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
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%)
- Membership metrics reflect end of period results.
- agilon’s ACO model entities are not included within its
consolidated financial results.
- 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
- Membership reflects management’s outlook for end of
period.
- agilon’s partnered ACO model entities are not consolidated
within its financial results.
- Adjusted EBITDA contribution from ACO model is expected to be
approximately $38 million for fiscal year 2024.
- Geography Entry Costs represent the corresponding expense
included in the low-end and high-end of management’s outlook for
adjusted EBITDA.
Outlook for Fourth Quarter 2024
($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
- Membership reflects management’s outlook for end of
period.
- agilon’s partnered ACO model entities are not consolidated
within its financial results.
- Adjusted EBITDA contribution from ACO model is expected to be
approximately $5 million for the fourth quarter 2024.
- 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241107938098/en/
Investor Contact Leland Thomas Investor Relations
investors@agilonhealth.com
Media Contact Maureen Merkle Communications
media@agilonhealth.com
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