe
this metric provides insight into the economics of our capitation
arrangements as it includes all medical services expense directly
associated with our members’ care.
We define Adjusted EBITDA as net income (loss) adjusted to
exclude: (i) income (loss) from discontinued operations, net of
income taxes, (ii) interest expense, (iii) income tax expense
(benefit), (iv) depreciation and amortization, (v) stock-based
compensation expense, (vi) severance and related costs, and (vii)
certain other items that are not considered by us in the evaluation
of ongoing operating performance. We reflect our share of Adjusted
EBITDA for equity method investments by applying our actual
ownership percentage for the period to the applicable reconciling
items on an entity-by-entity basis.
Gross profit is the most directly comparable GAAP measure to
medical margin. Net income (loss) is the most directly comparable
GAAP measure to Adjusted EBITDA.
We believe medical margin and Adjusted EBITDA help identify
underlying trends in our business and facilitate evaluation of
period-to-period operating performance of our operations by
eliminating items that are variable in nature and not considered by
us in the evaluation of ongoing operating performance, allowing
comparison of our recurring core business operating results over
multiple periods. We also believe medical margin and Adjusted
EBITDA provide useful information about our operating results,
enhance the overall understanding of our past performance and
future prospects, and allow for greater transparency with respect
to key metrics we use for financial and operational
decision-making. We believe medical margin and Adjusted EBITDA or
similarly titled non-GAAP measures are widely used by investors,
securities analysts, ratings agencies, and other parties in
evaluating companies in our industry as a measure of financial
performance. Other companies may calculate medical margin and
Adjusted EBITDA or similarly titled non-GAAP measures differently
from the way we calculate these metrics. As a result, our
presentation of medical margin and Adjusted EBITDA may not be
comparable to similarly titled measures of other companies,
limiting their usefulness as comparative measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230509005892/en/
Investor Contact Matthew Gillmor VP, Investor Relations
investors@agilonhealth.com Media Contact Claire Mulhearn
Chief Communications & Public Affairs Officer
media@agilonhealth.com
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