Q4 2024 Astrana Health Inc Earnings Call

February 27, 2025

Operator: Good day, everyone, and welcome to today's Astrana Health fourth quarter and full year 2024 earnings call. At this time, all participants are in a listen only mode.

Good day, everyone and welcome to today's strong as health fourth quarter and full year 'twenty 'twenty four earnings call. At this time all participants are in a listen only mode. Later, you will have the opportunity to ask questions. During the question and answer session and instructions will be provided at that time.

Operator: Later, you will have the opportunity to ask questions during the question and answer session and instructions will be provided at that time.

Operator: Today's speakers will be Brandon Sim, President and Chief Executive Officer of Astrana Health, and Chandan Basho, Chief Operating and Financial Officer.

Today's speakers will be Randall Sims, President and Chief Executive Officer of Australia, Health, and 10, Basso, Chief operating and Finance officer.

Operator: The press release announcing Astrana's Health results for the fourth quarter and full year ended December 31st, 2024 is available at the investor section of the company's website at www.astranahealth.com. The company will discuss certain non-GAP measures during this call. Reconciliations to the most comparable GAP measures are included in the press release.

The press release announcing the Strawn has helped results for the fourth quarter and full year ended December 31st 2024 is available at the investors section of the company's website at Www Dot Astana health Dotcom.

The company will discuss certain non-GAAP measures during this call reconciliations to the most comparable GAAP measures are included in the press release.

Operator: To provide some additional background on its results, the company has made a supplemental deck available on its website.

He'll provide some additional background on its results. The company has made a supplemental deck available on its website. A replay of this broadcast will also be made available at Astana is helps website. After the conclusion of this call before we get started I would like to remind everyone that this conference call and any accompanying information discussed herein.

Operator 3: A replay of this broadcast will also be made available at Astrana Health's website after the conclusion of this call. Before we get started, I would like to remind everyone that this conference call and any accompanying information discussed herein contains certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as anticipate, believe, expect, future, plan, outlook, and will, and include, among other things, statements regarding the company's guidance for the year ending December 31, 2025, continued growth, acquisition strategy, ability to deliver sustainable long-term value, ability to respond to the changing environment, operational focus, strategic growth plans, and acquisition integration efforts.

Operator: A replay of this broadcast will also be made available at Astrana Health's website after the conclusion of this call. Before we get started, I would like to remind everyone that this conference call and any accompanying information discussed herein contains certain forward-looking statements within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as anticipate, believe, expect, future, plan, outlook, and will, and include, among other things, statements regarding the company's guidance for the year ending December 31, 2025, continued growth, acquisition strategy, ability to deliver sustainable long-term value, ability to respond to the changing environment, operational focus, strategic growth plans, and acquisition integration efforts.

Operator: A replay of this broadcast will also be made available at Astrana Health's website after the conclusion of this call.

Operator: Before we get started, I would like to remind everyone that this conference call and any accompanying information discussed herein contains certain forward looking statements within the meaning of the safe harbor provision of the Private Security Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as anticipate, believe, expect, future, plan, outlook, and will, and include, among other things, statements regarding the company's guidance for the year ending December 31st, 2025. Continued growth, acquisition strategy, ability to deliver sustainable long-term value, ability to respond to the changing environment, operational focus, strategic growth plans, and acquisition integration efforts.

Contains certain forward looking statements within the meaning of B C Harbor provision of the private Securities Litigation Reform Act of 1995.

These forward looking statements can be identified by terms such as anticipate believe expect future plan outlook and will and include among other things statements regarding the company's guidance for the year ending December 31st 2025 continue growth acquisition strategy, our ability to deliver sustainable.

Long term value ability to respond to the changing environment operational focus strategic growth plans and acquisition integration efforts.

Operator 3: Although the company believes that the expectations reflected in its forward-looking statements are reasonable as of today, those statements are subject to risks and uncertainties that could cause the actual results to differ materially from those projected. There can be no assurance that those expectations will prove to be correct. Information about the risks associated with investing in Astrana Health is included in its filings with the Securities and Exchange Commission, which we encourage you to review before making an investment decision. The company does not assume any obligation to update any forward-looking statements as a result of new information, future events, changes in market conditions, or otherwise except as required by law. Regarding the disclaimer language, I would also like you to refer to Slide 2 of the conference call presentation for further information.

Operator: Although the company believes that the expectations reflected in its forward-looking statements are reasonable as of today, those statements are subject to risks and uncertainties that could cause the actual results to differ materially from those projected. There can be no assurance that those expectations will prove to be correct. Information about the risks associated with investing in Astrana Health is included in its filings with the Securities and Exchange Commission, which we encourage you to review before making an investment decision.

Although the company believes that the expectations reflected in its forward looking statements are reasonable as of today. Those statements are subject to risks and uncertainties that could cause the actual results to differ materially from those projected.

There can be no assurance that those expectations will provide to be correct.

Operator: Information about the risk associated with the investing in Astrana's health is included in its filings with the Securities and Exchange Commission, which we encourage you to review before making an investment decision. The company does not assume any obligation to update any forward-looking statements as a result of new information, future events, changes in market condition, or otherwise except as required by law. Regarding the disclaimer language, I would also like you to refer to slide 2 of the conference call presentation for further information.

Information about the risks associated with investing in our strong as health is included in its filings with the Securities and Exchange Commission, which we encourage you to review before making an investment decision.

Operator: The company does not assume any obligation to update any forward-looking statements as a result of new information, future events, changes in market conditions, or otherwise except as required by law. Regarding the disclaimer language, I would also like you to refer to Slide 2 of the conference call presentation for further information. With that, I'll turn the call over to Astrana Health's President and Chief Executive Officer, Brandon Sim. Please go ahead, Brandon.

The company does not assume any obligation to update any forward looking statements as a result of new information future events changes in market conditions or otherwise, except as required by law rigor.

Speaker Change: Regarding the disclaimer language would also like you to refer to slide two of the conference call presentation for further information with that I'll turn the call over to the song as health President and Chief Executive Officer brands handset. Please go ahead Brendan.

Brandon Sim: With that, I'll turn the call over to Astrana's Health President and Chief Executive Officer, Brandon Sim. Please go ahead, Brandon. Good afternoon, and thank you all for joining us. Our fourth quarter and full year results reinforce the strong momentum we continue to build as we scale the nation's leading patient-centered, paragnostic healthcare platform. We are proud of what Astrana has accomplished this year. advancing our mission to deliver high quality, high value, and accessible care to communities nationwide. In 2024, we expanded our footprint significantly while delivering strong financial performance across both the top and bottom lines. Our ability to execute and sustain rapid growth, even amid a complex macroeconomic environment, challenging reimbursement dynamics, and shifting utilization trends, underscores the strength of our model and the discipline of our execution.

Operator 3: With that, I'll turn the call over to Astrana Health's President and Chief Executive Officer, Brandon Sim. Please go ahead, Brandon.

Brandon Sim: Good afternoon, and thank you all for joining us today. Our Q4 and full-year results reinforce the strong momentum we continue to build as we scale the nation's leading patient-centered, payer-agnostic healthcare platform. We are proud of what Astrana has accomplished this year, advancing our mission to deliver high quality, high value, and accessible care to communities nationwide. In 2024, we expanded our footprint significantly while delivering strong financial performance across both the top and bottom lines. Our ability to execute and sustain rapid growth, even amid a complex macroeconomic environment, challenging reimbursement dynamics, and shifting utilization trends, underscores the strength of our model and the discipline of our execution. Our success is built on the consistent execution of the four key pillars in the Astrana playbook quarter after quarter. First, we are sustainably growing our membership and patients served, expanding access to high-quality care for more Americans.

Good afternoon, and thank you all for joining us today.

Speaker Change: Our fourth quarter and full year results reinforced the strong momentum we continued adult as we scale the nation's leading patient centered payer agnostic health care platform.

Speaker Change: We are proud of what Australia has accomplished this year.

Speaker Change: Our mission to deliver high quality high value inaccessible care to communities nationwide.

Speaker Change: And 'twenty 'twenty four we expanded our footprint significantly while delivering strong financial performance across both the top and bottom lines.

Speaker Change: Our ability to execute and sustain rapid growth.

Speaker Change: Even amid a complex macroeconomic environment challenging reimbursement dynamics and shifting utilization trends underscores the strength of our model and the discipline of our execution.

Brandon Sim: Our success is built on the consistent execution of the four key pillars in the Astrana playbook, quarter after quarter. First, we are sustainably growing our membership and patients served, expanding access to high-quality care for more Americans. Second, we are deepening our alignment with patient outcomes through responsible risk progression in our value-based contracts. Third, we are delivering excellent patient outcomes and improving care quality while effectively managing costs. And fourth, we are driving operational excellence across our organization through our proprietary care enablement platform.

Speaker Change: Our success is built on the consistent execution of the four key pillars in the Strawn play book quarter after quarter.

Speaker Change: First we are sustainably growing our membership and patient served expanding access to high quality care for more Americans.

Brandon Sim: Second, we are deepening our alignment with patient outcomes through responsible risk progression in our value-based contracts. Third, we are delivering excellent patient outcomes and improving care quality while effectively managing costs. Fourth, we are driving operational excellence across our organization through our proprietary Care Enablement platform. To bring our playbook to life, I'll begin by sharing a recent patient story. I'll highlight some of our financial results for the year, which reflect our success in executing on these four strategic pillars.

Speaker Change: Second we are deepening our alignment with patient outcomes through responsible risk group progression in our value based contracts.

Speaker Change: Third we are delivering excellent patient outcomes and improving care quality, while effectively managing costs.

Speaker Change: And fourth we are driving operational excellence across our organization through our proprietary care enablement platform.

Brandon Sim: To bring our playbook to life, I'll begin by sharing a recent patient story. Then I'll highlight some of our financial results for the year, which reflect our success in executing on these four strategic pillars. After that, I'll provide a review of our progress and provide key business updates. Before handing the call to Chan, we'll go into more detail on our financial performance and guidance out there. While today's call is focused on our financial performance.

Speaker Change: To bring our playbook the life I'll begin by sharing a recent patient story.

Speaker Change: Then I'll highlight some of our financial results for the year, which reflect our success in executing on these four strategic pillars.

Brandon Sim: After that, I'll provide a review of our progress and provide key business updates before handing the call to Chan, who will go into more detail on our financial performance and guidance outlook. While today's call is focused on our financial performance, the true heart and soul of our business, what drives everything that we do, is the impact that we have on the lives of our patients. With that in mind, I'd like to share an anonymized patient vignette, one of many, which illustrates the meaningful difference our technology-enabled care model is making for our members each and every day. Recently, one of our dual-eligible members, Amy, was identified as a patient requiring highly personalized support by the risk stratification model we've built in our homegrown care management tool named Pathways.

Speaker Change: After that I'll provide a review of our progress and provide key business updates.

Speaker Change: Before handing the call to John who will go into more detail on our financial performance and guidance outlook.

Speaker Change: While today's call is focused on our financial performance.

Brandon Sim: The true heart and soul of our business, what drives everything that we do, is the impact that we have on the lives of our patients. So with that in mind, I'd like to share an anonymized patient vignette, one of many, which illustrates the meaningful difference our technology-enabled care model is making for our members each and every day. Recently, one of our dual eligible members, Amy, was identified as a patient requiring highly personalized support by the risk gratification model we built in our homegrown care management tool, named PATH. This determination was made due to the complex set of health challenges that Amy faces.

John: True heart and soul of our business what drives everything that we do.

Speaker Change: Is the impact that we have on the lives of our patients.

Speaker Change: So with that in mind I'd like to share an anonymised patient vignette, one of many which illustrates the meaningful difference our technology enabled care model is making for our members each and everyday.

Speaker Change: Recently, one of our dual eligible members Amy was identified as a patient requiring highly personalized support by the risk stratification model, we built in our homegrown care management tool named pathways.

Brandon Sim: This determination was made due to the complex set of health challenges that Amy faces, including COPD, diabetes, hypertension, high cholesterol, and serious mental illness. To make things worse, upon checking in with her, our care management team discovered that previously unreported cataracts were significantly impacting her daily life, and that the patient did not want to seek surgery due to her fear of anesthesia. Our team stepped in with a personalized and holistic care plan created in Pathways, which addressed not only Amy's physical and mental health needs, but also tackled food insecurity and aimed to ease her anxiety about the cataract procedure. Pathways also helped the care team coordinate with our team of community health workers who kept her engaged, connected her to essential community resources, and even explored the possibility of her utilizing a service animal to help address her anxiety.

Speaker Change: This determination was made due to the complex set of health challenges that Amy faces, including COPD diabetes hypertension high cholesterol and serious mental illness.

Brandon Sim: including COPD, diabetes, hypertension, high cholesterol, and serious mental illness. To make things worse, upon checking in with her, our care management team discovered that previously unreported cataracts were significantly impacting her daily life. and that the patient did not want to seek surgery due to her fear of anesthesia. Our team stepped in with a personalized and holistic care plan created in Pathways which addressed not only Amy's physical and mental health needs, but also tackled food insecurity and aimed to ease her anxiety about the cataract procedure. Pathways also helped the care team coordinate with our team of community health workers who kept her engaged, connected her to essential community resources, and even explored the possibility of her utilizing a service animal to help address her anxiety.

Speaker Change: Things worse upon checking in with her our care management team discovered that previously unreported cataracts or significantly impacting our daily lives.

Speaker Change: And that the patient did not want to see surgery due to her fear of anesthesia.

Speaker Change: Our teams stepped in with a personalized and holistic care plan created and pathways, which address not only I'm, Amy its physical and mental health needs, but also tackled food and security and aimed to easily anxiety about the cataract procedure.

Speaker Change: Pathways also help the care team coordinate with our team of community health workers, who could.

Speaker Change: Scepter engaged connected hurt to a central community resources, and even explored the possibility of utilizing a servicing animals to help address for anxiety.

Brandon Sim: Our utilization and care management teams worked closely with specialists in our care partners network to coordinate for cataract surgery in a comfortable outpatient setting. a key advantage of our fully integrated, delegated care model. They also worked to make sure that she could afford her medications, take them as prescribed, and adhere to the appropriate treatment plan. Amy's heartfelt words to our team, I can see again. serve as a powerful reminder of the impact of our model, allowing her to live in independence going forward. Amy's story is one of many that showcase how closing gaps and driving coordination in our complex healthcare system isn't just a moral imperative, it also creates meaningful business value as we make investments in our patients' health today that prevent costly and unnecessary inpatient utilization later in their lives.

Brandon Sim: Our utilization and care management teams worked closely with specialists in our Care Partners network to coordinate her cataract surgery in a comfortable outpatient setting, a key advantage of our fully integrated delegated care model. They also worked to make sure that she could afford her medications, take them as prescribed, and adhere to the appropriate treatment plan. Amy's heartfelt words to our team, "I can see again," serve as a powerful reminder of the impact of our model, allowing her to live in independence going forward. Amy's story is one of many that showcase how closing gaps and driving coordination in our complex healthcare system isn't just a moral imperative, it also creates meaningful business value as we make investments in our patients' health today that prevent costly and unnecessary inpatient utilization later in their lives.

Speaker Change: Our utilization and care management teams worked closely with specialists and our care partners network to coordinate for cataract surgery and comfortable outpatient setting.

Speaker Change: A key advantage of our fully integrated delegated care model.

Speaker Change: They also work to make sure that she can afford their medications pick them as prescribed and adhere to the appropriate treatment planning.

Amy: Amy is heartfelt words to our team.

Speaker Change: You can see again.

Speaker Change: Serve as a powerful reminder of the impact of our model.

Speaker Change: Allowing her to live in independence going forward.

Speaker Change: Amy story is one of many that showcase how closing gaps in driving coordination and our complex health care system isn't just a moral imperative.

It also creates meaningful business value as we make investments in our patients' health today.

Speaker Change: That prevent costly and unnecessary inpatient utilization later in their lives.

Brandon Sim: I'll now segue into covering key highlights of our financial performance in 2024. In the fourth quarter, we delivered total revenue of $665.2 million, an 88.4% increase over the prior year period, and adjusted EBITDA of $35 million, reflecting 20.8% growth year-over-year. For the full year of 2024, Astrana generated $2.03 billion of total revenue, a 47% increase from the prior year, while adjusted EBITDA reached $170.4 million, up 16.2% year-over-year. Growth was driven primarily by our care partners segment, which grew 52% year over year to 1.95 billion. These strong results were achieved even as we made significant strategic investments in our growth initiatives and integration capabilities.

Brandon Sim: I'll now segue into covering key highlights of our financial performance in 2024. In Q4, we delivered total revenue of $665.2 million, an 88.4% increase over the prior year period, and adjusted EBITDA of $35 million, reflecting 20.8% growth year-over-year. For the full year of 2024, Astrana generated $2.03 billion of total revenue, a 47% increase from the prior year, while adjusted EBITDA reached $170.4 million, up 16.2% year-over-year. Growth was driven primarily by our Care Partners segment, which grew 52% year-over-year to $1.95 billion.

I'll now segue into covering key highlights of our financial performance in 2024.

Speaker Change: The fourth quarter, we delivered total revenue of $665 $2 million and 88, 4% increase over the prior year period and.

Speaker Change: And adjusted EBITDA of $35 million, reflecting 28% growth year over year.

Speaker Change: For the full year of 2020 for Australia generated $2.03 billion of total revenue a 47% increase from the prior year.

Speaker Change: While adjusted EBITDA reached $174 million.

Speaker Change: Up 16, 2% year over year.

Speaker Change: Growth was driven primarily by our care partners segment, which grew 52% year over year to $1 95 billion.

Brandon Sim: These strong results were achieved even as we made significant strategic investments in our growth initiatives and integration capabilities, which caused an approximately $13 million drag to earnings. With that, let's take a deeper dive into the four pillars of the Astrana playbook. We continue to make significant headway in our first pillar, sustainable membership growth. In 2024, we saw a 55% membership growth in our Care Partners segment, driven primarily by the conversion of CFC from our Care Enablement client business to our Care Partners business, the acquisition of CHS, and our organic growth efforts. We also made significant progress in the second pillar of our strategy, responsible risk progression in our value-based contracts. By the end of 2024, approximately 73% of our total capitation revenue came from full risk arrangements.

These strong results were achieved even as we made significant strategic investments in our growth initiatives and integration capabilities, which caused an approximately $13 million drag to earnings.

Brandon Sim: which caused an approximately $13 million drag to earn.

Brandon Sim: With that, let's take a deeper dive into the four pillars of the Astrana Playbook. We continue to make significant headway in our first pillar, sustainable membership growth. In 2024, we saw 55% membership growth in our care partner segment, driven primarily by the conversion of CFC from our care enablement client business to our care partners business. The acquisition of CHS. and our organic growth efforts. We also made significant progress in the second pillar of our strategy, responsible risk progression in our value-based contracts. By the end of 2024, approximately 73% of our total capitation revenue came from full risk arrangements.

Speaker Change: With that let's take a deeper dive into the four pillars of the Australia playbook.

Speaker Change: We continue to make significant headway in our first pillar sustainable membership growth.

Speaker Change: And 'twenty 'twenty four we saw 55% membership growth in our care partners segment.

Speaker Change: Driven primarily by the conversion of CFC from our care enablement client business to our care partners business.

Speaker Change: The acquisition of CHS.

Speaker Change: And our organic growth efforts.

Speaker Change: We also made significant progress in the second pillar of our strategy responsible risk progression in our value based contracts.

Speaker Change: By the end of 2020 for approximately 73% of our total capitation revenue came from full risk arrangements.

Brandon Sim: We anticipate this percentage will continue to grow year over year in the short to medium term. We have taken a disciplined approach to inpatient care management as we transition more of our membership from shared risk to full risk arrangements. As a result, inpatient utilization in our full risk business has remained flat to slightly down on a mix and seasonality adjusted basis, reflecting our disciplined approach to care coordination and cost management. Turning to the third pillar, we remain focused on driving quality and patient outcomes while managing cost trend. We are proud of the meaningful work we have done in improving care quality across our membership. In 2024, approximately three-quarters of our senior members received an annual wellness visit.

Speaker Change: We anticipate this percentage will continue to grow year over year in the short to medium term.

Speaker Change: Okay.

Speaker Change: We have taken a disciplined approach to inpatient care management as we transition more of our membership from shared risk to full risk arrangements.

Speaker Change: As a result inpatient utilization in our forests business has remained flat to slightly down on a mix and seasonality adjusted basis, reflecting our.

Speaker Change: Our disciplined approach to care coordination and cost management.

Brandon Sim: Turning to the third pillar, we remain focused on driving quality and patient outcomes while managing cost trends. We are proud of the meaningful work we have done in improving care quality across our membership. In 2024, approximately three quarters of our senior members received an annual wellness visit. Based on the insights from these visits, patients were proactively referred into the appropriate care management and disease management programs supported by our clinical teams and care partners network. to help manage chronic conditions more effectively as in Amy's story earlier. We continue to leverage our care platform to increase gap closures across our membership, yielding improvements in closure rates and star ratings across key metrics, including but not limited to blood pressure control and hemoglobin A1C.

Speaker Change: Turning to the third pillar, we remain focused on driving quality and patient outcomes, while managing cost trends.

Speaker Change: We are proud of the meaningful work, we have done in improving care quality across our membership.

Speaker Change: In 2020 for approximately three quarters of our senior members received an annual wellness visits.

Brandon Sim: Based on the insights from these visits, patients were proactively referred into the appropriate care management and disease management programs, supported by our clinical teams and care partners network to help manage chronic conditions more effectively, as in Amy's story earlier. We continue to leverage our care platform to increase gap closures across our membership, yielding improvements in closure rates and star ratings across key metrics, including but not limited to blood pressure control and hemoglobin A1c. Further underscoring our commitment to quality, 8 of Astrana's affiliate provider groups were recognized with the highest Elite five-star status in all categories in the 2024 Standards of Excellence survey by America's Physician Groups. Moving on to medical cost trend. Like the rest of the industry, we experienced some utilization headwinds in 2024, but were able to mitigate much of their impact.

Speaker Change: Based on the insights from these visits patients were proactively referred into the appropriate care management disease management programs supported by our clinical teams and care partners network.

Speaker Change: To help manage chronic conditions more effectively.

Amy: As you know Amy story earlier.

Amy: We continue to leverage our care platform to increase GAAP closures across our membership yielding.

Amy: Building improvements and closure rates and star ratings across key metrics, including but not limited to blood pressure control and hemoglobin ANZ.

Brandon Sim: And further underscoring our commitment to quality, eight of Astrana's affiliate provider groups were recognized with the highest elite five-star status in all categories in the 2024 Standards of Excellence surveyed by America's physician group.

Amy: And further underscoring our commitment to quality each of a strong as affiliate provider groups were recognized with the highest elite five star status in all categories in the 'twenty 'twenty four standards of Excellence survey by America's physician groups.

Brandon Sim: Moving on to medical cost trends. Like the rest of the industry, we experienced some utilization headwinds in 2024, but were able to mitigate much of their impact. In aggregate, across all lines of business, we ended 2024 with a 5.3% utilization trend, approximately half the national blended average trend across Medicare, Medicaid, and commercial. We avoided double-digit expense trends in all of our lines of business. maintaining a low single-digit trend in Medicare, a mid-single-digit trend in commercial, and a high single-digit trend in Medicaid. These results reflect our continued commitment to providing members with high-quality care while leveraging technology-driven care management, disease management, and care coordination programs that now serve over a million members nationwide.

Moving on to medical cost trend.

Amy: Like the rest of the industry, we experienced some utilization headwinds in 2024.

Amy: We're able to mitigate much of their impacts.

Brandon Sim: In aggregate, across all lines of business, we ended 2024 with a 5.3% utilization trend, approximately half the national blended average trend across Medicare, Medicaid, and commercial. We avoided double-digit expense trends in all of our lines of business, maintaining a low single-digit trend in Medicare, a mid-single digit trend in commercial, and a high single-digit trend in Medicaid. These results reflect our continued commitment to providing members with high quality care while leveraging technology-driven care management, disease management, and care coordination programs that now serve over 1 million members nationwide. Closing with our fourth pillar, we continue to expand our proprietary care enablement platform to better serve physicians and providers while driving operational excellence across the organization. Late last year, we began a care enablement partnership with Provider Health Link, or PHL, a provider network in Georgia.

Amy: In aggregate across all lines of business, we ended 2024 with a 5.3% utilization trend.

Amy: Proximately half the national blended average trend across Medicare Medicaid and commercial.

Amy: We avoided double digit expense trends in all of our lines of business maintain.

Amy: Maintaining a low single digit trend and Medicare a mid single digit trend in commercial and a high single digit trend in Medicaid.

Amy: These results reflect our continued commitment to providing members with high quality care, while leveraging technology, driven care management disease management and care coordination programs that now serve over a million members nationwide.

Brandon Sim: Closing with our fourth pillar, we continue to expand our proprietary care enablement platform to better serve physicians and providers while driving operational excellence across the organization. Late last year, we began a care enablement partnership with Provider Health Link, or PHL, a provider network in Georgia. We will support PHL in serving approximately 10,000 Medicare Advantage members, and we expect the group to be successfully onboarded onto our platform in the first half of 2025. Additionally, we have made significant investments in automation and AI-driven enhancements within our platform to improve efficiency and scalability. We plan to continue these investments in 2025 as we position ourselves for sustained growth and M&A integration activity.

Amy: Closing with our fourth pillar, we continue to expand our proprietary care enablement platform to better serve physicians and providers, while driving operational excellence across the organization.

Amy: Late last year, we began a care enablement partnership with provider health link or P. H L.

Amy: Provider network in Georgia.

Brandon Sim: We will support PHL in serving approximately 10,000 Medicare Advantage members, and we expect the group to be successfully onboarded onto our platform in the first half of 2025. Additionally, we have made significant investments in automation and AI-driven enhancements within our platform to improve efficiency and scalability. We plan to continue these investments in 2025 as we position ourselves for sustained growth and M&A integration activity. We anticipate realizing approximately $10 million in operational efficiencies from these investments by early 2026. I'll conclude my prepared remarks by highlighting our recent organic growth in M&A activity, which took place against the backdrop of a more cautious approach for many of our peers. While we were relatively less aggressive in M&A activity during 2022 and 2023, we shifted to a more strategic and assertive approach in 2024 for several key reasons.

Amy: We will support P H L and serving approximately 10000 Medicare advantage members.

Amy: We expect the group to be successfully on boarded onto our platform in the first half of 2025.

Amy: Additionally.

Amy: We have made significant investments in automation and AI driven enhancements within our platform to improve efficiency and scalability.

Amy: We plan to continue these investments in 2025, as we position ourselves for sustained growth and M&A integration activity.

Brandon Sim: We anticipate realizing approximately $10 million in operational efficiencies from these investments by early 2026.

Amy: We anticipate realizing approximately $10 million in operational efficiencies from these investments by early 2026.

Brandon Sim: I'll conclude my prepared remarks by highlighting our recent organic growth and M&A activity, which took place against the backdrop of a more cautious approach for many of our peers. While we were relatively less aggressive in M&A activity during 2022 and 2023, we shifted to a more strategic and assertive approach in 2024 for several key reasons. First, based on our analysis of publicly available data, our expectations for Medicare Advantage rates were more favorable than the industry average. And early indications from the 2026 Medicare Advantage advanced rate notice suggest the outlook is materializing. Second, due to our long-standing care model and disciplined execution, we believed we were less exposed to sector-wide headwinds, such as risk adjustment changes and utilization trends.

Amy: I'll conclude my prepared remarks by highlighting our recent organic growth and M&A activity, which took place against the backdrop of a more cautious approach for many of our peers.

Amy: While we were relatively less aggressive and.

Amy: And M&A activity during 2022 and 2023 with.

Amy: We shifted to a more strategic and assertive approach in 'twenty 'twenty four for several key reasons.

Brandon Sim: First, based on our analysis of publicly available data, our expectations for Medicare Advantage rates were more favorable than the industry average, and early indications from the 2026 Medicare Advantage advanced rate notice suggests that outlook is materializing. Second, due to our long-standing care model and disciplined execution, we believed we were less exposed to sector-wide headwinds, such as risk adjustment changes and utilization trends. This positioned us to scale rapidly given our uniquely profitable financial profile. Finally, our proprietary and flexible technology platform allows us to scale and integrate large-scale acquisitions more efficiently. After carefully evaluating hundreds of deals over the past several years, we announced two acquisitions that we believe are most strategically aligned with Astrana's mission. First, we announced Collaborative Health Systems, or CHS. We anticipate integration for CHS will be substantially completed by Q2 of 2025.

Amy: First based on our analysis of publicly available data.

Amy: Our expectations for Medicare advantage rates were more favorable than the industry average.

Amy: Early indications from the 2026 Medicare advantage advanced written notice suggest the outlook is materializing.

Amy: Second due to our longstanding care model and disciplined execution.

Amy: We believed we were less exposed a sector wide headwinds such as risk adjustment changes and utilization trends.

Brandon Sim: This positioned us to scale rapidly given our uniquely profitable financial profile. Finally, our proprietary and flexible technology platform allows us to scale and integrate large-scale acquisitions more efficiently.

Amy: This positioned us to scale rapidly given our uniquely profitable financial profile.

Amy: Finally, our proprietary and flexible technology platform allows us to scale and integrate large scale acquisitions more efficiently.

Brandon Sim: After carefully evaluating hundreds of deals over the past several years, we announced two acquisitions that we believe are most strategically aligned with Astrana's mission. First, we announced Collaborative Health Systems, or CHS. We anticipate integration for CHS will be substantially completed by Q2 of 2025. In the fourth quarter of 2024, CHS delivered approximately $170 million of revenue. aligning with our expectations. Looking ahead, we expect CHS to contribute approximately $350 to $400 million of revenue for the full year of 2025 and approach break-even late in the year with profitability coming in 2026.

Amy: After carefully evaluating hundreds of deals over the past several years.

Amy: We announced two acquisitions that we believe are most strategically aligned with the strong as mission.

Amy: First we announced a collaborative health systems or CHS.

Amy: We anticipate integration for CHS will be substantially completed by Q2 of 2025.

Brandon Sim: In Q4 2024, CHS delivered approximately $170 million of revenue, aligning with our expectations. Looking ahead, we expect CHS to contribute approximately $350 to 400 million of revenue for the full year of 2025 and approach break even late in the year, with profitability coming in 2026. We also announced our plans to acquire Prospect Health, a move that aligns strategically and operationally with Astrana. With over three decades of experience serving communities in Southern California, Prospect operates a payer-agnostic line of business agnostic risk-bearing business, just like our care partners business. Importantly, Prospect's delegated operational model aligns very closely with our own, presenting a compelling opportunity to drive operating leverage through our technology platform.

Amy: In the fourth quarter of 2024.

Amy: H S delivered approximately $170 million of revenue.

Amy: Aligning with our expectations.

Amy: Looking ahead, we expect to CHS to contribute approximately $350 million to $400 million of revenue for the full year of 2025.

Amy: And approach breakeven late in the year with profitability coming in 2026.

Brandon Sim: We also announced our plans to acquire Prospect Health, a move that aligns strategically and operationally with Astrana. With over three decades of experience serving communities in Southern California, Prospect operates a payer-agnostic, line-of-business agnostic, risk-bearing business, just like our CARE Partners business. Importantly, PROSPECT's delegated operational model aligns very closely with our own. presenting a compelling opportunity to drive operating leverage through our technology platform. We also see significant potential to enhance care quality and access, particularly in California, where Prospect's network is highly complementary to ours. especially in Orange County, which is geographically adjacent to our Los Angeles headquarters.

We also announced our plans to acquire prospect House.

Amy: A move that align strategically and operationally with Australia.

Amy: With over three decades of experience serving communities in southern California Prospect operates a payer agnostic line of business are not agnostic risk bearing business, just like our care partners business.

Amy: Importantly, prospect delegated operational model aligns very closely with our own.

Amy: Presenting a compelling opportunity to drive operating leverage through our technology platform.

Brandon Sim: We also see significant potential to enhance care quality and access, particularly in California, where Prospect's network is highly complementary to ours, especially in Orange County, which is geographically adjacent to our Los Angeles headquarters. Chan will provide more detailed updates on Prospect later in this call. In closing, we are proud of the impact we've made and our disciplined execution against our playbook throughout 2024. We remain excited about the opportunities ahead, and we look forward to continuing to drive long-term value for patients, physicians, payers, and shareholders. With that, I'll hand it over to Chan.

Amy: We also see significant potential to enhance care quality and access, particularly in California, where prospects network is highly complementary to ours.

Amy: Especially in Orange County, which is geographically adjacent to our Los Angeles headquarters.

Brandon Sim: Tom will provide more detailed updates on Prospect later in this call.

Tom: Tom will provide more detailed updates on prospect later in this call.

Brandon Sim: In closing, we are proud of the impact we've made and our disciplined execution against our playbook throughout 2024. We remain excited about the opportunities ahead and we look forward to continuing to drive long-term value for patients, physicians, payers, and shareholders.

Amy: In closing.

Amy: We are proud of the impact we've made and our disciplined execution against our playbook throughout 2024.

Amy: We remain excited about the opportunities ahead, and we look forward to continuing to drive long term value for patients physicians payers and shareholders.

Chandan Basho: With that, I'll hand it over to Chandan. Thank you, Brandon, and thanks, everyone, for joining us. I'll dive into our 2024 financials and more. we delivered another year of strong performance. generating $2.03 billion in total revenue for 2020. An increase of 47% from 1.39 billion reported in 2020. This growth was fueled by gains across all three of our core business segments. Collectively, adjusted EBITDA reached $170.4 million, reflecting a 16.2% rise from $146.6 million in the previous year. As Brandon discussed, new market and integration costs related to Astrana's strategic growth efforts resulted in approximately $13 million of drag to profitability in 2020.

John: With that I'll hand, it over to John.

Chan Basho: Thank you, Brandon, and thanks everyone for joining us today. I'll dive into our 2024 financials in more detail. We delivered another year of strong performance, generating $2.03 billion in total revenue for 2024, an increase of 47% from $1.39 billion reported in 2023. This growth was fueled by gains across all three of our core business segments. Collectively, adjusted EBITDA reached $170.4 million, reflecting a 16.2% rise from $146.6 million in the previous year. As Brandon discussed, new market and integration costs related to Astrana's strategic growth efforts resulted in approximately $13 million of drag to profitability in 2024.

John: Thank you Brandon and thanks, everyone for joining us today I'll dive into our 2020 for financials in more detail.

John: We delivered another year of strong performance generating $2 3 billion in total revenue for 2024, an increase of 47% from $1 three 9 billion reported in 2023.

John: This growth was fueled by gains across all three of our core business segments collectively adjusted EBITDA reached $174 million, reflecting a 16, 2% rise from $146 6 million in the previous year.

John: As Brendan discussed new market and integration costs related to a stronger strategic growth efforts resulted in approximately 13 million of drag to profitability in 2024.

Chandan Basho: As for utilization, we experienced a mid-single-digit total expense. which included a 2% to 3% change in unit cost and a 3% to 4% utilization trend in... with variations across lines. We close the year with a solid liquidity. Ending with $288.5 million in cash and cash. This reflects our strategic initiatives, including the acquisition of CFC, CHS, as well as the buyout of the remaining equity interest in GMB. On the debt side, total debt, including lease liabilities, stood at $471.8 million. compared to $475.8 million in the prior. Our strong liquidity profile continues to support our commitment to long-term sustainable growth.

Chan Basho: As for utilization, we experienced a mid-single digit total expense trend, which included a 2 to 3% change in unit cost and a 3 to 4% utilization trend in aggregate, with variations across lines of business. We closed the year with a solid liquidity position, ending with $288.5 million in cash and cash equivalents. This reflects our strategic initiatives, including the acquisition of CFC, CHS, as well as the buyout of the remaining equity interest in GMG. On the debt side, total debt, including lease liabilities, stood at $471.8 million, compared to $475.8 million in the prior quarter. Our strong liquidity profile continues to support our commitment to long-term sustainable growth. In 2024, we announced the acquisition of the physician assets, along with the businesses and assets of Prospect Health System.

John: As for utilization, we experienced a mid single digit total expense trend, which included a 2% to 3% change in unit cost and a 3% to 4% utilization trend in aggregate.

John: With variations across the lines of business.

John: We closed the year with a solid liquidity position ending with $288 5 billion in cash and cash equivalents.

John: This reflects our strategic initiatives, including the acquisition of CSC CHS as well as the buyout of the remaining equity interest in gmg.

John: On the debt side total debt, including lease liabilities stood at $471 8 million compared to $475 8 million in the prior quarter.

John: Our strong liquidity profile continues to support our commitment to long term sustainable growth.

Chandan Basho: In 2024, we announced the acquisition of the physician assets, along with the businesses and assets of Prospect Health. We remain enthusiastic about the potential. for the prospect acquisition to significantly expand our provider network and enhance our ability to offer high-quality, accessible care to our members. On January 11th, 2025, the non-physician assets within Prospect Health. filed for bankruptcy under Chapter of We're working closely with the prospect team to ensure this filing does not impact our closed We still expect this transaction to close in 2-2-2025. Prospect has been performing in line with our expectations since the transaction was We have received their fiscal year 2024 audited.

John: In 2024, we announced the acquisition of the physician assets, along with the businesses and assets of prospect Health systems.

Chan Basho: We remain enthusiastic about the potential for the Prospect acquisition to significantly expand our provider network and enhance our ability to offer high quality, accessible care to our members. On 11 January 2025, the non-physician assets within Prospect Health System filed for bankruptcy under Chapter 11. We're working closely with the Prospect team to ensure this filing does not impact our close timing. We still expect this transaction to close in Q2 2025. Prospect has been performing in line with our expectations since the transaction was announced. We have received their fiscal year 2024 audited financials. For the calendar year 2024, Prospect generated $1.2 billion in revenue and $94 million in adjusted EBITDA.

John: We remain enthusiastic about the potential for the prospect acquisition significantly expands our provider network and enhance our ability to offer high quality accessible care to our members.

On January 11, 2025, the non physician assets within prospect health system filed for bankruptcy under chapter 11.

John: We're working closely with the prospect team to ensure this filing does not impact our close timing.

John: We still expect this transaction to close in Q2 2025.

John: Prospect has been performing in line with our expectations since the transaction was announced.

John: We have received their fiscal year 2024 audited financials.

Chandan Basho: For the calendar year 2024, Prospect generated $1.2 billion in revenue and $94 million in To give us financial flexibility ahead of the prospect acquisition, we have successfully replaced our previously committed $364 bridge with a new, upsized credit For more information visit www.fema.gov supported by an expanded and highly supportive lens. This new facility includes a $300 million revolver, a $250 million term loan aid, and a $745 million delay draw TLA for we were able to secure a reduction in price. Extended Maturity Date through 2029 and Enhanced Financial Coverage. giving us further flexibility, as well as strengthening our capacity.

John: For the calendar year, 2024 prospect generated $1 2 billion in revenue and $94 million and adjusted EBITDA.

Chan Basho: To give us financial flexibility ahead of the Prospect acquisition, we have successfully replaced our previously committed $364 million bridge with a new upsized credit agreement, supported by an expanded and highly supportive lender group. This new facility includes a $300 million revolver, a $250 million term loan A, and a $745 million delayed draw TLA for Prospect. We were able to secure a reduction in pricing, extended maturity date through 2029, and enhanced financial covenants, giving us further flexibility as well as strengthening our capital structure. As we have previously discussed, our best estimate of pro forma net leverage based on 2024 financials for Prospect and Astrana is approximately 3.4x at close. We remain committed to delever below the 3x range within 9 months post-close.

John: Hey, give us financial flexibility ahead of the prospect acquisition. We have successfully replaced our previously committed 364 bridge with a new Upsized credit agreement.

John: Supported by an expanded and highly supportive lender group.

John: This new facility includes a $300 million revolver of $250 million term loan a and a $745 million delayed draw TLA for prospect.

John: We were able to secure a reduction in pricing.

John: Extended maturity date through 2029 and enhanced financial covenants.

John: Giving us further flexibility as well as strengthening our capital structure.

Chandan Basho: As we have previously discussed, our best estimate of pro forma net leverage based on 2024 financials for Prospect and Astrana is approximately 3.4 times that For more information visit www.astrana.com We remain committed to D-Levr below the three times range within nine months.

John: As we have previously discussed our best estimate of pro forma net leverage based on 2020 for financials for prospect and our strata is approximately three four times at close we remain committed to delever below the three times range within nine months post close.

Chandan Basho: I'll wrap things up here by sharing our guidance for the full year 2025, guidance for the first quarter of 2025, and for the medium term. For the full year of 2025, we expect revenues to be in the range of $2.5 billion to $2.7 billion. with adjusted EBITDA projected between $170 million and $190 million. For the first quarter of 2025, we expect to generate between $600 million and $650 million of revenue, with adjusted EBITDA ranging between $32 million to $37 million. Finally, we want to reiterate our previously stated medium-term adjusted EBITDA guidance of at least $350 million in 2020.

Chan Basho: I'll wrap things up here by sharing our guidance for the full year 2025, guidance for Q1 2025, and for the medium term. For the full year of 2025, we expect revenues to be in the range of $2.5 to 2.7 billion, with adjusted EBITDA projected between $170 and 190 million. For Q1 2025, we expect to generate between $600 and 650 million of revenue, with adjusted EBITDA ranging between $32 to 37 million. Finally, we want to reiterate our previously stated medium-term adjusted EBITDA guidance of at least $350 million in 2027. Despite the current environment, we remain confident in our ability to drive sustainable, profitable growth.

John: I'll wrap things up here by sharing our guidance for the full year 2025 guidance for the first quarter of 2025 and for the medium term.

John: For the full year of 2025, we expect revenues to be in the range of $2 5 billion to $2 7 billion with adjusted EBITDA projected between $170 million and $190 million.

John: For the first quarter of 2025, we expect to generate between $600 million and $650 million of revenue with adjusted EBITDA ranging between $32 million to $37 million.

John: Finally, we want to reiterate our previously stated medium term adjusted EBITDA guidance of at least $350 million in 2027.

Chandan Basho: Despite the current environment, we remain confident in our ability to drive sustainable, profitable growth.

John: Despite the current environment, we remain confident in our ability to drive sustainable profitable growth.

Chandan Basho: I want to share several assumptions that we are making in providing 2025. On the cost trend, we are expecting mid-single-digit cost trend, similar to 2020. We're also including approximately $15 million in costs associated with continued strategic investments in integration, automation, and For more information visit www.FEMA.gov in line with our commitment. to risk progression, we anticipate approximately 75% to 85% of our revenue to be from full risk arrangements in 2025. The guidance we have shared today does not incorporate contributions from the anticipated close of process. However, it does reflect ongoing and expected integration costs associated with the process.

Chan Basho: I want to share several assumptions that we are making in providing 2025 guidance. On the cost trend, we are expecting mid-single-digit cost trend, similar to 2024. We're also including approximately $15 million in costs associated with continued strategic investments in integration, automation, and AI. In line with our commitment to risk progression, we anticipate approximately 75% to 85% of revenue to be from full risk arrangements in 2025. In addition, the guidance we have shared today does not incorporate contributions from the anticipated close of Prospect. However, it does reflect ongoing and expected integration costs associated with Prospect. We will update our outlook to include Prospect after the transaction closes, likely in the latter half of the year.

John: Unless you're several assumptions that we are making in providing 2025 guidance.

John: On the cost trend, we're expecting mid single digit cost trend similar to 2024.

John: We're also including approximately $15 million and costs associated with continued strategic investments in integration automation and AI.

John: In line with our commitment.

John: Two risks progression, we anticipate approximately 75% to 85% of our revenue to be from full risk arrangements in 2025.

John: In addition, the guidance we have shared today does not incorporate contributions from the anticipated close of prospect.

John: However, it does reflect ongoing and expected integration costs associated with the prospect.

Chandan Basho: We will update our outlook to include prospect after the transaction closes, likely in the latter half of the year.

John: We will update our outlook to include prospects after the transaction closes likely in the latter half of the year.

Chandan Basho: Lastly, I want to inform you that we will be filing a Form 12-B25 to extend the deadline for our annual report due to delays in finalizing certain financial information related to the closing of an acquisition during Q4 2021. We plan to file our 10K within the 15 days. We continue to make strategic decisions that we believe will deliver on long-term value for Astrana and its shareholders. We're pleased with the year and quarter and feel that Astrana is on a strong position for continued growth.

Chan Basho: Lastly, I want to inform you that we will be filing a Form 12b-25 to extend the deadline for our annual report due to delays in finalizing certain financial information related to the closing of an acquisition during Q4 2024. We plan to file our 10-K within the 15-day extension period. We continue to make strategic decisions that we believe will deliver on long-term value for Astrana and its shareholders. We're pleased with the year and quarter and feel that Astrana is on a strong position for continued growth. We look forward to keeping you updated as the year unfolds.

Lastly, I want to inform you that we will be filing a form <unk> 25 to extend the deadline for our annual report due to delays in finalizing certain financial information related to the closing of an acquisition during Q4 2024.

John: We plan to file our 10-K within the 15 day extension period.

John: We continue to make strategic decisions that we believe will deliver long term value for Australia and its shareholders.

John: We're pleased with the year end quarter.

John: And feel that Australia is on a strong position for continued growth.

Operator: We look forward to keeping you updated as the year with that operator.

John: We look forward to keeping you updated as the year unfolds.

Brandon Sim: With that operator, we can open it up for Q&A.

John: With that operator.

Operator: We can open it up for Q&A. Thank you. We will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone number. Confirmation Tone will indicate your line is in the question area. You may press star 2 if you would like to remove your question. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the button. One moment, please. Follow... Thank you.

Speaker Change: We can open it up for Q&A.

Operator 2: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Ryan Daniels with William Blair. Please proceed.

Chan Basho: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Ryan Daniels with William Blair. Please proceed.

Speaker Change: Thank you.

Speaker Change: We will now be conducting a question and answer session.

If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment, please pull for questions.

Speaker Change: Thank you.

Ryan Daniels: Our first question comes from the line of Ryan Daniels with William Blair.

Speaker Change: Question comes from the line of Ryan Daniels with William Blair. Please proceed.

Jack Stampton: Hey guys, this is Jack Stampton for Ryan. Thanks for taking the questions and congrats on the strong year in quarter. First, maybe just on the adjusted EBITDA guide, it looks like the margin is down, but also kind of flattish on a dollar basis. Can you guys just dive a little bit deeper into this, maybe on the bridge, just kind of what the puts and takes are, and you know, what kind of gets you to the low end of the adjusted EBITDA guidance range, and maybe what, you know, the higher end. Thanks.

Jack Slevin: Yeah. Hey, guys. This is Jack Slevin for Ryan. Thanks for taking the questions and congrats on the strong year-end quarter. First, maybe just on the adjusted EBITDA guide, it looks like the margin is down, but also kind of flattish on a dollar basis. Can you guys just dive a little bit deeper into this, maybe on the bridge, just kind of what the puts and takes are and, you know, what kind of gets you to the low end of the adjusted EBITDA guidance range and maybe what's, you know, the higher end? Thanks.

Jack: Yeah, Hey, guys. This is Jack I'm done for Ryan Thanks for taking the questions and congrats on the strong year and quarter.

Jack: First maybe just on the adjusted EBITDA guide it looks like the margin is down but also kind of flattish on a dollar basis can you guys just dive a little bit deeper into this maybe on the bridge is kind of what the puts and takes are and you know what kind of gets you to the low end of the adjusted EBITDA guidance range and maybe what are the higher end.

Chandan Basho: Thanks so much. In terms of our guide for 25, we're assuming a consistent four and a half percent trend. We're also assuming our continued investments next year. And then in terms of overall margin, the margin was down because of CHS next year.

Brandon Sim: Thanks so much. In terms of our guide for 25, we're assuming a consistent 4.5% trend. We're also assuming our continued investments next year.

Jack: Thanks, So much in terms of our guide for 'twenty, five where we're assuming a consistent 4.5% trend. We're also assuming a continued investments next year.

Jack Slevin: Okay.

Jack: Okay.

Brandon Sim: In terms of overall margin, the margin was down because of CHS next year.

Speaker Change: In terms of overall margin the margin was down because of CHS next year gotcha. Okay. Okay. Perfect. Thank you and then maybe if I can just add a quick follow up in here too you guys have a goal to delever to little over two times within the two years I think you said nine months after the close of the acquisition.

Jack Slevin: Gotcha. Okay. Okay, perfect. Thank you. Maybe if I can just add a quick follow-up in here too. You guys have a goal to delever to a little over 2x within 2 years. I think you said 9 months after the close of the acquisition. I think a chunk of this was supposed to come from the free cash flow conversion. Can you just give us, like, high-level comments on, you know, what you expect free cash flow to look like this year and then kind of like what levers you have to kind of drive the increased cash flow, you know, this year and then, and then post-acquisitions as well? Thanks.

Okay.

Chandan Basho: Perfect.

Chandan Basho: Thank you. And then maybe if I can just add a quick follow-up in here, too. You guys have a goal to de-lever to a little over two times within the two years, I think you said nine months after the close of the acquisition. And I think a chunk of this was supposed to come from the free cash flow conversion. So can you just give us like high-level comments on, you know, what you expect free cash flow to look like this year, and then kind of like what levers you have to kind of drive the increased cash flow, you know, this year and then post-acquisitions as well.

Speaker Change: And I think a chunk of this was supposed to come from the free cash flow conversion. So can you just give us like high level comments on you know what you expect free cash flow to look like this year and then kind of like what levers you have to kind of drive the increased cash flow. This.

Speaker Change: This year, and then and then post acquisitions as well thanks.

Chandan Basho: Thanks. Yeah, you you Free cash flow is a bit odd in 24 due to some one-time items. one related to host CHS that there's some one-time related items probably in the 10-ish million dollar range which will be recouped in 25 so you'll see that bump in free cash flow there. There's also an item around some licenses around software that ran through one time also. So you will see that revert next year and we've guided in the past free cash flow comes in about 45-ish percent of adjusted and you'll see that as a higher percentage in 25.

Brandon Sim: Yeah. Free cash flow is a bit odd in 2024 due to some one-time items. One related to post-CHS, there's some one-time related items probably in the $10-ish million range, which will be recouped in 2025, so you'll see that bump in free cash flow there. There's also an item around some licenses around software that ran through one time also. You will see that revert next year. We've guided in the past, free cash flow comes in about 45-ish% of adjusted, and you'll see that as a higher percentage in 2025.

Speaker Change: Yeah.

Speaker Change: Hugh.

Speaker Change: Free cash flow was a bit odd in 24 due to some one time items.

Speaker Change: One related to.

Speaker Change: Post CHS that there's some.

Speaker Change: One time related items, probably in that 10 ish million dollar range, which will be recouped in 25, so you'll see that bump in free cash flow there.

Speaker Change: There's also an.

Speaker Change: And item around.

Speaker Change: Some licenses.

Speaker Change: Around software that ran through one time also so.

Speaker Change: You will see that revert next year and we've guided in the past free cash flow comes in about 45 ish percent of adjusted and you'll you'll see that as a higher percentage in 'twenty five.

Chandan Basho: Okay, awesome.

Jack Slevin: Okay, awesome. Thank you again, guys, and congrats.

Speaker Change: Okay Awesome. Thank you again, guys and congrats.

Jack Stampton: Thank you again, guys, and congrats.

Chandan Basho: Thanks much.

Brandon Sim: Thanks much.

Speaker Change: Thanks, so much.

Speaker Change: Yeah.

Operator 2: Thank you. Our next question comes from the line of Michael Ha with Baird. Please proceed.

Operator: Thank you. Our next question comes from the line of Michael Ha with Baird. Please proceed.

Chandan Basho: Thank you.

Thank you. Our next question comes from the line of Michael Hall with Baird. Please proceed.

Michael Ha: Our next question comes... with Baird. Please Hi. Thank you. So, I understand your Medicaid trend has been running hotter this year. Think about 4 to 5 percent versus your original expectations. I think it's mainly driven by Proposition 35 and redeterminations. But then, as we head into next – this year, 25, with Proposition 35 now passed, redetermination headwinds subsiding as you get – as states reflect better rates, wouldn't that imply a pretty visible, sizable, even a bridge component here as this excess trend declines? If so, how should we think about the magnitude of that benefit? Because optically, super high level, 5 percent excess trend on your Medicaid revenue, I'm getting something like 30 million of embedded earnings, which is pretty significant.

Michael Ha: Hi. Thank you. I understand your Medicaid trend has been running hotter this year, I think about 4 to 5% versus your original expectations. I think it's mainly driven by, you know, Proposition 35 and redeterminations. As we head into this year, 2025, with Proposition 35 now passed, redetermination headwinds subsiding as states reflect better rates, wouldn't that imply a pretty visible, sizable EBITDA bridge component here as this excess trend declines? If so, how should we think about the magnitude of that benefit? Because optically, super high level, 5% excess trend on your Medicaid revenue, I'm getting something like $30 million of embedded earnings, which pretty significant. Just wondering if this is baked into guidance at all or if it could represent an upside driver.

Speaker Change: Hi, Thank you so I understand your Medicare trend have been running hotter. This year think about 4% to 5% versus your original expectations. I think it's mainly driven by our proposition 35, and Redetermination, but then as we head into next this year 25 with opposition 35 not passed.

Speaker Change: Redetermination headwinds with guiding as you get as states reflect better rates when it does.

Speaker Change: Imply a pretty visible sizable EBIT bridge component here as there's excess trend declines if so how should we think about the magnitude of that benefit because optically super high level, 5% extra spend on your Medicaid revenue I'm getting something like $30 million of embedded earnings which.

Michael Ha: So, just wondering if this is baked into guidance at all or if it could represent an upside driver.

Speaker Change: Significant so just wondering if this is baked into guidance at all or if it could represent an upside driver.

Chandan Basho: Hey, Michael, thanks for the question on Medicaid, especially. You're right. The Medicaid trend, as we got it, as we mentioned on the prepare to mark section of the call was. A lot higher than it was in prior years. It was, you know, in the 8 to 9 percent trend, and certainly Medicaid reimbursement did not improve by that much year over year from 23 to 24, which caused a much higher MLR in our Medicaid business, which did impact earnings from the Medicaid segment, as you had mentioned. You're right that Prop 35 has now passed. The state is still in a negotiation in terms of how that's going to be resolved with the large MCOs and then downstream of that with us.

Brandon Sim: Hey, Michael. Thanks for the question on Medicaid, especially. You're right. The Medicaid trend as we guided, as we mentioned on the prepared remarks section of the call, was a lot higher than it was in prior years. It was, you know, in the 8 to 9% trend. Certainly Medicaid reimbursement did not improve by that much year-over-year from 2023 to 2024, which caused a much higher MLR in our Medicaid business, which did impact earnings from the Medicaid segment, as you had mentioned. You're right that Proposition 35 has now passed. The state is still in a negotiation in terms of how that's gonna be resolved with the large MCOs and then downstream of that with us.

Speaker Change: Hey, Michael Thanks for the question on Medicaid, especially Youre right. The Medicaid trend as we got it as we mentioned on the prepared remarks section of the call was.

Speaker Change: Hmm a lot higher than it was in prior years. It was you know in the 8% to 9% trend.

Speaker Change: Certainly Medicaid reimbursement did not improve by that much year over year from 23 to 24 mm, which caused the much higher MLR in the Medicaid business.

Speaker Change: Which did impact earnings from the Medicaid segment as you had mentioned.

Speaker Change: Youre right that perhaps 35 has now passed at.

Speaker Change: The state is still under negotiation in terms of how that's going to be resolved with the large M. C. O's and then downstream of that with us.

Brandon Sim: No rate relief is contemplated in the guidance, which is intended to be conservative. We'll update given the flux of where Medicaid is today. We didn't want to bake in anything on Medicaid that we'd have to walk back later. The intent there is to just assume a similar trend in 2025 as in 2024, without any renegotiations of contracts or additional reimbursement from Medicaid in the $170 to $190 guide.

Chandan Basho: None of that is going to change. No rate relief is contemplated in the guidance, which is intended to be conservative. We'll update. Given the flux of where Medicaid is today, we didn't want to bake in anything on CAID that we'd have to walk back later. So the intent there is to just assume a similar trend in 2025 as in 2024 without any renegotiations of contracts or additional reimbursement from Medicaid. in the 170-190 gauge. Got it. Okay. So it sounds like it could be an upside driver once you're able to recognize it.

Speaker Change: None of that is.

Speaker Change: No rate relief is contemplated in the guidance.

Speaker Change: <unk>, which is intended to be conservative I will update give.

Speaker Change: Given the flux of.

Speaker Change: Where Medicaid is today, we didn't want to bake in anything on Cade.

Speaker Change: We'd have to walk back later, so the intent there is to just assume.

Speaker Change: A similar trend in 'twenty five as in 'twenty four.

Without any renegotiations of contracts or additional reimbursement for Medicaid.

Speaker Change: And the ones Ive got 190 <unk>.

Michael Ha: Got it. Okay. It sounds like it could be an upside driver once you're able to recognize it. Then I guess that my next question would be a couple on costs. I think you mentioned CHS approaching breakeven late in the year. Curious what you have embedded in guide for full year CHS dilution. Also the $15 million expected loss. I was wondering if you could help us sort of break out the buckets and. Sorry, lastly, for Prospect accretion, I know it's $94 million. The close is mid-year. Is it fair to assume half of that comes through? Or I know you mentioned ongoing costs for Prospect. How much would we expect for you guys to be making on that? Thank you.

Speaker Change: Got it okay. So it sounds like it could be an upside driver once.

Speaker Change: We were able to recognize it and then I guess that my next question would be a couple on costs. I think you mentioned CHS approaching breakeven late in the year curious what you have embedded in guide for full year CHS dilution also the $15 million expected.

Chandan Basho: And then I guess that my next question would be a couple on cost. I think you mentioned CHS approaching break-even late in the year. Here's what you have embedded in Guide for full year CHS dilution, also the $15 million expected cost. I was wondering if you could help us sort of break out the buckets. And sorry, lastly, for prospect accretion, I know it's $94 million, including mid-year. Is it fair to assume half of that comes through? Or I know you mentioned ongoing cost for prospect. How much would we expect for you guys to be making on that?

Speaker Change: I was wondering if you could help us sort of break out the buckets and sorry, and lastly for prospect accretion I know its $94 million. The Clinton mid year is it fair to assume half of that comes through or I know you mentioned ongoing cost for prospect how much what would we expect.

Speaker Change: He has been making on that thank you.

Chandan Basho: Thank you. Sure. We expect around $5 million to $10 million of integration costs that we've assumed will be hitting our books, hitting our P&L, and will be fully expensed. regardless of if and when the prospect transaction closes, whether that's in the middle of the year or slightly before that. And so I think the 170 to 190 guide includes those expenses, $5 to $10 million in integration and around $5 to $10 million in automation and building out the platform and technology investments, regardless, again, of when that closes. And we're booking those, we're expensing those costs in the P&L.

Brandon Sim: Sure. We expect around $5 to 10 million of integration costs that we've assumed will be hitting our books, hitting our P&L and will be fully expensed, regardless of if and when the Prospect Health transaction closes, whether that's in the middle of the year or slightly before that. I think the $170 to 190 guide includes those expenses, $5 to 10 million in integration, and around $5 to 10 million in automation and building out the platform and technology investments, regardless, again, of when that closes. We're booking those, we're expensing those costs in the P&L in anticipation of the close of the transaction.

Speaker Change: Sure.

Speaker Change: Expect around $5 million to $10 million of integration costs that we have assumed will be hitting our books are hitting our P&L and will be fully expensed.

Speaker Change: Regardless of if and when the prospect that transaction closes whether that's in the middle of the year or or.

Speaker Change: Or or slightly before that and so I think these 170 to 190 guide includes those expenses five to 10 million integration.

Speaker Change: And around $5 million to $10 million in.

Speaker Change:

Speaker Change: Automation and building out the platform and technology investments.

Speaker Change: Regardless of.

When that closes and we're booking those we're expensing those costs in the P&L.

Chandan Basho: and Anticipation of the Close of the Transaction. In terms of the transaction itself, based on the audited financials and the unaudited financials for the stub period, because their fiscal year ends, is not aligned with the calendar year. That's where the $94 million of Adjusted EBITDA comes from. We don't expect necessarily that the 2025 contribution will be $94 million. As we had guided before, we felt that $81 million was a better launch point. We wanted to share the $94 million number because it is based off of the audited financials that we've now received for a prospect, and we wanted to share that so that it's out there.

Speaker Change: In anticipation of the close of the transaction.

Brandon Sim: In terms of the transaction itself, based on the audited financials and the unaudited financials for the stub period, because their fiscal year end is not aligned with the calendar year, that's where the $94 million of adjusted EBITDA comes from. We don't expect necessarily that the 2025 contribution will be $94 million. As we had guided before, we felt that $81 million was a better launch point. We wanted to share the $94 million number because it is based off of the audited financials that we've now received for Prospect, and we wanted to share that so that it's out there.

Speaker Change: In terms of the transaction itself.

Speaker Change: At the based on the audited financials.

Speaker Change: The unaudited financials for the stub period, because their fiscal year ends.

Speaker Change: Aligned with the calendar year.

Speaker Change: That's where the $94 million of adjusted EBITDA comes from.

Speaker Change: We don't expect necessarily.

Speaker Change: That.

Speaker Change: The 2025 contribution will be $94 million.

Speaker Change: We had guided before we felt that $81 million was a was a better launch point.

Speaker Change: We wanted to share the 94 million number because it is based off of the audited financials that we've now received four prospect.

Speaker Change: We wanted to share that so that it's it's out there on.

Brandon Sim: On a go-forward basis, assuming that it closes, let's say at the end of the first half of the year, we would expect the run rate going forward to probably be closer to the $81 million number that we had formerly guided towards, based on our accounting and how we would present the results to the investor community.

Chandan Basho: On a go-forward basis, assuming that it closes, let's say, at the end of the first half of the year, we would expect the run rate going forward to probably be closer to the $81 million number that we had formerly guided towards, based on our accounting and how we would present the results to the investor community.

Speaker Change: On a go forward basis, assuming that it closes.

Speaker Change: At the end of the first half of the year.

Speaker Change: We would expect the run rate going forward to probably be closer to the 81 million number that we had formerly guided towards them based on our accounting.

Speaker Change: And how we would present the results to the Investor community.

Operator 2: Thank you. Our next question comes from the line of Jailendra Singh with Truist Securities. Please proceed.

Operator: Thank you. Our next question comes from the line of Jailendra Singh with Truist Securities. Please proceed.

Thank you.

Jailendra Singh: This question comes from a line of Dahlia. Yeah, hi, this is Jailendra Singh from Truist Securities. Thanks for all the color on the Medicaid rate acuity mismatch you talked about, which could be a potential upside, hopefully, in this year. But I also want to talk about the Medicaid, like the new administration seems to be focused on, you know, reimbursement cut there. Any comments on how some of these discussed possible cuts could impact your business, or does being in California insulate you, like kind of protect you in any way?

Speaker Change: Our next question comes from the line of.

Speaker Change: C.

Speaker Change: With <unk> Securities. Please proceed.

Jailendra Singh: Yeah. Hi, this is Jailendra Singh from Truist Securities. Thanks for all the color on the Medicaid rate acuity mismatch you talked about, which could be a potential upside, hopefully, in this year. But I also want to talk about the Medicaid, like the new administration seems to be focused on, you know, reimbursement cut there. Any comments on how some of these discussed possible cuts could impact your business? Or does being in California insulate you, like, kind of protect you in any ways?

Speaker Change: Yeah, Hi, this is <unk> Singh from <unk> Securities.

Speaker Change: Thanks for all the color on the Medicaid rebate acuity mismatch, you talked about which could be a potential upside hopefully are in this year, but I also want to talk about the Medicaid like the new administration seems to be focused on.

Speaker Change: Reimbursement got there any comments on how it's going to be discussed possible that could impact your business or does being in California, insulate you like kind of protect you in any way is.

Speaker Change: Yeah.

Chandan Basho: Hi, Jailendra. Thanks for the question. This is obviously an ongoing situation. A couple of weeks ago, we heard that Medicaid would not be touched. Obviously, that may or may not still be the case. We do believe that having almost all of our Medicaid membership in California does insulate us partially. Obviously, federal funding is still going to be an important part of the puzzle in terms of reimbursement in 2025 and go forward.

Brandon Sim: Hi, Jailendra. Thanks for the question. This is obviously an ongoing situation. A couple of weeks ago, we heard that Medicaid would not be touched. Obviously, that may or may not still be the case. We do believe that having almost all of our Medicaid membership in California does insulate us partially, although obviously federal funding is still gonna be an important part of the puzzle in terms of reimbursement in 2025 and go forward. I don't really want to comment or speculate at the moment, given I think it's unclear to probably most what the administration will do in terms of the funding for Medicaid and Medicaid expansion. I think what we're gonna do is ensure that we are taking care of the Medicaid patients that we do have.

Speaker Change: Hi, John Thanks for the question.

Speaker Change: You bet.

Speaker Change: This is obviously an ongoing situation.

A couple of weeks ago, we heard that.

Speaker Change: Medicaid would not be touched obviously that may or may not still be the case, but we do believe that having almost all of our Medicaid membership and.

Speaker Change: In California does insulate us partially although.

Speaker Change: Obviously federal funding is still going to be an important part of the puzzle in terms of reimbursement in 2025 and go forward I wish I don't really want to comment or speculate at the moment given I think it's unclear to probably the most what the administration will do in terms of the funding for Medicaid and Medicaid expansion I think what we're going to do.

Chandan Basho: I don't really want to comment or speculate at the moment, given I think it's unclear to probably the most what the administration will do in terms of the funding for Medicaid and Medicaid expansion. I think what we're going to do is ensure that we are taking care of the Medicaid patients that we do have. We're not assuming any reimbursement increases in our guidance, and we do believe that hopefully buller heads will prevail at the end of the day, and a very important part of the health care system is going to be preserved in terms of funding to Medicaid.

Speaker Change: Ensure that.

We are taking care of the Medicaid patients that we do have a we're not assuming any reimbursement increases in our guidance and we do believe that.

Brandon Sim: We're not assuming any reimbursement increases in our guidance. We do believe that, hopefully cooler heads will prevail at the end of the day and a very important part of the healthcare system is going to be preserved in terms of funding to Medicaid. In terms of California itself, again, we're not including any incremental reimbursement due to Prop 35 or any renegotiations that may occur throughout the year of 2025.

Speaker Change: Hopefully well or heads will prevail at the end of the day and a very important part of the.

Speaker Change: The health care system is going to be preserved in terms of funding to Medicaid.

Chandan Basho: In terms of California itself, again, we're not including any incremental reimbursement due to Prop 35 or including any renegotiations that may occur throughout the year of 2025.

Speaker Change: In terms of California itself again, we're not including any.

Speaker Change: Including any incremental reimbursement due to perhaps 35 or including any renegotiations that may occur throughout the year of 2025.

Chandan Basho: Okay, a quick follow-up. Clearly, very unfortunate events around California wildfires, but any sort of impacts you can talk about? Did you see in the business in Q1, did that perhaps lead to any impact on utilization worth calling out, any costs? And then also on the flu activity, just maybe you can combine like what you're captioning your Q1 comments. Sure.

Jailendra Singh: Okay. A quick follow-up, clearly very unfortunate events around California wildfires, but any sort of impacts you can talk about did you see in the business in Q1? Did that perhaps lead to any impact on utilization worth calling out, any costs? And then also on the flu activity, just maybe you can combine, like, what you're capturing in your Q1 comments.

Speaker Change: Okay.

Speaker Change: A quick follow up clearly a very unfortunate events.

Speaker Change: You pointed wildfires, but any sort of impacts we can talk about.

Speaker Change: Did you see in the business in Q1 did that perhaps lead to any impact on utilization, what's calling out any cost and then also on the flu activity. Just maybe if you can combine like what's your caption MEO Q Q1 comments.

Brandon Sim: Sure. Sorry, one last point on Medicaid. We do believe that the flexibility of the business model, as it has in the past with other disturbances to Medicaid, such as redeterminations, will allow us to partially offset some of the impact, if any. Again, we're waiting to see how this plays out as well. In terms of the wildfires, and then we'll tackle the flu afterwards. Certainly wildfires deeply affected our community, less than five miles away from our headquarters here in Los Angeles and displaced many families as well as families of our teammates. We had to close a few clinics, around six or seven clinics for a few days to a week, depending on the location. We don't anticipate this to have a meaningful impact on care delivery revenues in Q1.

Chandan Basho: One last point on Medicaid. We do believe that the flexibility of the business model As it has in the past with other disturbances to Medicaid, such as redeterminations, will allow us to partially offset some of the impact, if any. But again, we're waiting to see how this plays out as well. In terms of the wildfires, and then we'll tackle the flu afterwards, certainly the wildfires deeply affected our community, less than five miles away from our headquarters here in Los as well as families of our teammates. We had to close a few clinics, around six or seven clinics, for a few days to a week, depending on the location, but we don't anticipate this to have a meaningful impact on care delivery revenues in Q1.

Speaker Change: Sure sorry, one one last point on Medicaid, we do believe that the flexibility of the business model.

Speaker Change: As it has in the past with other disturbances to Medicaid such as Redetermination.

Speaker Change: Well allow us to partially offset some of the impact if any but again, we're waiting to see how this plays out as well in terms of the wildfires and then will tackled the flu afterwards.

Speaker Change: Certainly the wildfires deeply affected our community are less than five miles away from our headquarters here in Los Angeles, and displace many families as well as our families of our teammates.

Speaker Change: We.

Speaker Change: Had to close a few clinics are around six or seven clinics for a few days to a week depending on location.

But we don't anticipate this to have a meaningful impact on care delivery revenues in Q1.

Brandon Sim: In terms of utilization, we're not seeing material differences in inpatient utilization either, related to the fires, thankfully. I don't think there's gonna be material impact there either. In terms of the flu, some of you may remember that we called out a couple of quarters ago that we believed this flu quarter was gonna be, or this flu season rather, would be quite bad. It turns out it has been, maybe one of the worst in recent memory. At the time, we had thought so because of, you know, the very bad flu season in the Southern Hemisphere, that we were seeing early on in their winter season. We accrued for some of this in our trends, and we came in, as Sean mentioned earlier, around where we expected to come in.

Chandan Basho: In terms of utilization, we're not seeing material differences in inpatient utilization either related to the fires, thankfully, so I don't think there's going to be a material impact there either. In terms of the flu, some of you may remember that we called out a couple quarters ago that we believed this flu quarter was going to be, or this flu season, rather, would be quite quite bad, and it turns out it has been maybe one of the worst in recent memory, and at the time we had thought so because of, you know, the very bad flu season in the southern hemisphere that we were seeing early on in their winter season.

Speaker Change: Terms of utilization, we're not seeing.

Speaker Change: Material differences in inpatient utilization either.

Speaker Change: Relative to related to the fires thankfully, so I don't think theres going to be a material impact there either in terms of the flu.

Speaker Change: Some of you may remember that we called out a couple of quarters ago that we believed this flu quarter was going to be are the flu season, rather would be quite a while.

Speaker Change: Quite bad and it turns out it has been.

Speaker Change: Maybe one of the worst in recent memory.

Brandon Sim: At the time, we had thought so because of, you know, the very bad flu season in the Southern Hemisphere, that we were seeing early on in their winter season. We accrued for some of this in our trends, and we came in, as Sean mentioned earlier, around where we expected to come in. Given where we accrued and where we are continuing to accrue in 2025 in terms of our claims reserve, we feel comfortable with where trend will be with related to the flip.

Speaker Change: And at the time, we had thought so because of them.

Speaker Change: You know the very bad flu season in the southern Hemisphere and that we were seeing early on in their winter season, we accrued for some of this in our trends and we came in as John mentioned earlier around where we expect it to come in so given.

Chandan Basho: We accrued for some of this in our trend, and we came in, as Sean mentioned earlier, around where we expected to come in. So given... where we accrued and where we are continuing to accrue in 2025 in terms of our claims reserve. We feel comfortable with where trend will be related to the fluke.

Brandon Sim: Given where we accrued and where we are continuing to accrue in 2025 in terms of our claims reserve, we feel comfortable with where trend will be with related to the flip.

Speaker Change: Where we accrued and where we are continuing to accrue in 2025 in terms of our claims reserve and we felt comfortable with with where our trend will be.

Speaker Change: Related to the flu.

Jailendra Singh: Thank you.

Speaker Change: Thank you.

Chandan Basho: Thanks, Sandra.

Brandon Sim: Thanks, Jailendra Singh.

Brandon Sim: Thanks, Jailendra.

Speaker Change: Thanks Andre.

Operator 2: Thank you. Our next question comes to the line of Ryan Langston with TD Cowen. Please proceed.

Operator: Thank you. Our next question comes to the line of Ryan Langston with TD Cowen. Please proceed.

Speaker Change: Thank you. Our next question comes from the line of Ryan Levenson with.

Ryan Daniels: Question comes to the line. Great, thanks, good evening. Just want to go back to the guidance, the midpoint. seems to assume, I believe, a 6.9% margin. And you guys finished the year with 8.4, so 150 delta. I think the 15 million you called out might be worth around 60 basis points if we assume CHS is running around sort of a 10 million drag that might be another 40 So that leaves you another 50 basis points of decline So if my math is right Can you maybe just give us a sense on?

Speaker Change: With TD Cowen. Please proceed.

David Larsen: Great. Thanks. Good evening. Just wanna go back to the guidance. The midpoint seems to assume, I believe, a 6.9% margin, and you guys finished the year with 8.4, so a 150 delta. I think the $15 million you called out might be worth around 60 basis points if we assume CHS is running around sort of a $10 million drag, that might be another 40. That leaves you another 50 basis points of decline. If my math is right, can you maybe just give us a sense on what that other 50 basis points is or maybe just kind of an overall picture of what's driving that EBITDA margin decline year-over-year?

Ryan Langston: Great. Thanks. Good evening. Just wanna go back to the guidance. The midpoint seems to assume, I believe, a 6.9% margin, and you guys finished the year with 8.4, so a 150 delta. I think the $15 million you called out might be worth around 60 basis points if we assume CHS is running around sort of a $10 million drag, that might be another 40. That leaves you another 50 basis points of decline. If my math is right, can you maybe just give us a sense on what that other 50 basis points is or maybe just kind of an overall picture of what's driving that EBITDA margin decline year-over-year?

Ryan Levenson: Great. Thanks, good evening.

Ryan Levenson: Just wanted to go back to the guidance the midpoint seems to assume I believe a six 9% margin and you guys finished the year with $8. Four so 150 Delta I think the $15 million you called out it might be worth around 60 basis points. If we assume C. H S is running around.

Ryan Levenson: Sort of a 10 million drag that might be another 40. So that leaves you. Another 50 basis points of decline. So if my math is right can you maybe just give us a sense on what that other 50 basis points is or maybe just kind of an overall picture of what's what's driving that EBITDA margin declined year to year.

Ryan Daniels: What that other 50 basis points is or maybe just kind of an overall picture of what's what's driving that even a margin decline year-to-year?

Chandan Basho: Hey Ryan, great to hear from you. Thanks for the question and that thoughtful analysis. I think the main item is that we have Med-X trend that is increasing faster than faster than, I guess, our revenue. And so that's making up for that 50 basis points. Okay, got it.

Brandon Sim: Hey, Ryan, great to hear from you. Thanks for the question and the thoughtful analysis. I think the main item is that we have medical expense trend that is increasing faster than, I guess, our revenue. That's making up for that 50 basis points.

Brian: Hey, Brian good to hear from you. Thanks for the question.

Ryan Levenson: And that the thoughtful analysis.

Ryan Levenson: I think the main item is that we have med ex trend that is increasing faster than.

Ryan Levenson: Hum.

Ryan Levenson: Faster than I guess our revenue.

Ryan Levenson: And so that that's making up for that 50 basis points.

David Larsen: Okay. Got it. Then just one follow-up, if I could. I don't believe you were booking any profits on the MSSP side in 2024. Can you give us a sense on what's built into the guidance in terms of MSSP for 2025? I'll hop back in the queue. Thanks, guys.

Ryan Levenson: Okay got it and then just one follow up if I could.

Ryan Daniels: And then just one follow-up if I could. I don't believe you were booking any profits on the MSSP side in 2024. Can you give us a sense on what's built into the guidance in terms of MSSP? 25, and I'll hop back in the queue. Thanks. Thanks, Ryan. We did get further clarity around MSSP in terms of our data, and we felt we were in a good place to book MSSP-related revenues, so we did book $5 million in Q4. And so that five was for 24, and then for 23, we booked another between five to And then in terms of guidance for 25, we're booking five.

Ryan Levenson: I don't believe you were booking any profits on the MSP side in 2024 can you give us a sense on what's built into the guidance in terms of MSP for 2025, and I'll hop back in the queue. Thanks guys.

Brandon Sim: Thanks, Ryan. We did get further clarity around MSSP in terms of our data, and we felt we were in a good place to book MSSP related revenue. We did book $5 million in Q4. That 5 was for 2024, and then for 2023, we booked another between 5 to 6.

Ryan Levenson: Big trend, we we did get further clarity around M. S. S. P. In terms of hard data and we felt we.

Ryan Levenson: We were in a good place to book MSP related revenue. So we did book $5 million in Q4.

Ryan Levenson: And so that five was 424 and then for 'twenty three we booked another.

Between five to six.

Operator 2: Thank you.

Operator: Thank you.

Ryan Levenson: Okay.

Brandon Sim: In terms of guidance for 25, we're booking 5 to 6.

Ryan Levenson: And then.

Brandon Sim: In terms of guidance for 25, we're booking 5 to 6.

Ryan Levenson: And then in terms of guidance for 25, we're booking five to six.

Chandan Basho: Very helpful. Thank you. And sorry, just to clarify, we didn't book anything for 23. We weren't in the program in 23.

David Larsen: Very helpful. Thank you. Not for 2023.

Ryan Langston: Very helpful. Thank you. Not for 2023.

Ryan Levenson: Very helpful. Thank you.

Brandon Sim: Sorry, just to clarify, we didn't book anything for 2023. We weren't in the program in 2023.

And sorry, just to clarify we didn't book anything for 'twenty three we werent in the program.

Brandon Sim: Sorry, just to clarify, we didn't book anything for 2023. We weren't in the program in 2023.

Ryan Levenson: In 'twenty three.

Operator 2: Thank you. Our next question comes from the line of Adam Ron with Bank of America. Please proceed.

Operator: Thank you. Our next question comes from the line of Adam Ron with Bank of America. Please proceed.

Ryan Levenson: Thank you.

Adam Ron: This question comes from the line of Adam. Bank of America. Please...

Speaker Change: Our next question comes from the line of Adam Ron with Bank of America. Please proceed.

Ryan Levenson: Yeah.

Adam Ron: I think we're a little redundant, but I'm also going to ask about the guidance. So, you know, if I take out the new market costs you mentioned and integration costs you mentioned in 2025 and 2024, I come up with 5% EBITDA growth on a, let's call it, same market basis, even though revenue is up 28%. So this is effectively the margin question, but. It seems like a very, very wide difference between 28% revenue growth and 5% EBITDA growth. And I understand that probably the main factor is trend, but trend was really high in 24 as well.

Adam Ron: It was a little redundant, but I'm also gonna ask about the guidance. You know, if I take out the new market costs you mentioned and integration costs you mentioned in 2025 and 2024, I come up with 5% EBITDA growth on a, let's call it same market basis, even though revenue is up 28%. This is effectively the margin question, but it seems like a very, very wide difference between 28% revenue growth and 5% EBITDA growth. I understand that probably the main factor is trend, but trend was really high in 2024 as well. That implies a lot of this new revenue is coming in at, like, no margin.

Ryan Levenson: A little redundant but.

Ryan Levenson: So can I ask about the guidance so.

Ryan Levenson: If I take out the.

Ryan Levenson: The new market costs, you mentioned in the integration costs, you mentioned in 2025 and 2024.

Ryan Levenson: Come up with 5% EBITDA growth on a let's.

Ryan Levenson: Let's call it a market basis, even though revenue was up 28%.

And so this is it.

Ryan Levenson: Secondly, the margin question.

Ryan Levenson: It seems like a very very wide difference between 28% revenue growth and 5% EBITDA growth and I understand that probably the main factor is friends, but trend was really high in 24 as well.

Adam Ron: And so that implies a lot of this new revenue is coming in at like no margin. And so if you could just give more detail on. what you're expecting for trend and you know the the rate notice in LA is pretty strong for for medicare and it seems like alignment is talking about benefiting from that so I'm curious why you're not seeing more of the M.A. rate notice that has been, and specifically, you know, why trends... is coming in worse, if there's anything outside of Medicaid, I guess. Thanks.

Ryan Levenson: So that implies a lot of this new revenue is coming in at no margin.

Adam Ron: If you could just give more detail on what you're expecting for trend and, you know, the rate notice in LA is pretty strong for Medicare, and it seems like Alignment is talking about benefiting from that. Curious why you're not seeing more of the MA rate notice benefit and specifically, you know, why trend is coming in worse, if there's anything outside of Medicaid, I guess. Thanks.

Ryan Levenson: And so if you could just give more detail on.

Ryan Levenson: What you are expecting for trend in.

Ryan Levenson: The rate notice in L. A is pretty strong for Medicare It seems like alignment was talking about benefiting from that so.

Ryan Levenson: Curious why you're not seeing more of a M E rate notice benefit and specifically.

Ryan Levenson: Why trends.

Ryan Levenson: It was coming in worse.

Ryan Levenson: If there's anything outside of Medicaid I guess.

Ryan Levenson: Okay.

Chandan Basho: Hey Adam, thanks for the question. You're right. My answer might be similar to the margin question, which is that the two main drivers of revenue, which are the CHS acquisition continued movement to full risk, are fairly low margin. revenue drivers. As we noted earlier, CHS is coming in essentially at zero, close to break-even, and the first year forward conversions typically don't add too much margin either because it takes time to renegotiate. ensuring that we are doing enough. We'd rather do a little more than less, frankly, in terms of integration preparation for the anticipated close of the prospect deal.

Brandon Sim: Hey, Adam. Thanks for the question. You're right. My answer might be similar to the margin question, which is that the two main drivers of revenue, which are the CHS acquisition, continued movement to full risk, are fairly low margin revenue drivers. As we noted earlier, CHS is coming in essentially at zero, close to breakeven, and the first year of full risk conversions typically don't add too much margin either because it takes time to renegotiate and improve the unit economics on the inpatient side of a full risk contract. What we're focused on really is ensuring that we are doing enough. We'd rather do a little more than less, frankly, in terms of integration preparation for the anticipated close of the Prospect Health deal.

Ryan Levenson: Hey, Adam Thanks for the question.

Ryan Levenson: Youre right. Its a similar to my answer might be similar to the margin question, which is that the two main drivers of revenue which are.

Ryan Levenson: The CHS acquisition continued movement to full risk.

Ryan Levenson:

Ryan Levenson: Are fairly low margin.

Ryan Levenson: Revenue drivers.

Ryan Levenson: As we noted earlier CHS is coming in essentially at zero.

Ryan Levenson: Close to breakeven and the first year before raise conversions typically don't.

Ryan Levenson: And too much margin either because it takes time to renegotiate and.

Ryan Levenson: It improved the unit economics on the inpatient side of a forward contract.

Ryan Levenson: While we're focused on really is.

Ryan Levenson: Ensuring that we are doing enough, we'd rather do a little more than less frankly in terms of integration preparation for the anticipated close of the prospect deal.

Brandon Sim: We're really assuming very similar trends, from a cost perspective to 2024, in terms of the 4.5 to 5% trend, here in 2025. We're not expecting rates to go up as much as we would like. If there are changes to that throughout the year based on renegotiations with payers or with the state, or if there's clarity on Medicaid, we would update the street as such. I think the final reminder is that we're really still reiterating the 350, the at least $350 million adjusted EBITDA number in 2027. That hasn't changed at all. We're trying to be a little more conservative this year.

Chandan Basho: And we're really assuming very similar trend from a cost perspective to 2024 in terms of the 4.5% to 5% trend here in 2025. We're not expecting rates to go up. as much as. We would like if there are changes to that throughout the year based on renegotiations with payers or with the state, or if there's clarity on Medicaid, we would update the street as as such. I think the final reminder. is that we're really still reiterating the 350, the at least 350 million JustViva.Number in 2027. That hasn't changed at all. We're trying to be a little more conservative this year.

Ryan Levenson: And we're really assuming very similar trends.

Ryan Levenson: From a cost perspective to 2024.

Ryan Levenson: Of the four 5% to 5% trend.

Ryan Levenson: Here in 'twenty, five we're not expecting rates to go up.

Ryan Levenson: As much as.

Ryan Levenson: We would like them if there are changes to that throughout the year based on renegotiations of payers or with the state.

Ryan Levenson: Or if there's clarity on Medicaid we would update.

Ryan Levenson: St is as such.

Ryan Levenson: I think the final reminder.

Ryan Levenson: Is that were really still reiterating the 350, the abbvie is doing and $50 million just EBITDA number in 2027 and that Hasnt changed at all we're trying to be a little more conservative this year and I would also note that.

Chandan Basho: And I would also note that because of the base of adjusted EBITDA that we already had and reported in 2024. I would maybe just say that it's very different to improve off of a base. that high relative to peers in a challenging macro environment and an uncertain macro environment than to go from a small number to a slightly, you know, larger number.

Brandon Sim: I would also note that, because of the base of adjusted EBITDA that we already had and reported in 2024, I would maybe just say that it's very different to improve off of a base that high, relative to peers, in a challenging macro environment, in an uncertain macro environment, than to go from a small number to a slightly, you know, larger number.

Ryan Levenson: Because of our because of the base of adjusted EBITDA that we are that.

Ryan Levenson: We already had and reported in 2024.

Ryan Levenson: I would maybe just say that it's very different.

Ryan Levenson: To improve off of a base.

Speaker Change: Hi relative to peers.

Speaker Change: In a challenging macro environment and an uncertain macro environment than to go from a small number two a slightly.

Larger number.

Adam Ron: If I could follow on one thing you said, you mentioned race. So if you could talk about, I guess, like capturing race. So like on Medicaid, it has to do with like, the state has to give you money. But in terms of like, the payers, like, are you talking about how they're under pressure, and they don't want to, and they're like, cutting back on cap rates or something like if you can go into more detail, what you mean by not getting rates that you need to offset trend, that'd be helpful. Sure, it's not necessarily cutting back on CAP.

Adam Ron: If I could follow on one thing you said, you mentioned rates. If you could talk about, I guess, like capturing rates. Like on Medicaid, it has to do with like the state has to give you money. In terms of like the payers, like are you talking about how they're under pressure and they're like cutting back on cap rates or something? Like, if you can go into more detail on what you mean by not getting rates that you need to offset trend, that'd be helpful.

Speaker Change: If I could follow up on one thing you said and so you mentioned right. So if you could talk about I guess like capturing.

Speaker Change: Rates are like on Medicaid It has to do with like the state has to give you money.

Speaker Change: Terms of like the payers like are you talking about.

Speaker Change: They are under pressure and they don't want to and they were like cutting back on cap rates or something like if you can go into more detail on what you mean by not getting rates that you need to offset trend that'd be helpful.

Brandon Sim: Sure. It's not necessarily cutting back on cap. It's more there are certain rates that we have locked in for a period of time that don't contemplate the extraordinary trend that we're seeing, especially in Medicaid, where trend is very high single digits percentage. The payer contracts that we have are not, reimbursement is not going up anywhere near, you know, 8, 9% a year. Every year that continues on in terms of trend where reimbursement doesn't catch up, almost by definition, margin, you know, declines as a result. That's that combined with integration costs really make up some of the impact that you're seeing on the guidance.

Speaker Change: Sure.

Speaker Change: Necessarily cut.

Chandan Basho: It's more There are certain, there are rates that we have locked in for a period of time that don't contemplate the extraordinary trend that we're seeing, especially Medicaid, where trend is very high single digits percentage. The payer contracts that we have are not. Reimbursement is not going up anywhere near 8-9% a year, so every year that that continues on, in terms of trends, where reimbursement doesn't catch up, almost by definition, margin declines. as a result. So that's that combined with integration costs. really make up some of the impact that you're seeing on the guidance. All right, that's helpful.

Speaker Change: Cutting back on cap it's more.

Speaker Change: There are certain there are rates that we have locked in for a period of time that don't contemplate the extraordinary trend that we're seeing especially in Medicaid where trend is very high single digits percentage.

Speaker Change: A pair of contracts that we have or not.

Speaker Change: Reimbursement is not going up anywhere near you know eight 9% a year.

Speaker Change: Every year that that continues on in terms of trend where reimbursement doesn't catch up.

Speaker Change: Hum.

Speaker Change: Almost by definition margin declines.

Speaker Change: As a result, so that's that combined with integration costs.

Speaker Change: Really make up some of the impact that you're seeing on the guidance.

Adam Ron: Okay. That's helpful. Appreciate it.

Speaker Change: Okay. That's helpful. I appreciate it.

Chandan Basho: Appreciate it. Sure.

Brandon Sim: Sure. Thanks.

Craig Jones: Thanks. This question comes from the line of Craig Jones. Hey, yeah, thanks for the question. So, I was really hoping to get an update on the Houston and Las Vegas markets. I think you're, you know, exiting year two and entering year two, or sorry, exiting year three in the middle of year two in those markets. Just wondering, yeah, how they're trending. Thanks. Hey, good to hear from you. Thanks for the question.

Speaker Change: Sure. Thanks.

Speaker Change: Yeah.

Operator 2: Thank you. Our next question comes from the line of Craig Jones with Stifel. Please proceed.

Brandon Sim: Thank you. Our next question comes from the line of Craig Jones with Stifel. Please proceed.

Speaker Change: Thank you. Our next question comes from the line of Craig Jones with Stifel. Please proceed.

Craig Jones: Hey, yeah, thanks for the question. I was really hoping to maybe get an update on the Houston and Las Vegas markets. I think you're, you know, exiting year three in the middle of year two in those markets. Just wondering how they're trending. Thanks.

Craig Jones: Hey, yeah.

Speaker Change: Thanks for the question so.

Speaker Change: I was really hoping if we could get an update on the Houston and Las Vegas markets.

Speaker Change: Exiting two and entering into or sorry, I didn't hear.

Speaker Change: Three two in those in those markets just wondering.

Speaker Change: Hello, Good morning. Thanks.

Brandon Sim: Hey, good to hear from you. Thanks for the question. On slide five of our supplemental deck, we did provide a couple of updates on both Nevada as well as our Texas markets. They continue to ramp within expectations. For example, Nevada, I'll just provide some highlights. Care delivery visits year-over-year grew by 58%. We're at around a $200,000 a month loss at the moment, and we expect to be breakeven to profitable in early 2025, probably in a couple of months here. In Texas, similar story. We may be even a little faster. We're on track to break even already in 2025, and start turning a profit late 2025, early 2026.

Speaker Change: Hey, good to hear from you. Thanks for the question.

Chandan Basho: On slide five of our Supplemental Deck, we did provide a couple of updates on both Nevada as well as our Texas markets. They continue to ramp within expectations. For example, Nevada, I'll provide some highlights, care delivery visits year-over-year grew by 58 percent. We're at around a $200,000 a month loss at the moment, and we expect to be break-even to profitable in early 2025, probably in a couple months here. In Texas, similar story, maybe even a little faster. We're on track to break-even already in 2025 and start turning a profit late 2025, early 2026. Non-California business will represent around 15 percent of revenue in 2025, and that number appears to grow given the rate of growth in those non-California markets.

Speaker Change: On slide.

Speaker Change: Five of our supplemental deck, we did provide a couple of updates on both Nevada as well as our Texas markets.

Speaker Change: Continue to ramp within expectations.

Speaker Change: For example, in Nevada, I'll provide some highlights keratome revisits year over year grew by 58% right around.

Speaker Change: $200000 a month loss at the moment and we expect to be breakeven to profitable in early 2025, probably in a couple of months here.

Speaker Change: In Texas similar story, we maybe even a little faster we're on track to breakeven already in 2025 mm and start turning a profit.

Late 'twenty 'twenty five early 2026.

Brandon Sim: Non-California business will represent around 15%, 15% of revenue in 2025, and that number appears poised to grow given the rate of growth in those non-California markets.

Speaker Change: Non California business will represent around 15% one 5% of revenue in 2025 and that number appears poised to grow given the rate of growth.

Speaker Change: Those non California markets.

Chandan Basho: Okay, great. Thanks. And then just to follow up on an answer you just gave on the Medicaid contract, I think you said the rates are locked in for a certain period of time. How frequently are those renegotiated? And you know, how fast could you? sort of try and adjust for the higher trends. Typically takes, it really depends on the contract, you know, two to three years, typically, and they're, they're all kind of staggered. So it really is a continual process that we're engaged in. If Trend were to abate, if we're able to get any kind of relief from the state, there's some of the regulatory overhang on Medicaid that goes away.

Craig Jones: Okay, great. Thanks. Just to follow up on an answer you just gave on the Medicaid contracts, I think you said the rates are locked in for a certain period of time. How frequently are those renegotiated? You know, how fast could you sort of try and adjust for the higher trends?

Speaker Change: Okay, great. Thanks, and then just to follow up on that.

Speaker Change: The answer you just gave on the Medicaid contract and he said the rates are locked in for a certain period of time.

Speaker Change: Are those renegotiated and how fast could you.

Speaker Change: China adjust for the higher trend.

Brandon Sim: Typically, it takes. It really depends on the contract. You know, 2 to 3 years, typically. They're all kind of staggered. It really is a continual process that we're engaged in. If trend were to abate, if we're able to get any kind of relief from the state, there's some of the regulatory overhang on Medicaid that goes away. I think that really helps. That's just an ongoing process that we're engaging in.

Speaker Change: Typically it takes it really depends on the contract.

Speaker Change: Two to three years typically in there, they're all kind of staggered so.

Speaker Change: It really is a continual process that we're engaged in.

Speaker Change:

Speaker Change: If trend if we're able to get any kind of relief from the state. There is some of the regulatory over hang on Medicaid that that goes away I think that really helps.

Brooks O'Neill: I think that really helps. That's just an ongoing process that we're engaging in. Okay, great. Thanks for talking to me. Thank you.

Speaker Change: But.

Speaker Change: That's just an ongoing process that where we're engaging in.

Speaker Change: Yeah.

Craig Jones: Okay, great. Thanks. Talk to me.

Speaker Change: Okay, great. Thanks, Stephanie.

Brandon Sim: Thank you.

Speaker Change: Thank you.

Operator 2: Thank you. Our next question comes from the line of Brooks O'Neil with Lake Street. Please proceed.

Operator: Thank you. Our next question comes from the line of Brooks O'Neil with Lake Street. Please proceed.

Speaker Change: Thank you. Our next question comes from the line of Brooks O'neil with Lake Street. Please proceed.

Brooks O'Neill: Our next question comes from the line of Brooks O'Neill with Lake Street. Thank you very much. So, Brandon, you just alluded to slide five. I want to ask you about slide six. in the supplemental deck, and you mentioned that the transition to full risk arrangements in year one has very little impact. But I see the increasing trend on slide six, and I guess it was my assumption that that would be a potentially very favorable transition for you guys. So maybe you could just talk a little bit about the underlying economics. in those arrangements, maybe why you're pursuing those and what the longer-term opportunity might be.

Adam Ron: Thank you very much. Brandon, you just alluded to slide five. I wanna ask you about slide six in the supplemental deck. You mentioned that the transition to full risk arrangements in year one has very little impact. I see the increasing trend on slide six, and I guess it was my assumption that that would be a potentially very favorable transition for you guys. Maybe you could just talk a little bit about the underlying economics in those arrangements, maybe why you're pursuing those and what the longer term opportunity might be.

Brooks O'Neil: Thank you very much. Brandon, you just alluded to slide five. I wanna ask you about slide six in the supplemental deck. You mentioned that the transition to full risk arrangements in year one has very little impact. I see the increasing trend on slide six, and I guess it was my assumption that that would be a potentially very favorable transition for you guys. Maybe you could just talk a little bit about the underlying economics in those arrangements, maybe why you're pursuing those and what the longer term opportunity might be.

Speaker Change: Thank you very much so.

Speaker Change: Brandon you just alluded to this slide five I wanted to ask you about slide six.

Speaker Change: In the supplemental deck, you mentioned that the transition to full risk arrangements in year, one has very little impact, but I think the increasing trend.

Speaker Change: On slide six and I guess it was my assumption that that would be a potentially very favorable a transition for you guys. So maybe you could just talk a little bit about the underlying economics.

Speaker Change: And those arrangements may be why you're pursuing those and what the longer term opportunity might be.

Chandan Basho: Thanks so much for the question Brooks. As you highlighted, we continue in our pathway to expanding to full risk contracts. We are focused on this because we truly believe that with these incremental dollars, we can differentially continue to invest in our members. As you can see, it's not an immediate impact. in terms of year one. Over time, through these investments, we will start seeing through high quality and access to care, we will see trend change. And that is why we're embarking on this journey for the last few years, and that is why we'll continue to do so.

Brandon Sim: Thanks so much for the question, Brooks. As you highlighted, we continue in our pathway to expanding to full risk contracts. We are focused on this because we truly believe that with these incremental dollars, we can differentially continue to invest in our members. As you can see, it's not an immediate impact in terms of year one. Over time, through these investments, we will start seeing through high quality and access to care, we will see trend change. That is why we're embarking on this journey for the last few years, and that is why we'll continue to do so. You can see in slide 6 the improvements beyond that two-thirds level that we had discussed in the past.

Speaker Change: Thanks, So much for the question Brooks as as you highlighted we continue on our pathway to expanding too.

Speaker Change: Full risk contracts.

Speaker Change: We are focused on this because we truly believe that with these incremental dollars. We can differentially continue to invest in our.

Speaker Change: Members as you can see it's not a immediate impact.

Speaker Change: In terms of year one.

Speaker Change: Over time through these investments we will start seeing.

Speaker Change: Through high quality and.

Speaker Change: Access to care, we we will see trend change.

Speaker Change: Change.

Speaker Change: And that is why we are embarking on this journey for the last few years and and that is why we will continue to do so and you can see in slide six the improvements beyond that two thirds level that we had discussed in the past.

Chandan Basho: And you can see in slide six the improvements beyond that two-third level that we had discussed The bottom line is you think over time, you can. and reduce, I guess I'd say, utilization on the impatient side of the business. Yeah, through preventative care, we will be able to right-size utilization and help members get care. before it turns into a larger event. Yep. Great. Okay. Thank you very much. Thanks, Brooks.

Brooks O'Neil: Bottom line is you think over time you can reduce, I guess I'd say, utilization on the inpatient side of the business?

Speaker Change: So bottom line as you think over time you can.

Speaker Change: Hum reduce I guess I'd say utilization on the.

Speaker Change: Inpatient side of the business.

Brandon Sim: Yeah. Through preventative care, we will be able to right-size utilization and help members get care before it turns into a larger event.

Speaker Change: Yeah through preventative care, we will be able to.

Speaker Change: Right size utilization and helped members get care.

Speaker Change: Before it turns into a.

Speaker Change: A larger event.

Brooks O'Neil: Yep. Great. Okay, thank you very much.

Speaker Change: Yep great. Okay. Thank you very much.

Brandon Sim: Thanks, Brooks.

Speaker Change: Thanks Brooks.

Operator 2: Thank you. Our next question comes from the line of David Larsen with BTIG. Please proceed.

Operator: Thank you. Our next question comes from the line of David Larsen with BTIG. Please proceed.

Speaker Change: Thank you our next.

Dave: Question comes to the line. and PID. Please. Hi, can you talk about the completeness of data for 2024? It looks like a 5.3% trend for the year and you're guiding like, I think, four and a half. Quite frankly, that sounds very good to me. Some of your peers were like in the 7% to 9% range for the first three quarters of 24. I guess I just worry about, you know, being surprised with additional claims files from health plans. Just any sort of comfort you can provide around that would be great. Thank you.

Speaker Change: Question comes from the line of David Larsen with <unk>.

Speaker Change: Please proceed.

David Larsen: Hi. Can you talk about the completeness of data for 2024? It looks like a 5.3% trend for the year, and you're guiding like, I think 4.5. Quite frankly, that sounds very good to me. Some of your peers were like in the 7% to 9% range for Q1, Q2, Q3 2024. I guess I just worry about, you know, being surprised with additional claims files from health plans. Just any sort of comfort you can provide around that would be great. Thank you.

Speaker Change: Hi can you talk about the completeness of data for 2024, it looks like a five 3% trend for the year and you're guiding like I think four and a half.

Speaker Change: Quite frankly that sounds very good to me.

Speaker Change: Some of your peers, where like in the 7% to 9% range for the first three quarters of 'twenty four.

Speaker Change: I guess I just worry about you know being surprised with additional claims files from health plans just.

Speaker Change: Any sort of comfort.

Speaker Change: Comfort you can provide around that would be great. Thank you.

Chandan Basho: Hey, hey, Dave. Thanks for the question. Claims reserves that we have, the IB&R reserves that we have are not based just on our claims triangles necessarily, but also include some of the initial information that we have in terms of authorizations and other leading indicators of usage or utilization as we had mentioned before. So I think that's something that we feel fairly confident about. We also pay the vast majority of our own claims, which gives us quick visibility into how claims are developing. And so we feel fairly confident that that trend is. is very close to what it will be going forward.

Brandon Sim: Hey, hey Dave. Thanks for the question. The claims reserves that we have, the IBNR, you know, reserves that we have are not based just on our claims triangles necessarily, but also include some of the initial information that we have in terms of authorizations, and other leading indicators of usage or utilization as we had mentioned before. I think that's something that we feel fairly confident about. We also pay the vast majority of our own claims, which gives us quick visibility into how claims are developing. We feel fairly confident that that trend is very close to what it will be. Going forward, again, I think this is maybe what you're getting at, which is that the trend seems decent, relative to the industry and the challenges that are being faced.

David: Hey, Hey, David Thanks for the question.

Speaker Change: The.

Speaker Change: Claims reserves that we have the IP and our reserves that we have are not based just on our claims.

Speaker Change: <unk> necessarily but also include some of the additional information that we have in terms of authorizations.

Speaker Change: And other leading indicators of usage or utilization as we had mentioned before so I think that's something that we feel fairly confident about we also pay the vast majority of our own claims which gives us quick visibility into how claims are developing.

So we feel fairly confident that that trend is.

Speaker Change: Is it very close to what it will be.

Speaker Change: Going forward.

Chandan Basho: Again, I think this is maybe what you're getting at, which is that the trend. seems decent relative to the industry and the challenges that are being faced. Keep in mind, this also includes V28 impact, which still is phasing in in 2025. And so I think the question is, why is there not a larger increase at the midpoint in guidance? And I really want to reiterate that there are some large integration costs. We'd rather be safe than sorry on integration and do things correctly. There are investments we're making so that we can... Smash 2 is a 350 number that we put out in the medium term.

Speaker Change: Again I think this is maybe what you're getting at which is that the trend.

Speaker Change: It seems decent relative to the industry and the challenges that are being faced keep.

Brandon Sim: Keep in mind this also includes V28 impact which still is phasing in in 2025. I think the question is why is there not a larger increase at the midpoint in guidance. I really wanna reiterate that there are some large integration costs. We'd rather be safe than sorry on integration and do things correctly. There are investments we're making so that we can smash through the $350 number that we put out in the medium term. Frankly, we're not trying to optimize for the 2025 year. We're optimizing for long-term value creation, and we believe that this is what needs to be done to not only meet but surpass the $350 million that we promised for 2027.

Speaker Change: Keep in mind. This also includes 28.

Speaker Change: <unk> impact, which which still is phasing in in 2025, and so I think the question is why is there not a larger increase at the midpoint and guidance and I really want to reiterate that.

Speaker Change: There are some large integration costs, we'd rather be safe than sorry on integration and do things correctly. There are investments, we're making so that we can.

Speaker Change: Smashed you had the 350 number that we put out in the medium term.

Speaker Change: Frankly, we're not trying to.

Speaker Change: Uh huh.

Chandan Basho: We're not trying to optimize for the 2025 year. We're optimizing for long-term value creation. And we believe that this is what needs to be done to not only meet but surpass the $350 million that we promised for 2027. The path there doesn't necessarily look up and to the right, but it does mean that we are making investments now for the future you Even if that means we're taking on, you know, relatively lower margin pockets of business, I would also argue that There are, because of the trend that we're seeing, 5.3% in 2024, 4.5% to 5% maybe in 2025 in the guidance, that is why our Adjusted EBITDA is where it is.

Speaker Change: We're not trying to optimize for the 2025 year, we're optimizing for long term value creation and we believe that this is what needs to be done to.

Speaker Change: Not only meet or surpass the 350 million that we promised for 2027.

Brandon Sim: The path there doesn't necessarily look up and to the right, but it does mean that we are making investments now for the future, even if that means we're taking on, you know, relatively lower margin pockets of business. I would also argue that there are, because of the trend that we're seeing, you know, 5.3% in 2024, 4.5 to 5% maybe in 2025, in the guidance, that is why our adjusted EBITDA is where it is. And again, I think it's much more challenging to be growing at this pace while putting up, you know, $170 million of adjusted EBITDA for 2024. Not sure if that answers the question, Dave, but I just wanted to mention that.

Speaker Change: There doesn't necessarily look up into the right.

Speaker Change: But it doesn't mean that we are making investments now for the future.

Speaker Change: Even if that means we're taking on relatively lower margin pockets of business.

Speaker Change: I would also argue that.

Speaker Change: There are because of the trend that we're seeing a five 3% in 'twenty 'twenty four 4.5% to 5% maybe in 2025 and the guidance.

Speaker Change: That is why our adjusted EBITDA is where it is.

Chandan Basho: And again, I think it's much more challenging to be growing at this space while putting up $170 million of Adjusted EBITDA for 2024. Not sure if that answers your question, Dave, but I just wanted to mention that. It does answer my question. Thank you.

Speaker Change: Again, I think it's much more challenging to be growing at this space, while putting up 170 million of adjusted EBITDA for 'twenty 'twenty four I'm not sure if that answers your question David but.

Speaker Change: Just wanted to mention that.

David Larsen: It does answer my question. Thank you. Then for Prospect at maturity, what would you expect, you know, the margin to be? I think you're being conservative with sort of breakeven. I mean, what's interesting is, fine, 93% of the revenue is capitated, but that's only 33% of members, which means you have a lot of runway to go to basically grow your fully capitated revenue book. What would you expect the Prospect margins to be at maturity, let's call it in three years?

David: It does he answered my question. Thank you and then.

Chandan Basho: And then for prospect at maturity, what would you expect? You know, the margin to be I think you're being conservative with sort of break even. And I mean, what's interesting is fine. 93% of the revenue is capitated, but that's only 33% of members, which means You have a lot of runway to go to basically grow your fully capitated revenue book. What would you expect the prospect margins to be at maturity, let's call it in three years? Yeah. I may have misheard you, so I apologize, but I think when you mentioned margins being close to breakeven, you may have meant CHS, and maybe that's what you said, but CHS is breakeven.

David: For prospect at maturity, what would you expect.

David: The margin to be I think you're being conservative with sort of breakeven.

David: And I mean, what's interesting is find 93% of the revenue is capital needed, but that's the only 33% of members which means.

David: You have a lot of runway to two to go to basically grow your fully compensated.

David: Revenue book So.

David: What would you expect the prospect margins to be at that maturity, let's call. It three years.

Brandon Sim: Yeah. I may have misheard you, so I apologize, but I think when you mentioned margins being close to break even, you may have meant CHS, and maybe that's what you said, but CHS is break even. We do anticipate that, given the mix of ACO REACH and MSSP members versus Medicare Advantage members, probably in the low- to mid-single-digit percentages at scale. For Prospect Health, which is coming in at, you know, mid- to high single digits, we expect that to be 7 to 8% at scale, which is similar to our existing business, especially given the similarity of the delegated model and the similarity of the geographic regions of the members and where they live. In terms of the full risk conversion, you're right.

David: Yeah.

Speaker Change: I may have misheard, you I apologize, but I think when you mentioned margins being close to breakeven.

Speaker Change: You may have been CHS and maybe that's what you said, but he gets his breakeven we do anticipate that to be in.

Chandan Basho: We do anticipate that to be in the, given the mix of ACO reach and MSSP members versus Medicare Advantage members, probably in the low to mid single-digit percentages at scale. Thank you. you know, mid to high single digits, we expect that to be seven, eight percent at scale, which is similar to our existing business, especially given the similarity of the delegated model and the similarity of the geographic regions of the members and where they live. And then in terms of the full risk conversion, you're right. Even though 73 percent of the revenue comes from a full risk value-based contract, only a third of the members are in such a contract.

Speaker Change: In the given the mix of ACO reach an MSP members versus Medicare advantage members.

Speaker Change: Probably in the low to mid single digit percentages that scale for prospect, which is coming in at.

Speaker Change: You know mid to high single digits, we expect that to be 7% to 8% at scale, which is similar to our existing business, especially given the similarity of the delegated model.

Speaker Change: The similarity of the geographic.

Speaker Change: Region of regions of the members and where they live.

Speaker Change: And then in terms of the full risk conversion youre right, even though 73% of their revenue comes from our forest value based contract only a third of the members are in such a contract and so your point.

Brandon Sim: Even though 73% of the revenue comes from a full risk value based contract, only a third of the members are in such a contract. Your point is absolutely correct. There's still a lot of runway to go in terms of moving additional members into full risk arrangements. We continue to do that in cohorts even as we speak. There were additional members that went live 1 January. There are additional members that will go live in February or in March, and that's a continual process. Of course, the percentage of revenue that is associated with full risk is going to, you know, asymptotically kinda taper off over time, but the number of members will continue to grow, probably into the, you know, 50, 55% range.

Chandan Basho: And so your point is absolutely correct. There's still a lot of runway to go in terms of moving additional members into full risk arrangements. We continue to do that in cohorts. even as we speak. There are additional members that went live 1-1. There are additional members that will go live in February or in March, and that's a continual process. Of course, the percentage of revenue that is associated with full risk is going to, you know, asymptotically kind of taper off over time, but the number of members will continue to grow probably into the, you know, 50, 55 percent range.

Speaker Change: It's absolutely correct, there's still a lot of runway to go in terms of moving digital members into full risk arrangements, we continue to do that in cohorts.

Speaker Change: Even as we speak there are additional members that went live one one there are additional members that will go live in fed.

Speaker Change: Later in March and that's a continual process of course.

Speaker Change: The percentage of revenue that is associated with full Richard's going to asymptotically kind of taper off overtime, but the number of members will continue to grow probably.

Speaker Change: Probably into the you know.

Speaker Change: 50, 55% range.

Chandan Basho: As I mentioned before, not all the members wind up in a full risk arrangement, just given dynamics around growth, not wanting to put members in a full risk arrangement day one, something we've never done, as well as the commercial line of business.

Brandon Sim: As I mentioned before, not all the members will end up in a full risk arrangement, just given dynamics around growth, not wanting to put members in a full risk arrangement day one, something we've never done, as well as the commercial line of business.

Speaker Change: As Ive mentioned before not all of the members wind up in a full risk arrangement just given the dynamics around growth are not wanting to put memories and a former screen. They won something we've.

Speaker Change: Never done.

Speaker Change: As well as commercial lines the commercial line of business.

Matt Gilmore: Okay, great, thanks very much. I'll hop back in the queue. Looks like a very good, well-managed trend. Congrats, I'll hop back in the queue, thanks. Thanks, Dave.

David Larsen: Okay, great. Thanks very much. I'll hop back in the queue. Looks like, very good, well-managed trend. Congrats. I'll hop back in the queue. Thanks.

Speaker Change: Okay, great. Thanks, very much I'll hop back in the queue. It looks like very good well managed trend.

Speaker Change: Congrats I'll hop back in the queue. Thanks.

Brandon Sim: Thanks, Dave.

Dave: Thanks, Dave.

Operator 2: Thank you. Our next question comes from the line of Matthew Gilmore with KeyBanc Capital Markets. Please proceed.

Operator: Thank you. Our next question comes from the line of Matt Gilmore with KeyBanc Capital Markets. Please proceed.

Thank you.

Chandan Basho: This question comes from the line of Matt Gilmore with KeyBank. Hey guys, this is Akon for Matt. Just on the $10 million annualized AI savings, wondering if you could quantify that in terms of incremental benefit in 2025 and 2026, and maybe just your long-term thoughts on that opportunity going forward, especially as prospect is integrated. Sure. Maybe I'm misinterpreting the question. So just let me know. The we are spending around $15 million in integration and development for AI in 2025. We expect that to translate into 10 million, approximately $10 million of savings in 2026 that will probably show up in the G&A line, and that will probably continue to grow into 2027.

Speaker Change: Next question comes from the line of Matt Gillmor with Keybanc capital markets. Please proceed.

[Analyst] (KeyBanc Capital Markets): Hey, guys. This is Zach on for Matt. Just on the $10 million annualized AI savings. Wondering if you could quantify that in terms of incremental benefit in 2025 and 2026, and maybe just your longer-term thoughts on that opportunity going forward, especially as Prospect is integrated. Thanks.

Dave: Hey, guys. This is Eric on for Matt.

Speaker Change: Just on the $10 million annualized.

Speaker Change: Savings I'm wondering if you could quantify that in terms of incremental Baffin 25, and 26 and maybe just your longer term thoughts on.

Speaker Change: That opportunity going forward, especially as prospectus integrated thanks.

Brandon Sim: Sure. Maybe I'm misinterpreting the question, so just let me know. We are spending around $15 million in integration and development for AI in 2025. We expect that to translate into approximately $10 million of savings in 2026. That will probably show up in the G&A line. That will probably continue to grow into 2027. That would be the approximate magnitude of the investments and then the approximate value of the savings. All of that would flow, you know, flow through down to P&L or to EBITDA.

Speaker Change: Sure.

Speaker Change: Maybe I Miss interpreting your question just let me know.

Speaker Change: We are spending around $15 million in integration and development for AI in 2025, we expect that to translate into 10 approximately $10 million of.

Speaker Change: Savings in 2026 that will probably show up in the G&A line.

Speaker Change: And that will probably continue to grow into 2027 so.

Chandan Basho: So that would be the approximate magnitude of the investments and then the approximate value of the savings. And all of that would flow, you know, flow through down to P&L or to EBITDA.

Speaker Change: That would be the approximate magnitude of the investments and then the approximate.

Speaker Change: The value of the savings.

Speaker Change: And all of that would flow through down to P&L or to EBITDA.

Chandan Basho: Okay, thank you.

[Analyst] (KeyBanc Capital Markets): Okay. Thank you. Just on the newer markets, can you maybe just speak to the operational playbook that you use to achieve break even, you know, in years one, two, and then beyond that? Kind of what are the big factors that you need to work on to bring a market to break even, and move beyond that?

Speaker Change: Okay. Thank you and then just on the newer markets can you maybe just speak to the operational playbook that you used to achieve breakeven.

Chandan Basho: And then just on the the newer markets, can you maybe just speak to the operational playbook that you use to achieve breakeven, you know, in years one, two, and then beyond that, kind of what are the big factors that you need to work on to bring market to breakeven and move beyond that? Yeah, so the It takes time to improve care margin in a population. It takes time to grow a population from zero to. the scale that you need to support the infrastructure that you need to build to get into a new market. We typically think about getting to around $10,000 Medicare equivalent membership in a market.

Speaker Change: One two and then beyond that kind of what are the big factors that you need to work on bringing market to breakeven.

Speaker Change: And moving on that.

Speaker Change: Yes.

Brandon Sim: It takes time to improve care margin in a population. It takes time to grow a population from zero to the scale that you need to support the infrastructure that you need to build to get into a new market. We typically think about getting to around 10,000 Medicare equivalent membership in a market. You need some level of density that would approximately end up with the 10,000 comes from generating approximately $100 million of annualized premiums. You need to be able to operate at an OpEx level that could be supported by $100 million of premium revenue.

Speaker Change: Yeah. So.

It takes time to improve care margin in our population.

Speaker Change: It's time to grow a population from zero two.

Speaker Change: The scale that you need to support the infrastructure that you need to build to get into a new market.

Speaker Change: We typically think about getting to around 10000 Medicare equivalent membership.

Chandan Basho: So you need some level of density that would approximately, the $10,000 comes from generating approximately $100 million of annualized premiums. You need to be able to operate in an OPEX level that supports that could be supported by $100 million of premium review. So if you assume 10% of gross margin, for example, you need to be able to keep OPEX below 10 million, essentially, to break even in a new market. And so those are really the levers that we're using. We have to go into a market, build enough density to attract membership, provide a differentiated enough product with the provider network and the technology platform so that we can attract additional providers and therefore additional patients.

Speaker Change: Market. So you need some level of density.

Speaker Change: That would approximate 10000 comes from generating approximately $100 million of annualized premiums.

Speaker Change: You need to be able to operate in an opex level that supports our.

Speaker Change: <unk>.

Speaker Change: That could be supported by $100 million of premium revenue.

Brandon Sim: If you assume 10% of gross margin, for example, you need to be able to keep OpEx below $10 million essentially to break even in a new market. Those are really the levers that we're using. We have to go into a market, build enough density to attract membership, provide a differentiated enough product with the provider network and the technology platform, so that we can attract additional providers and therefore additional patients. We need to be able to then use that differentiated network and differentiated outcomes that we're driving to receive payer contracts. We need to be able to drive operating leverage in the technology platform, so that we can operate at that cost level.

Speaker Change: So have you seen them, 10% of gross margin for example, you need to be able to keep opex.

Speaker Change: Below 10 million essentially to break even in a new market and so those are really the levers that we're using we have to go into a market built enough density.

Speaker Change: To attract membership provided differentiate enough product with the provider network and the technology platform. So.

Speaker Change: So that we can attract additional providers and therefore additional patients we need to be able to then use that differentiate our network and differentiated outcomes that we're driving to.

Chandan Basho: We need to be able to then use that differentiated network and differentiated outcomes that we're driving to receive payer contracts. We need to be able to drive operating leverage in the technology platform so that we can operate at that cost level. Over time, as we increase scale and get to that number, and if our OPEX is low enough, then you get to break even. Over time is when the preventive care that you provide, such as, you know, in the story of Amy that I mentioned earlier in the prepared remarks section, start to shine, and you're starting to see decreases in MLR because of the longitudinal nature of the model and the length of time in which patients can be in the care model and be part of our risk-bearing ecosystem.

Speaker Change: To receive payer contracts, we need to be able to drive operating leverage in the technology platform. So that we can operate it at cost level.

Brandon Sim: Over time, as we increase scale and get to that number, and if our OpEx is low enough, then you get to break even. Over time is when the preventive care that you provide, such as, you know, the story of Amy that I mentioned earlier in the prepared remarks section, start to shine and you're starting to see decreases in MLR because of the longitudinal nature of the model and the length of time in which patients can be in the care model and be part of our risk-bearing ecosystem. Maybe succinctly, first two, 1.5 to 2 years, it's really about growth and being operationally very efficient. Years 2 through 5, you know, you're continuing to do that obviously, and you're also really bringing down medical costs as a percentage of revenue as well.

Speaker Change: And.

Speaker Change: Over time, as we increase scale and get to that number.

Speaker Change: And if our Opex is low enough then you get to breakeven.

Speaker Change: Overtime.

Speaker Change: As when the preventive care that you provide such as you know in the story of Amy that I mentioned earlier in the prepared remarks section start to shine and Youre starting to see decreases in MLR.

Speaker Change: Because of the longitudinal nature of the model and the length of time in which patients can be in the care model and be part of our risk bearing ecosystem. So.

Chandan Basho: So, Maybe succinctly, first two, one and a half to two years, it's really about growth and being operationally very efficient. Years two through five, you know, you're starting to do that. You're continuing to do that, obviously. And you're also really bringing down medical costs as a percentage of revenue as well.

Speaker Change: Maybe succinctly first to one and a half to two years, it's really about growth and being operationally very efficient.

Speaker Change: There is two to five you know youre starting to do that you are continuing to do that obviously and you're also really bringing down a medic.

Speaker Change: Medical costs as a percentage of revenue as well.

Chandan Basho: Great. Thank you. Thanks. Hey, gentlemen, great year, great quarter.

[Analyst] (KeyBanc Capital Markets): Great. Thank you.

Speaker Change: Great. Thank you.

Brandon Sim: Thanks.

Speaker Change: Thanks.

Operator 2: Thank you. Our last question comes from the line of Gene Mannheimer with Freedom Capital Markets. Please proceed.

Operator: Thank you. Our last question comes from the line of Gene Mannheimer with Freedom Capital Markets. Please proceed.

Speaker Change: Thank you.

Speaker Change: Our last question comes from the line of Deane Manheimer with Freedom capital markets. Please proceed.

Speaker 18: Thanks. Hey, gentlemen. Great year, great quarter. I appreciate the color around all the acquisitions. Did you or can you share the pro forma contribution to revenue from Prospect this year? Secondly, just based on your experience historically driving EBITDA synergies through your acquisitions, what might you expect for Prospect, say, after this year, given that it has such a similar profile and geography to your current business? Thanks.

Deane Manheimer: Thanks, Hey, gentlemen, great year, great quarter.

Gene: I appreciate the color around all the acquisitions and did you or can you share the pro forma contribution to revenue from prospect this year? And secondly, just based on your experience historically driving EBITDA synergies through your acquisitions, what might you expect for prospect, say, after this year, given that it is has such a similar profile and geography to your current business? Thanks. Hey Gene, great to hear from you. Prospect has not closed yet. I'm thinking you may be thinking about CHS. Well, I am asking about prospect, but understood that it isn't close. So maybe you're not, you know, comfortable talking about it from a synergy standpoint.

Speaker Change: I appreciate the color around all the acquisitions and did you or can you share the pro forma contribution to revenue from prospect this year.

Deane Manheimer: And secondly.

Deane Manheimer: Just based on your experience historically driving EBITDA synergies through your acquisitions, what might you expect for prospect say.

Deane Manheimer: After this year given that it is has such as similar profile and geography to your current business. Thanks.

Brandon Sim: Hey, Gene, great to hear from you. Prospect has not closed yet. I'm thinking you may be thinking about CHS.

Speaker Change: Hey, Jim Great to hear from you.

Deane Manheimer: Prospect has not closed yet.

Speaker Change: I'm thinking you may be thinking about CHS.

Speaker 18: Well, I am asking about Prospect, but I understand that it isn't closed, so maybe you're not, you know, comfortable talking about it from a synergy standpoint.

Gene Mannheimer: Well, I am asking about Prospect, but I understand that it isn't closed, so maybe you're not, you know, comfortable talking about it from a synergy standpoint.

Speaker Change: Well I am asking about prospect.

Speaker Change: Understood that.

Speaker Change: It isn't close so maybe you're not.

Speaker Change: Comfortable talking about it from.

Speaker Change: From a synergy standpoint.

Chandan Basho: Yeah, I think it's best to wait and see when close happens, because that's really going to affect it's run rate and in terms of revenue and I would assume what we've shared. revenue run rates about 1.2 billion and in terms of EBITDA it's that 81 that we have guided to. historically. Okay.

Brandon Sim: Yeah. I think it's best to wait and see when close happens because that's really gonna affect its run rate. In terms of revenue and EBITDA, I would assume what we've shared, the revenue run rate's about $1.2 billion, and in terms of EBITDA, it's that $81 that we have guided to

Speaker Change: Yeah, I think it's best to wait and see when.

Speaker Change: When close happens because that's really going to affect it.

Speaker Change: At its run rate in <unk> and in terms of revenue and.

Speaker Change: EBITDA.

Speaker Change: I would assume what we've shared.

Speaker Change: Revenue run rates about $1 2 billion.

Speaker Change: And.

Speaker Change: In terms of EBITDA.

Speaker Change: That 81.

Speaker Change: We have guided to.

David Larsen: Historically. Okay. Thank you. Thanks.

Gene Mannheimer: Historically. Okay. Thank you.

Speaker Change: Historically.

Speaker Change: Okay.

Operator: Thank you. Thanks. Thank you.

Speaker Change: Okay. Thank you.

Brandon Sim: Thanks.

Speaker Change: Thanks.

Operator: There are no questions. This concludes today's teleconference. You may disconnect your lines at this time. Thank you, everyone. Please see the complete disclaimer at https://sites.google.com or at https://sites.google.com

Operator 2: Thank you. There are no further questions at this time. That concludes today's teleconference. You may disconnect your lines at this time. Thank you everyone for your participation.

Operator: Thank you. There are no further questions at this time. That concludes today's teleconference. You may disconnect your lines at this time. Thank you everyone for your participation.

Speaker Change: Thank you there are no further questions at this time.

Speaker Change: That concludes today's teleconference. You may disconnect your lines at this time. Thank you everyone for your participation.

Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Hum.

Speaker Change: [music].

Q4 2024 Astrana Health Inc Earnings Call

Request a DemoDemo

ASTH

Astrana Health

Earnings