P3 Health Partners Reaffirms Guidance for 2023 and Announces Guidance for 2024
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Insights
The reaffirmed guidance for 2023 and the new guidance for 2024 provided by P3 Health Partners indicate a trajectory of growth and a transition from loss to profitability. The projected increase in Medicare Advantage Members and corresponding revenue growth signify an expansion in P3's market share within the Medicare Advantage space. Notably, the anticipated rise in Medical Margin from $155 million to $175 million in 2023 and further to $230 million to $250 million in 2024 reflects an improving operational efficiency and cost management, crucial for investor confidence.
Furthermore, the shift from an Adjusted EBITDA loss in 2023 to a positive EBITDA in 2024 is particularly significant. It suggests that P3 is expected to move beyond break-even and start generating positive cash flows, an important indicator of financial health. Investors should closely monitor the Medical Margin Per Member Per Month (PMPM), as this metric offers insight into the profitability of P3’s services on a per capita basis, which is rising according to the guidance. A higher PMPM can be indicative of effective cost control strategies or pricing power in the market.
The increasing enrollment in Medicare Advantage Members as forecasted by P3 Health Partners demonstrates a growing demand for their healthcare management services. The projected growth aligns with industry trends where an aging population is contributing to the expansion of the Medicare Advantage market. P3's strategic partnerships, as mentioned, could be pivotal in sustaining this growth by leveraging synergies and expanding their service offerings.
It's important to assess how P3's projected growth compares with competitors and whether their strategies are in line with market expectations. The company's focus on managing medical cost trends is a response to the broader industry challenge of rising healthcare costs. Their ability to improve this metric could serve as a competitive advantage and a reassurance to stakeholders about the company's long-term sustainability.
The guidance provided by P3 Health Partners has broader implications for the healthcare economy. The transition towards profitability in a healthcare management company is indicative of the sector's potential for innovation in cost management and efficiency. The positive Adjusted EBITDA forecast for 2024 suggests that P3's business model could be scalable and may influence how healthcare is delivered and financed, especially in the context of value-based care models.
Moreover, the company's performance metrics will be critical to watch, as they could signal shifts in healthcare utilization patterns and the effectiveness of population health management strategies. These factors could have downstream effects on healthcare providers, insurers and patients, potentially leading to changes in healthcare policy and reimbursement models.
“We made significant strides in 2023 and expect to achieve meaningful profitability in 2024, an important milestone for the company. We have a robust pipeline of strategic partnerships that will drive growth and further validate the P3 business model. And our business continues to gain momentum across all key performance metrics including managing medical cost trend,” said Dr. Sherif Abdou, co-founder and CEO of P3.
Reaffirming full-year 2023 guidance:
- Medicare Advantage Members from 115,000 to 120,000
-
Revenue from
to$1.2 billion $1.25 billion -
Medical Margin from
to$155 million $175 million -
Medical Margin PMPM from
to$120 $130 -
Adjusted EBITDA is expected to be a loss between
and$50 million $30 million
Providing full-year 2024 guidance:
- Medicare Advantage Members from 125,000 to 135,000
-
Revenue from
to$1.45 billion $1.55 billion -
Medical Margin from
to$230 million $250 million -
Medical Margin PMPM from
to$165 $175 -
Adjusted EBITDA from
to$20 million , as previously announced$40 million
Dr. Sherif Abdou, P3’s co-founder and Chief Executive Officer and Atul Kavthekar, P3’s Chief Financial Officer, are scheduled to present on Wednesday, January 10 at 1:30 pm Pacific Time.
A live audio webcast of the presentation is available here. A replay will be available on P3’s investor relations webpage for 30 days following the presentation.
Full-Year 2023 Guidance |
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Year Ending
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Low |
High |
Medicare Advantage Members |
115,000 |
120,000 |
Total Revenues (in millions) |
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Medical Margin (in millions) |
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Medical Margin PMPM |
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Adjusted EBITDA Loss (in millions) |
( |
( |
Full-Year 2024 Guidance |
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|
Year Ending
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|
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|
Low |
High |
Medicare Advantage Members |
125,000 |
135,000 |
Total Revenues (in millions) |
|
|
Medical Margin (in millions) |
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|
Medical Margin PMPM |
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|
Adjusted EBITDA (in millions) |
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About P3 Health Partners (NASDAQ: PIII):
P3 Health Partners Inc. is a leading population health management company committed to transforming healthcare by improving the lives of both patients and providers. Founded and led by physicians, P3 has an expansive network of more than 2,700 affiliated primary care providers across the country. Our local teams of health care professionals manage the care of thousands of patients in 18 counties across five states. P3 supports primary care providers with value-based care coordination and administrative services that improve patient outcomes and lower costs. Through partnerships with these local providers, the P3 care team creates an enhanced patient experience by navigating, coordinating, and integrating the patient’s care within the healthcare system. For more information, visit www.p3hp.org and follow us on LinkedIn and Facebook.com/p3healthpartners.
Non-GAAP Financial Measures
In addition to the financial results prepared in accordance with accounting principles generally accepted in the
The Company is not able to provide a quantitative reconciliation of its full-year 2023 preliminary results and 2024 guidance as to Adjusted EBITDA (loss), medical margin and medical margin PMPM to net income (loss), gross profit and gross profit PMPM, the most directly comparable GAAP measures, respectively, and has not provided forward-looking guidance for net income (loss), gross profit (loss) or gross profit (loss) PMPM because of the uncertainty around certain items that may impact net income (loss), gross profit (loss) or gross profit (loss) PMPM that are not within our control or cannot be reasonably predicted without unreasonable effort.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the
Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, our ability to continue as a going concern; our potential need to raise additional capital to fund our existing operations or develop and commercialize new services or expand our operations; our ability to achieve or maintain profitability; our ability to maintain compliance with our debt covenants in the future, or obtain required waivers from our lenders if future operating performance were to fall below current projections, and if there are material changes to management’s assumptions, we could be required to recognize non-cash charges to operating earnings for goodwill and/or other intangible asset impairment; our ability to identify and develop successful new geographies, physician partners, payors and patients; changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to our services; our ability to fund our growth and expand our operations; changes in laws and regulations applicable to our business; our ability to maintain our relationships with health plans and other key payers; the impact of COVID-19, including the impact of new variants of the virus, or another pandemic, epidemic or outbreak of infectious disease on our business and results of operation; increased labor costs; our ability to recruit and retain qualified team members and independent physicians; and other factors discussed in Part I, Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023, as updated by Part II, Item 1A. “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2023 and in the Company’s other filings with the SEC. All information in this press release is as of the date hereof, and we undertake no duty to update or revise this information unless required by law. You are cautioned not to place undue reliance on any forward-looking statements contained in this press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240109533629/en/
Investor Relations
Karen Blomquist
Vice President, Investor Relations
P3 Health Partners
kblomquist@p3hp.org
Kassi Belz
Executive Vice President, Communications
P3 Health Partners
(904) 415-2744
kbelz@p3hp.org
Source: P3 Health Partners Inc.
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