Agilon Health, Inc. Q4 FY2024 earnings call

Actions taken in 2024 include reducing Part D exposure, pursuing measured growth, strengthening clinical capabilities, and maintaining cost discipline. 2025 focus on constrained MA membership, enhancing clinical strategy by connecting opportunities across programs, payor strategy to minimize non - controllable risks and maximize rewards for controllable areas, enhancing core clinical capabilities with technology and medical directors, and maintaining cost discipline while investing in relevant areas.

Fourth quarter MA membership increased 36% YoY to 527,000 members, ACO model membership was 132,000. Total revenue in Q4 was $1.52 billion, full year $6.06 billion. Medical margin in Q4 was $1 million, full year $205 million. Adjusted EBITDA in Q4 was -$84 million, full year -$154 million. 2025 guidance: MA membership expected to decline ~4% to 490,000 - 520,000, revenue forecasted to decline 2% to $5.925 billion, medical margin expected to improve to $300 million midpoint, adjusted EBITDA expected to be -$75 million midpoint.

2025 MA membership projected to decline ~4% to 490,000 - 520,000. Revenue forecasted to be $5.83 billion - $6.03 billion. Medical margin expected to be $275 million - $325 million. Adjusted EBITDA expected to be -$75 million midpoint. First quarter 2025 guidance: MA membership 490,000 - 510,000, revenue $1.48 billion - $1.52 billion, medical margin $125 million - $140 million, adjusted EBITDA $10 million - $25 million.

Medicare Advantage market has elevated cost trend, transition to V28, impacts of Inflation Reduction Act, increased quality bonus thresholds, partnership exits, multiple December 2024 payor contract terminations, tighter attribution management with health plans.

Q: Just wanted to ask a little bit about some of the changes you're making to Part D and the contracting there for 2025.

A: Steven Sell and Jeffrey Schwaneke discussed reducing Part D exposure to less than 30% of membership, Part D being a loss, and doubling PMPM loss for remaining members in 2025; Q: Could you talk a little bit about the year 1 performance this year versus what you're expecting or I should say in '24, what you're expecting for '25 there? And then also, can you talk a little bit about how you're thinking about the potential for a class of '26 which you typically have visibility on at this point in time?

A: Steven Sell talked about strong year 1 performance of class of '24, class of '25 is smaller with care management fee no downside construct, and class of '26 has letters of intent, with focus on measured growth; etc.