AGL

New CEO Strategic Priorities

• New CEO Tim O'Rourke joined in early May 2026, has completed 90 days of stakeholder engagement with physician partners, payers, and internal teams, and reaffirmed Agilon's core mission: empowering community-based primary care physicians to transform senior healthcare by improving outcomes, enhancing patient experience, and reducing total cost of care.
• Transformation efforts are centered on three core priorities:
  • Drive stronger clinical and operational performance across all markets via more consistent execution and deeper physician engagement
  • Enhance data infrastructure, real-time clinical insights, and risk management capabilities to improve care delivery and financial predictability
  • Build a more scalable operating model that maintains local market expertise while increasing support efficiency for physician partners

Clinical Program Progress

• The Burden of Illness program, which supports complete, accurate diagnosis coding, delivered stronger-than-expected performance, driving higher risk-adjusted revenue. The enhanced data pipeline now provides earlier intra-quarter visibility into risk adjustment data from payers, validated against official MAO4 and MMR datasets.
• Evidence-based clinical pathway deployment is advancing: the CHF (Congestive Heart Failure) pathway is live across 90% of markets, and has reduced first-time inpatient CHF diagnosis rates from ~25% to under 5%, demonstrating the model's clinical impact. The company is expanding integrated pharmacy programs for CHF to improve appropriate medication adherence, and is on track to roll out the dementia clinical pathway to multiple markets by end of 2026, alongside continued expansion of the COPD and lung health pathways.
• AI is being invested in as a force multiplier (not a replacement) for physicians, to reduce administrative burden, improve workflow efficiency, deliver deeper clinical insights, and enable evidence-based interventions for high-acuity patients.

ACO Model Growth Opportunities

• Agilon's 2024 performance year ACO REACH results delivered $229 million in gross savings and an average quality score of 96% across 8 ACOs, establishing a strong performance foundation for 2027.
• The 2027 Medicare Shared Savings Program and new ACO LEAD model are seen as high-impact opportunities to further align incentives around quality, affordability, and patient-centered care, with the company evaluating paths for both existing and new ACO partners.

• Full year 2026 guidance was revised upward across all key metrics, driven by stronger-than-expected Q2 performance, improved medical cost trend visibility, and outperformance of the Burden of Illness diagnosis program. The midpoint of the new full-year 2026 guidance ranges are: ~$5.8 billion in total revenue, ~$485 million in medical margin, and ~$85 million in adjusted EBITDA.
• Full year 2026 ACO REACH adjusted EBITDA is guided to between $25 million and $30 million, consistent with prior expectations. Guidance assumes a prudent 7% medical cost trend for the second half of 2026, and incorporates the full impact of the upwardly revised 3% year-over-year risk adjustment increase (net of V28 impact).
• For Q3 2026, the midpoint of guidance is ~$1.46 billion in revenue, ~$110 million in medical margin, and break-even adjusted EBITDA, reflecting typical seasonality of higher earnings in the first half of the year for Agilon's business model.
• The company reaffirmed its expectation of ending 2026 with at least $125 million in on-balance sheet cash.

Agilon Health reports two primary membership segments for the quarter: 1) Medicare Advantage: Ending Q2 2026 membership was 437,000, down from 498,000 in Q2 2025, reflecting the company's disciplined profitability-focused contracting approach. This segment generated the vast majority of total Q2 2026 revenue of $1.5 billion (up from $1.4 billion YoY), with overall revenue growth offsetting membership declines driven by improved CMS benchmark rates, favorable payer contracting, and higher risk-adjusted revenue from more complete diagnosis coding. 2) ACO REACH: Ending Q2 2026 membership was 112,000, down from 116,000 YoY. This segment contributed $7 million to Q2 2026 adjusted EBITDA, which is 10% of total adjusted EBITDA for the quarter, in line with guidance. Total Q2 2026 company-wide medical margin was $197 million (vs -$53 million YoY), and total adjusted EBITDA was $70 million (vs -$83 million YoY).

No new material standalone risks were discussed in the call beyond standard disclosures that forward-looking statements are subject to material risks and uncertainties detailed in the company's SEC filings. Key inherent uncertainties noted include limited paid claims visibility for recent quarters that requires prudent reserving, and ongoing Part D risk exposure that the company is actively working to reduce.

Q: What is the growth strategy for the next phase, will growth focus on existing markets or new markets, and what thresholds are required for new market investment? / A: Management will remain focused on executing and strengthening the foundation of existing markets, where multiple organic growth opportunities already exist. These include converting existing care coordination fee contracts to full risk, reengaging on payer contracts that could not be agreed to in 2026, expanding ACO relationships for the new 2027 LEAD and MSSP models, and growing existing agent sales channels in current markets. New market entry will remain disciplined and measured for the near term, with any new market growth expected to impact results no earlier than 2028, given the 12 to 18 month implementation timeline for new markets. Demand for the Agilon model remains strong with consistent inbound interest from potential new partners.

Q: The 3% YoY risk adjustment uplift this quarter was much stronger than prior estimates. How much of this is repeatable, and what conditions are driving the improvement? / A: The 3% uplift is primarily driven by the ramp of clinical and diagnosis programs that rolled out throughout 2025, with results back-loaded into the end of the year that are now being captured as claims data becomes available. While the full 3% uplift is not expected to repeat annually, the improved diagnosis process will deliver a net positive RAF contribution to 2027 results, just at a lower level than 2026. This improvement also aligns with clinical pathway goals: earlier diagnosis of high-risk conditions (such as CHF) enables earlier intervention, reduces avoidable hospital admissions, and improves patient outcomes.

Q: What medical cost trend components are showing moderation, and what assumptions are embedded in the updated full-year guidance? / A: Moderation is most noticeable in inpatient, surgical, and ER utilization trends, which are still high by historical standards but have declined from the higher levels seen in 2025, consistent with commentary from other large managed care organizations. In addition to macro moderation, Agilon's own clinical programs, data-driven interventions, and earlier patient identification are also contributing to lower unnecessary utilization. Full-year guidance assumes a 7% medical cost trend for the second half of 2026, with Q2 2026 also recorded at a low 7% trend as a prudent reserve given limited paid claims data available at quarter-end.

Q: What is the current progress of the enhanced data pipeline, and is there additional upside from expanding the pipeline further? / A: The enhanced data pipeline already includes over 80% of Agilon's payers, with deployment focused on the largest payers first before moving to smaller payers. Progress will slow slightly moving forward because remaining payers are smaller and more numerous, but the company will continue onboarding additional payers to the pipeline to expand visibility and performance. The enhanced pipeline has already delivered material improvements in risk adjustment forecasting and early clinical insights.