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agilon health Reports Third Quarter 2024 Results

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agilon health reported Q3 2024 results with revenue increasing 28% to $1.45 billion. Medicare Advantage membership grew 37% to 525,000, while total platform members increased 39% to 657,000. The quarter was impacted by challenges including $60 million in prior year development costs, $65 million reduction in 2024 risk adjustment, and $25 million in higher medical expenses. The company reported a gross profit loss of $64 million and a net loss of $118 million. In response, agilon plans to exit two unprofitable partnerships and certain payor contracts by end of 2024. The company updated its full-year 2024 guidance, reflecting Q3 results and revised Q4 cost trends.

Agilon Health ha riportato i risultati del terzo trimestre 2024, con ricavi in crescita del 28%, arrivando a 1,45 miliardi di dollari. L'adesione al programma Medicare Advantage è aumentata del 37%, raggiungendo 525.000 membri, mentre il numero totale dei membri della piattaforma è aumentato del 39%, arrivando a 657.000. Il trimestre è stato colpito da sfide, tra cui 60 milioni di dollari in costi di sviluppo dell'anno precedente, una riduzione di 65 milioni di dollari nell'aggiustamento del rischio per il 2024 e 25 milioni di dollari in spese mediche più elevate. L'azienda ha registrato una perdita di profitto lordo di 64 milioni di dollari e una perdita netta di 118 milioni di dollari. In risposta, Agilon prevede di uscire da due partnership non redditizie e da alcuni contratti con i pagatori entro la fine del 2024. L'azienda ha aggiornato le proprie previsioni per l'intero anno 2024, riflettendo i risultati del terzo trimestre e le tendenze dei costi del quarto trimestre riviste.

Agilon Health reportó resultados del tercer trimestre de 2024, con ingresos que aumentaron un 28%, alcanzando 1.45 mil millones de dólares. La membresía de Medicare Advantage creció un 37%, llegando a 525,000 miembros, mientras que el número total de miembros de la plataforma aumentó un 39%, alcanzando 657,000. El trimestre se vio afectado por desafíos, incluidos 60 millones de dólares en costos de desarrollo del año anterior, una reducción de 65 millones de dólares en el ajuste de riesgo para 2024 y 25 millones de dólares en mayores gastos médicos. La compañía reportó una pérdida de utilidad bruta de 64 millones de dólares y una pérdida neta de 118 millones de dólares. En respuesta, Agilon planea salir de dos asociaciones no rentables y ciertos contratos con pagadores para finales de 2024. La compañía actualizó su guía para todo el año 2024, reflejando los resultados del tercer trimestre y las tendencias de costos revisadas del cuarto trimestre.

Agilon Health는 2024년 3분기 결과를 보고하며 수익이 28% 증가하여 14억 5천만 달러에 도달했다고 발표했습니다. Medicare Advantage 회원 수는 37% 증가하여 525,000명이 되었고, 플랫폼의 총 회원 수는 39% 증가하여 657,000명이 되었습니다. 이번 분기는 지난해 발전 비용 6천만 달러, 2024년 위험 조정 6천5백만 달러 감소, 의료비 증가 2천5백만 달러 등으로 어려움이 있었습니다. 회사는 6천4백만 달러의 총 이익 손실과 1억 1천8백만 달러의 순 손실을 기록했습니다. 이에 따라 Agilon은 2024년 말까지 두 개의 수익성이 없는 파트너십과 일부 지급자 계약을 종료할 계획입니다. 이 회사는 3분기 결과와 4분기 비용 트렌드 수정 내용을 반영하여 2024년 전체 연도 가이드를 업데이트했습니다.

Agilon Health a annoncé ses résultats du troisième trimestre 2024, avec des revenus en hausse de 28 %, atteignant 1,45 milliard de dollars. L'adhésion au programme Medicare Advantage a augmenté de 37 %, atteignant 525 000 membres, tandis que le nombre total de membres de la plateforme a augmenté de 39 %, atteignant 657 000. Le trimestre a été impacté par des défis, notamment 60 millions de dollars de frais de développement de l'année précédente, une réduction de 65 millions de dollars dans l'ajustement du risque pour 2024 et 25 millions de dollars de dépenses médicales accrues. La société a enregistré une perte de bénéfice brut de 64 millions de dollars et une perte nette de 118 millions de dollars. En réponse, Agilon prévoit de sortir de deux partenariats non rentables et de certains contrats de payeurs d'ici la fin de 2024. L'entreprise a mis à jour ses prévisions pour l'année entière 2024, reflétant les résultats du troisième trimestre et les tendances des coûts révisées du quatrième trimestre.

Agilon Health berichtete über die Ergebnisse des dritten Quartals 2024, mit einem Umsatzanstieg von 28 % auf 1,45 Milliarden Dollar. Die Mitgliedschaft im Medicare Advantage-Programm wuchs um 37 % auf 525.000, während die Gesamtzahl der Plattformmitglieder um 39 % auf 657.000 anstieg. Das Quartal war von Herausforderungen geprägt, darunter 60 Millionen Dollar an Entwicklungskosten aus dem Vorjahr, eine Reduzierung von 65 Millionen Dollar bei der Risikoeinstellung für 2024 und 25 Millionen Dollar an höheren medizinischen Ausgaben. Das Unternehmen meldete einen Verlust beim Bruttogewinn von 64 Millionen Dollar und einen Nettoverlust von 118 Millionen Dollar. Als Reaktion plant Agilon, bis Ende 2024 aus zwei unrentablen Partnerschaften und bestimmten Zahlungsgeberverträgen auszusteigen. Das Unternehmen aktualisierte seine Jahresprognose für 2024, um die Ergebnisse des dritten Quartals und die überarbeiteten Kostentrends für das vierte Quartal zu berücksichtigen.

Positive
  • Revenue growth of 28% YoY to $1.45 billion
  • Medicare Advantage membership increased 37% YoY
  • Total platform members grew 39% to 657,000
  • Strong cash position with $399 million in cash and marketable securities
Negative
  • Q3 gross profit loss of $64 million compared to $37 million profit in Q3 2023
  • Net loss increased to $118 million from $31 million in Q3 2023
  • $60 million negative prior year development costs
  • $65 million reduction in 2024 risk adjustment estimates
  • $25 million increase in current year medical expenses
  • Downward revision of full-year 2024 guidance
  • Planning to exit two unprofitable partnerships

Insights

The Q3 results reveal significant operational challenges at agilon health. $1.45 billion in revenue (+28%) was overshadowed by concerning developments: a negative gross profit of $64 million, compared to positive $37 million last year and a widening net loss of $118 million.

Three major headwinds impacted performance: $60 million in prior year adjustments, $65 million reduction in 2024 risk adjustment estimates and $25 million in higher medical expenses. The medical margin turned negative at $58 million, a dramatic $169 million swing year-over-year.

The decision to exit unprofitable partnerships indicates structural issues in their business model. While membership growth remains strong at 37%, the deteriorating financial metrics and lowered guidance suggest fundamental challenges in cost management and revenue optimization.

The results highlight broader challenges in the Medicare Advantage space. Despite growing their member base to 525,000 MA members, agilon's struggles with risk adjustment and medical costs point to industry-wide pressures. The substantial downward revision in full-year medical margin guidance from $400-450 million to $210-240 million suggests systemic issues in accurately predicting healthcare utilization and costs.

The strategic decision to exit certain partnerships and contracts demonstrates the difficulties in achieving profitability in full-risk Medicare Advantage models. This restructuring, while painful short-term, could help stabilize operations for 2025, though execution risks remain high given the challenging Medicare Advantage environment.

Revenue increased 28% to $1.45 billion, Medicare Advantage membership increased 37% to 525,000, and total members on the agilon platform grew 39% to 657,000

Third quarter results were affected by lower-than-expected 2024 risk adjustment, negative prior year development mainly from risk adjustment and Part D, and higher current year medical expenses

Adjusted full year guidance reflects Q3 results and updated Q4 cost trends

AUSTIN, Texas--(BUSINESS WIRE)-- agilon health, inc. (NYSE: AGL), the trusted partner empowering physicians to transform health care in our communities, today announced results for the third quarter ended September 30, 2024.

“Our full-risk model enables primary care physicians to deliver high-quality care to their senior patients. Our Q3 results show that our membership is growing across our 26 partnerships, and it also highlights why we are taking necessary actions to strengthen execution within our platform and proactively manage the challenging Medicare Advantage environment,” said Steve Sell, chief executive officer. “Against that backdrop, we have initiated steps with select partners to exit two unprofitable partnerships and other payor contracts by the end of 2024. While the overall Medicare Advantage environment will eventually realign, it is important that we take these actions in the interim to strengthen the run-rate for our business into 2025 and better position our platform and network for long-term success.”

Third Quarter 2024 Results:

  • Compared to previous guidance, third quarter 2024 gross profit and medical margin was negatively impacted as a result of additional information received from payors in the third quarter. This included prior year development of $60 million primarily related to risk adjustment revenue and Part D medical expense; a reduction of estimated 2024 risk adjustment of $65 million; and higher current year medical expense of $25 million primarily in the third quarter.
  • Total members on the agilon platform increased to 657,000 as of September 30, 2024, comprising 525,000 Medicare Advantage members and 132,000 ACO model beneficiaries. Medicare Advantage membership increased 37% year-over-year, with 4.8% growth in same-partner geographies.
  • Total revenue of $1.45 billion in the third quarter 2024 increased 28% compared to $1.14 billion in the third quarter 2023. Year-over-year total revenue growth was primarily driven by membership growth in new markets and same geography growth.
  • Gross profit was negative $64 million in the third quarter 2024 compared to positive $37 million in the third quarter 2023. Net loss was $118 million in the third quarter 2024 compared to a net loss of $31 million in the third quarter 2023. The year-over-year reduction in gross profit and higher net losses resulted from the factors discussed above.
  • Medical margin was negative $58 million during the third quarter 2024, compared to $111 million for the same period 2023. The $169 million year-over-year medical margin reduction also resulted from the factors mentioned above.
  • Adjusted EBITDA loss was $96 million in the third quarter 2024 compared to positive $6 million for the same period in 2023. The year-over-year change is attributable to the factors discussed above.

Key Financial and Operating Metrics ($M):

(Third Quarter 2024 vs. 2023)

 

 

Three Months
Ended September 30,

 

 

Change

 

2024

 

2023

 

% YoY

Medicare Advantage Members1

525,000

 

384,000

 

37%

ACO Model Members1, 2

132,000

 

88,000

 

51%

Total Members Live on Platform1, 2

657,000

 

472,000

 

39%

Avg. Medicare Advantage Members

535,000

 

389,000

 

38%

Total revenues

$1,451

 

$1,137

 

28%

Gross Profit

($64)

 

$37

 

NM

Medical Margin

($58)

 

$111

 

(153%)

Net (Loss) Income

($118)

 

($31)

 

NM

Adjusted EBITDA3

($96)

 

$6

 

NM

Geography Entry Costs

$7

 

$18

 

(60%)

  1. Membership metrics reflect end of period results.
  2. agilon’s ACO model entities are not included within its consolidated financial results.
  3. agilon’s ACO model entities contributed $12 million to Adjusted EBITDA during the third quarter 2024 and $18 million in third quarter 2023.

Capital Position and Balance Sheet:

agilon health’s balance sheet as of September 30, 2024 included cash, cash equivalents and marketable securities of $399 million and total debt of $35 million. At the end of the quarter agilon health had $113 million of cash associated with the Company’s unconsolidated ACO model entities.

Outlook for Fiscal Year 2024 ($M):

Guidance below includes results from the third quarter 2024 and updated cost trends for the fourth quarter 2024. Medical margin guidance below includes approximately $100 million of negative prior period development. Guidance for fiscal year 2024 does not reflect the impact of actions the Company is currently undertaking or plans to take before the close of the fiscal year.

Year Ended December 31, 2024

Updated Guidance

Previous Guidance

Low

High

Low

High

Medicare Advantage Members1

526,000

 

528,000

 

518,000

 

520,000

ACO Model Members1,2

127,000

 

129,000

 

123,000

 

128,000

Total Members Live on Platform1

653,000

 

657,000

 

641,000

 

648,000

Avg. Medicare Advantage Members

522,000

 

522,000

 

513,000

 

514,000

Total Revenues

$6,050

 

$6,065

 

$6,010

 

$6,040

Medical Margin

$210

 

$240

 

$400

 

$450

Adjusted EBITDA3

($155)

 

($135)

 

($60)

 

($15)

Geography Entry Costs4

$37

 

$33

 

$55

 

$45

  1. Membership reflects management’s outlook for end of period.
  2. agilon’s partnered ACO model entities are not consolidated within its financial results.
  3. Adjusted EBITDA contribution from ACO model is expected to be approximately $38 million for fiscal year 2024.
  4. Geography Entry Costs represent the corresponding expense included in the low-end and high-end of management’s outlook for adjusted EBITDA.

Outlook for Fourth Quarter 2024 ($M):

 

Quarter Ended
December 31, 2024

Low

High

Medicare Advantage Members1

526,000

 

528,000

ACO Model Members1,2

127,000

 

129,000

Total Members Live on Platform1

653,000

 

657,000

Avg. Medicare Advantage Members

526,000

 

527,000

Total Revenues

$1,512

 

$1,527

Medical Margin

$5

 

$35

Adjusted EBITDA3

($85)

 

($65)

Geography Entry Costs4

$14

 

$10

  1. Membership reflects management’s outlook for end of period.
  2. agilon’s partnered ACO model entities are not consolidated within its financial results.
  3. Adjusted EBITDA contribution from ACO model is expected to be approximately $5 million for the fourth quarter 2024.
  4. Geography Entry Costs represent the corresponding expense included in the low-end and high-end of management’s outlook for adjusted EBITDA.

The Company has not reconciled guidance for medical margin to gross profit or adjusted EBITDA to net income (loss), the most comparable GAAP measures, and has 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 third quarter 2024 results on Thursday, November 7, 2024 at 4:30 PM Eastern Time. The conference call can be accessed by dialing (833) 470-1428 for U.S. participants and +1 (404) 975-4839 for international participants and referencing participant code 520026. A simultaneous listen-only, live 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 and health systems transition to a value-based Total Care Model for their senior patients. agilon provides the technology, people, capital, process, and access to a peer network of 2,800+ PCPs that allow its physician partners 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 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 our expectations related to operating and financial results, our ability to negotiate more favorable economic terms in our payor contracts, the value of and demand for our full-risk model for primary care physicians, the strengthening of our value proposition to physicians and payers, our ability to efficiently exit unprofitable markets, and our long-term opportunities and strategic growth plans and alignment with the macro environment, expected revenue, medical costs, net income and gross profit, total and average membership, Adjusted EBITDA, Medical Margin, geography entry costs and other financial projections and assumptions, including our fiscal year and third quarter 2024 guidance. 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: our history of net losses and the expectation that our expenses will increase in the future; failure to identify and develop successful new geographies, physician partners and payors, or execute upon our growth initiatives; success in executing our operating strategies or achieving results consistent with our historical performance; medical expenses incurred on behalf of our members may exceed revenues we receive; our ability to secure contracts with Medicare Advantage payors; our ability to grow new physician partner relationships sufficient to recover startup costs; availability of additional capital, on acceptable terms or at all, to support our business in the future; significant reduction in our membership; transition to a Total Care Model may be challenging for physician partners; public health crises, such as COVID-19, could adversely affect us; inaccuracy in estimates of our members’ risk adjustment factors, medical services expense, incurred but not reported claims, and earnings pursuant to payor contracts; the impact of restrictive clauses or exclusivity provisions in some of our contracts with physician partners; our ability to hire and retain qualified personnel; our ability to realize the full value of our intangible assets; security breaches, cybersecurity attacks, loss of data and other disruptions to our information systems; our ability to protect the confidentiality of our know-how and other proprietary and internally developed information; reliance on our subsidiaries; Environmental, Social, and Governance issues; reliance on a limited number of key payors; the limited terms of contracts with our payors and our ability to renew them upon expiration; our ability to navigate the changing healthcare payor market reliance on our payors, physician partners and other providers to operate our business; our ability to obtain accurate and complete diagnosis data; reliance on third-party software, data, infrastructure and bandwidth; consolidation and competition in the healthcare industry; the impact of changes to, and dependence on, federal government healthcare programs; uncertain or adverse economic and macroeconomic conditions, including a downturn or decrease in government expenditures; regulation of the healthcare industry and our and our physician partners’ ability to comply with such laws and regulations; federal and state investigations, audits and enforcement actions; repayment obligations arising out of payor audits; negative publicity regarding the managed healthcare industry generally; our use, disclosure and processing of personally identifiable information, protected health information, and de-identified data; failure to obtain or maintain an insurance license, a certificate of authority or an equivalent authorization; lawsuits not covered by insurance; changes in tax laws and regulations, or changes in related judgments or assumptions; our indebtedness and our potential to incur more debt; dependence on our subsidiaries for cash to fund all of our operations and expenses; provisions in our governing documents; ability to achieve a return on your investment depends on appreciation in the price of our common stock; the material weakness in our internal control over financial reporting and our ability to remediate such material weakness; and risks related to other 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, 2023, 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.

Condensed Consolidated Balance Sheets

In thousands, except per share data

 

 

September 30,
2024

 

December 31,
2023

 

(unaudited)

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

148,161

 

 

$

107,570

 

Restricted cash and equivalents

 

5,629

 

 

 

6,759

 

Marketable securities

 

244,766

 

 

 

380,773

 

Receivables, net

 

1,368,349

 

 

 

942,461

 

Prepaid expenses and other current assets, net

 

44,854

 

 

 

42,513

 

Total current assets

 

1,811,759

 

 

 

1,480,076

 

Property and equipment, net

 

28,194

 

 

 

27,576

 

Intangible assets, net

 

73,412

 

 

 

63,769

 

Goodwill

 

24,133

 

 

 

24,133

 

Other assets

 

153,913

 

 

 

145,312

 

Total assets

$

2,091,411

 

 

$

1,740,866

 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

 

 

 

Current liabilities:

 

 

 

Medical claims and related payables

$

1,190,665

 

 

$

737,724

 

Accounts payable, accrued expenses and other

 

218,492

 

 

 

239,432

 

Total current liabilities

 

1,409,157

 

 

 

977,156

 

Long-term debt, net of current portion

 

34,884

 

 

 

32,308

 

Other liabilities

 

72,498

 

 

 

70,381

 

Total liabilities

 

1,516,539

 

 

 

1,079,845

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders' equity (deficit):

 

 

 

Common stock, $0.01 par value: 2,000,000 shares authorized; 411,960 and 406,387 shares issued and outstanding, respectively

 

4,120

 

 

 

4,064

 

Additional paid-in capital

 

2,051,638

 

 

 

1,986,899

 

Accumulated deficit

 

(1,481,187

)

 

 

(1,326,826

)

Accumulated other comprehensive income (loss)

 

301

 

 

 

(2,298

)

Total agilon health, inc. stockholders' equity (deficit)

 

574,872

 

 

 

661,839

 

Noncontrolling interests

 

 

 

 

(818

)

Total stockholders’ equity (deficit)

 

574,872

 

 

 

661,021

 

Total liabilities and stockholders’ equity (deficit)

$

2,091,411

 

 

$

1,740,866

 

agilon health, inc.

Condensed Consolidated Statements of Operations

In thousands, except per share data

(unaudited)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

Medical services revenue

$

1,447,697

 

 

$

1,133,457

 

 

$

4,528,471

 

 

$

3,253,810

 

Other operating revenue

 

3,235

 

 

 

3,406

 

 

 

9,573

 

 

 

6,480

 

Total revenues

 

1,450,932

 

 

 

1,136,863

 

 

 

4,538,044

 

 

 

3,260,290

 

Expenses:

 

 

 

 

 

 

 

Medical services expense

 

1,505,950

 

 

 

1,022,871

 

 

 

4,323,852

 

 

 

2,853,266

 

Other medical expenses

 

9,149

 

 

 

77,153

 

 

 

171,096

 

 

 

242,486

 

General and administrative (including noncash stock-based compensation expense of $13,259, $20,619, $48,375, and $53,650, respectively)

 

63,123

 

 

 

72,058

 

 

 

209,157

 

 

 

221,064

 

Depreciation and amortization

 

6,218

 

 

 

4,075

 

 

 

17,969

 

 

 

11,308

 

Total expenses

 

1,584,440

 

 

 

1,176,157

 

 

 

4,722,074

 

 

 

3,328,124

 

Income (loss) from operations

 

(133,508

)

 

 

(39,294

)

 

 

(184,030

)

 

 

(67,834

)

Other income (expense):

 

 

 

 

 

 

 

Income (loss) from equity method investments

 

2,047

 

 

 

14,659

 

 

 

17,686

 

 

 

24,507

 

Other income (expense), net

 

16,061

 

 

 

5,423

 

 

 

26,794

 

 

 

20,402

 

Interest expense

 

(1,622

)

 

 

(1,617

)

 

 

(4,603

)

 

 

(4,665

)

Income (loss) before income taxes

 

(117,022

)

 

 

(20,829

)

 

 

(144,153

)

 

 

(27,590

)

Income tax benefit (expense)

 

590

 

 

 

(1,210

)

 

 

306

 

 

 

(524

)

Income (loss) from continuing operations

 

(116,432

)

 

 

(22,039

)

 

 

(143,847

)

 

 

(28,114

)

Discontinued operations:

 

 

 

 

 

 

 

Income (loss) before gain (loss) on sales

 

(1,183

)

 

 

(9,444

)

 

 

(1,701

)

 

 

(4,205

)

Gain (loss) on sales of assets, net

 

 

 

 

 

 

 

(8,763

)

 

 

 

Total discontinued operations

 

(1,183

)

 

 

(9,444

)

 

 

(10,464

)

 

 

(4,205

)

Net income (loss)

 

(117,615

)

 

 

(31,483

)

 

 

(154,311

)

 

 

(32,319

)

Noncontrolling interests’ share in (earnings) loss

 

 

 

 

47

 

 

 

(50

)

 

 

156

 

Net income (loss) attributable to common shares

$

(117,615

)

 

$

(31,436

)

 

$

(154,361

)

 

$

(32,163

)

 

 

 

 

 

 

 

 

Net income (loss) per common share, basic and diluted

 

 

 

 

 

 

 

Continuing operations

$

(0.29

)

 

$

(0.06

)

 

$

(0.35

)

 

$

(0.07

)

Discontinued operations

$

 

 

$

(0.02

)

 

$

(0.03

)

 

$

(0.01

)

Weighted average shares outstanding

 

 

 

 

 

 

 

Basic

 

411,591

 

 

 

405,787

 

 

 

410,604

 

 

 

412,077

 

Diluted

 

411,591

 

 

 

405,787

 

 

 

410,604

 

 

 

412,077

 

agilon health, inc.

Condensed Consolidated Statements of Cash Flows

In thousands

(unaudited)

 

 

Nine Months Ended September 30,

 

2024

 

2023

Cash flows from operating activities:

 

 

 

Net income (loss)

$

(154,311

)

 

$

(32,319

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

Depreciation and amortization

 

17,969

 

 

 

15,014

 

Stock-based compensation expense

 

48,375

 

 

 

53,980

 

Loss (income) from equity method investments

 

(17,686

)

 

 

(24,507

)

Distributions of earnings from equity method investments

 

3,340

 

 

 

 

(Gain) loss on sale of assets, net

 

3,784

 

 

 

 

Other noncash items

 

(491

)

 

 

(1,511

)

Changes in operating assets and liabilities:

 

24,824

 

 

 

(105,690

)

Net cash provided by (used in) operating activities

 

(74,196

)

 

 

(95,033

)

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(9,985

)

 

 

(11,898

)

Purchase of intangible assets

 

(18,877

)

 

 

(3,535

)

Investment in loans receivable and other

 

(9,742

)

 

 

(8,778

)

Investments in marketable securities

 

(12,006

)

 

 

(107,020

)

Proceeds from maturities of marketable securities and other

 

166,828

 

 

 

133,894

 

Net cash paid in business combination

 

 

 

 

(44,479

)

Net cash provided by (used in) investing activities

 

116,218

 

 

 

(41,816

)

Cash flows from financing activities:

 

 

 

Proceeds from equity issuances, net

 

1,189

 

 

 

11,462

 

Common stock repurchase

 

 

 

 

(200,000

)

Repayments of long-term debt

 

(3,750

)

 

 

(3,750

)

Net cash provided by (used in) financing activities

 

(2,561

)

 

 

(192,288

)

Net increase (decrease) in cash, cash equivalents and restricted cash and equivalents

 

39,461

 

 

 

(329,137

)

Cash, cash equivalents and restricted cash and equivalents from continuing operations, beginning of period

 

114,329

 

 

 

475,912

 

Cash, cash equivalents and restricted cash and equivalents from discontinued operations, beginning of period

 

 

 

 

31,768

 

Cash, cash equivalents and restricted cash and equivalents, beginning of period

 

114,329

 

 

 

507,680

 

Cash, cash equivalents and restricted cash and equivalents from continuing operations, end of period

 

153,790

 

 

 

169,660

 

Cash, cash equivalents and restricted cash and equivalents from discontinued operations, end of period

 

 

 

 

8,883

 

Cash, cash equivalents and restricted cash and equivalents, end of period

$

153,790

 

 

178,543 

agilon health, inc.

Key Operating Metrics

In thousands

(unaudited)

GROSS PROFIT

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2024

 

2023

 

2024

 

2023

Total revenues

$

1,450,932

 

 

$

1,136,863

 

 

$

4,538,044

 

 

$

3,260,290

 

Medical services expense

 

(1,505,950

)

 

 

(1,022,871

)

 

 

(4,323,852

)

 

 

(2,853,266

)

Other medical expenses(1)

 

(9,149

)

 

 

(77,153

)

 

 

(171,096

)

 

 

(242,486

)

Gross profit

$

(64,167

)

 

$

36,839

 

 

$

43,096

 

 

$

164,538

 

______________________________________________________________

(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 September 30, 2024 and 2023, costs incurred in implementing geographies were $1.4 million and $10.3 million, respectively. For the nine months ended September 30, 2024 and 2023, costs incurred in implementing geographies were $2.0 million and $20.3 million, respectively.

GENERAL AND ADMINISTRATIVE COSTS, INCLUDING PLATFORM SUPPORT COSTS

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2024

 

2023

 

2024

 

2023

Platform support costs

$

42,353

 

$

41,590

 

$

129,752

 

$

126,923

Geography entry costs(1)

 

5,857

 

 

8,064

 

 

21,182

 

 

28,620

Severance and related costs

 

1,453

 

 

 

 

4,736

 

 

188

Stock-based compensation expense

 

13,259

 

 

20,619

 

 

48,375

 

 

53,650

Other(2)

 

201

 

 

1,785

 

 

5,112

 

 

11,683

General and administrative

$

63,123

 

$

72,058

 

$

209,157

 

$

221,064

______________________________________________________________

(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 transaction-related costs.

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 and compliance functions.

agilon health, inc.

Non-GAAP Financial Measures

In thousands

(unaudited)

MEDICAL MARGIN

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2024

 

2023

 

2024

 

2023

Gross profit(1)

$

(64,167

)

 

$

36,839

 

 

$

43,096

 

 

$

164,538

 

Other operating revenue

 

(3,235

)

 

 

(3,406

)

 

 

(9,573

)

 

 

(6,480

)

Other medical expenses

 

9,149

 

 

 

77,153

 

 

 

171,096

 

 

 

242,486

 

Medical margin

$

(58,253

)

 

$

110,586

 

 

$

204,619

 

 

$

400,544

 

______________________________________________________________

(1)

Gross profit is defined as total revenues less medical services expense and other medical expenses.

ADJUSTED EBITDA

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2024

 

2023

 

2024

 

2023

Net income (loss)(1)

$

(117,615

)

 

$

(31,483

)

 

$

(154,311

)

 

$

(32,319

)

(Income) loss from discontinued operations, net of income taxes

 

1,183

 

 

 

9,444

 

 

 

10,464

 

 

 

4,205

 

Interest expense

 

1,622

 

 

 

1,617

 

 

 

4,603

 

 

 

4,665

 

Income tax expense (benefit)

 

(590

)

 

 

1,210

 

 

 

(306

)

 

 

524

 

Depreciation and amortization

 

6,218

 

 

 

4,075

 

 

 

17,969

 

 

 

11,308

 

Severance and related costs

 

1,453

 

 

 

 

 

 

4,736

 

 

 

188

 

Stock-based compensation expense

 

13,259

 

 

 

20,619

 

 

 

48,375

 

 

 

53,650

 

EBITDA adjustments related to equity method investments(2)

 

9,719

 

 

 

3,702

 

 

 

15,025

 

 

 

8,426

 

Other(3)

 

(11,718

)

 

 

(3,631

)

 

 

(16,800

)

 

 

(8,587

)

Adjusted EBITDA

$

(96,469

)

 

$

5,553

 

 

$

(70,245

)

 

$

42,060

 

______________________________________________________________

(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 September 30, 2024 and 2023, (i) $1.4 million and $10.3 million, respectively, are included in other medical expenses and (ii) $5.8 million and $8.0 million, respectively, are included in general and administrative expenses. For the nine months ended September 30, 2024 and 2023, (i) $2.0 million and $20.3 million, respectively, are included in other medical expenses and (ii) $21.2 million and $28.6 million, respectively, are included in general and administrative expenses.

(2)

Includes elimination of certain administrative services provided by agilon health, inc. to equity method investments.

(3)

Includes interest income, transaction-related costs and elimination of certain administrative services provided by agilon health, inc. to equity method investments.

agilon health, inc.

Supplemental Financial Information

In thousands

(unaudited)

 

 

Three Months Ended
September 30, 2024

 

Nine Months Ended
September 30, 2024

 

Medicare
Advantage
(Consolidated)

 

CMS ACO Models
(Unconsolidated)

 

Medicare
Advantage
(Consolidated)

 

CMS ACO Models
(Unconsolidated)

Medical services revenue

$

1,447,697

 

 

$

454,410

 

 

$

4,528,471

 

 

$

1,341,484

 

Other operating revenue

 

3,235

 

 

 

 

 

 

9,573

 

 

 

 

Total revenues

 

1,450,932

 

 

 

454,410

 

 

 

4,538,044

 

 

 

1,341,484

 

Medical services expense

 

(1,505,950

)

 

 

(413,189

)

 

 

(4,323,852

)

 

 

(1,218,902

)

Other medical expenses

 

(9,149

)

 

 

(23,817

)

 

 

(171,096

)

 

 

(71,490

)

Gross profit

 

(64,167

)

 

 

17,404

 

 

 

43,096

 

 

 

51,092

 

Other operating revenue

 

(3,235

)

 

 

 

 

 

(9,573

)

 

 

 

Other medical expenses

 

9,149

 

 

 

23,817

 

 

 

171,096

 

 

 

71,490

 

Medical margin

$

(58,253

)

 

$

41,221

 

 

$

204,619

 

 

$

122,582

 

Certain of our operations are not consolidated for the period presented because we do not have the ability to control certain activities due to another party’s control of the entities’ board of directors. Although revenues of the unconsolidated operations are not recorded as revenues by us, income (loss) from equity method investments is nonetheless a significant portion of our overall earnings. See Note 14 to the Condensed Consolidated Financial Statements in the Quarterly Report on Form 10-Q for the period ending September 30, 2024 for additional discussion on our equity method investments.

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 expense is 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.

Investor Contact

Leland Thomas

Investor Relations

investors@agilonhealth.com

Media Contact

Maureen Merkle

Communications

media@agilonhealth.com

Source: agilon health, inc.

FAQ

What was agilon health's (AGL) revenue in Q3 2024?

agilon health reported revenue of $1.45 billion in Q3 2024, representing a 28% increase from Q3 2023.

How many Medicare Advantage members did AGL have in Q3 2024?

AGL had 525,000 Medicare Advantage members as of September 30, 2024, showing a 37% increase year-over-year.

What was AGL's net loss in Q3 2024?

AGL reported a net loss of $118 million in Q3 2024, compared to a net loss of $31 million in Q3 2023.

What actions is AGL taking to improve performance?

AGL announced plans to exit two unprofitable partnerships and certain payor contracts by the end of 2024 to strengthen their business run-rate into 2025.

agilon health, inc.

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