Astrana Health, Inc. Q4 FY2024 earnings call

• Membership Growth: 2024 saw 55% membership growth in the care partner segment, driven by CFC conversion, acquisition of CHS, and organic growth.
• Risk Progression: By end-2024, ~73% of total capitation revenue came from full risk arrangements, with inpatient utilization in full risk business flat to slightly down on a mix and seasonality adjusted basis.
• Quality and Outcomes: ~three quarters of senior members received annual wellness visits; 8 affiliate provider groups recognized with 5 Star status. Medical cost trend was 5.3%, lower than national average.
• Care Enablement Platform: Partnership with PHL to support 10,000 Medicare Advantage members, investments in automation and AI for efficiency, expecting $10M in operational efficiencies by early 2026.
• Acquisitions: Announced CHS and Prospect Health acquisitions; CHS expected to contribute $350M-$400M in 2025, Prospect's non-physician assets filed for bankruptcy but transaction still expected in Q2 2025.

In the fourth quarter, Astrana Health delivered total revenue of $665.2 million, an 88.4% increase year-over-year, and adjusted EBITDA of $35.0 million, a 20.8% growth. For the full year 2024, total revenue was $2.03 billion, a 47% increase from the prior year, and adjusted EBITDA reached $170.4 million, up 16.2% year-over-year. The Care Partners segment was the primary driver, growing 52% year-over-year to $1.95 billion, contributing significantly to the top-line growth. Revenue contribution: Care Partners segment was the largest contributor to total revenue.

• Full year 2025 revenue expected $2.5B-$2.7B, adjusted EBITDA $170M-$190M.
• Q1 2025 revenue $600M-$650M, adjusted EBITDA $32M-$37M.
• Medium term adjusted EBITDA guidance of at least $350M in 2027. Assumes mid-single digit cost trend, $15M in integration/automation costs, 75%-85% revenue from full risk arrangements in 2025.

• Medicaid trend running hotter than expected, impact on earnings; uncertainty around Medicaid reimbursement cuts.
• Wildfires and flu activity could impact utilization, but no material impact anticipated.
• Integration costs and slower rate adjustments relative to trend could impact margins.

Q: On adjusted EBITDA guide, dive into puts and takes.

A: Chan Basho discussed assumptions on trend and investments.

Q: Medicaid trend and upside driver.

A: Brandon Sim talked about Medicaid trends and conservative guidance.

Q: Houston and Las Vegas margins.

A: Brandon Sim provided updates on Nevada and Texas markets ramping within expectations.

Q: Prospect margins at maturity.

A: Brandon Sim discussed expected margins for Prospect at scale.

Q: AI savings and newer markets.

A: Brandon Sim talked about AI investments and operational playbook for new markets.