agilon health Reports Third Quarter 2024 Results
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)--November 07, 2024--
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 Members(1) 525,000 384,000 37%
ACO Model Members(1, 2) 132,000 88,000 51%
Total Members Live on Platform(1, 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 EBITDA(3) ($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 Members(1) 526,000 528,000 518,000 520,000
ACO Model Members(1,2) 127,000 129,000 123,000 128,000
Total Members Live on
Platform(1) 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 EBITDA(3) ($155) ($135) ($60) ($15)
Geography Entry Costs(4) $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 Members(1) 526,000 528,000
ACO Model Members(1,2) 127,000 129,000
Total Members Live on Platform(1) 653,000 657,000
Avg. Medicare Advantage Members 526,000 527,000
Total Revenues $1,512 $1,527
Medical Margin $5 $35
Adjusted EBITDA(3) ($85) ($65)
Geography Entry Costs(4) $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.
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