Q1 2026 P3 Health Partners Inc Earnings Call
Operator 2: Good morning, welcome to the P3 Health Partners First Quarter 2026 Earnings Conference Call. I would now like to turn the conference over to Gabriella Gabel. Thank you and over to you.
Operator: Good morning, welcome to the P3 Health Partners First Quarter 2026 Earnings Conference Call. I would now like to turn the conference over to Gabriella Gabel. Thank you and over to you.
Speaker #2: After today's presentation, there'll be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypad.
Speaker #2: To withdraw your question, you may press star and then two. Please note this event is being recorded. I would now like to turn the conference over to Gabby Gable.
Speaker #2: Thank you, and over to you. Thank you, operator, and thank you for joining us today. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under the U.S. federal securities laws, including statements regarding our financial outlook and long-term targets.
Gabriella Gabel: Thank you, operator, and thank you for joining us today. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under the US federal securities laws, including statements regarding our financial outlook and long-term target. These forward-looking statements are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from a historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC.
Gabriella Gabel: Thank you, operator, and thank you for joining us today. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under the US federal securities laws, including statements regarding our financial outlook and long-term target. These forward-looking statements are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from a historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC.
Speaker #2: These forward-looking statements are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations.
Speaker #2: These statements are subject to risks and uncertainties that could cause actual results to differ materially from a historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC.
Speaker #2: The forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise these forward-looking statements.
Gabriella Gabel: The forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise these forward-looking statements. We will refer to certain non-GAAP financial measures on this call, including adjusted operating expense, Adjusted EBITDA, adjusted EBITDA per member per month, normalized adjusted EBITDA, medical margin, medical margin per member per month, and cash flow. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, the measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures. For example, other companies may calculate similarly titled non-GAAP financial measures differently. Please refer to the appendix of our earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures.
Gabriella Gabel: The forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise these forward-looking statements. We will refer to certain non-GAAP financial measures on this call, including adjusted operating expense, Adjusted EBITDA, adjusted EBITDA per member per month, normalized adjusted EBITDA, medical margin, medical margin per member per month, and cash flow. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, the measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures. For example, other companies may calculate similarly titled non-GAAP financial measures differently. Please refer to the appendix of our earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures.
Speaker #2: We will refer to certain non-GAAP financial measures on this call, including adjusted operating expense, adjusted EBITDA, adjusted EBITDA per member per month, normalized adjusted EBITDA, medical margin, medical margin per member per month, and cash flow.
Speaker #2: These non-GAAP financial measures are in addition to, and not a substitute for or superior to, the measures of financial performance prepared in accordance with GAAP.
Speaker #2: There are a number of limitations related to the use of these non-GAAP financial measures. For example, other companies may calculate similarly titled non-GAAP financial measures differently.
Speaker #2: Please refer to the appendix of our earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. Information presented on this call is contained in the press release that we issued today, and our SEC filings, which may be accessed from the investor's page of the P3 Health Partners website.
Gabriella Gabel: Information presented on this call is contained in the press release that we issued today in our SEC filings, which may be accessed from the Investors page of the P3 Health Partners website. I will now turn the call over to Aric Coffman, CEO of P3 Health Partners.
Gabriella Gabel: Information presented on this call is contained in the press release that we issued today in our SEC filings, which may be accessed from the Investors page of the P3 Health Partners website. I will now turn the call over to Aric Coffman, CEO of P3 Health Partners.
Speaker #2: I will now turn the call over to Eric Kaufman, CEO of P3 Health Partners.
Speaker #3: Thanks, Abby. Good afternoon, and thank you for joining us today to discuss our first quarter results. Q1 represents an inflection point for the business and reflects the continued execution of the two-year framework we have discussed over the past several quarters.
Aric Coffman: Thanks, Abby. Good afternoon, and thank you for joining us today to discuss our Q1 results. Q1 represents an inflection point for the business and reflects the continued execution of the 2-year framework we have discussed over the past several quarters. The results of which delivered $26 million of Adjusted EBITDA in Q1, exceeding internal expectations. The strength of the Q1, combined with the momentum we are carrying into the rest of the year, provide us confidence to raise our full year 2026 outlook. It has been 24 months since I began leading P3, and we have fundamentally repositioned the organization through contract restructuring, market optimization, operational redesign, and tighter alignment between our clinical and financial infrastructure. The financial results this quarter demonstrate that these structural changes are now translating into measurable economic performance.
Aric Coffman: Thanks, Abby. Good afternoon, and thank you for joining us today to discuss our Q1 results. Q1 represents an inflection point for the business and reflects the continued execution of the 2-year framework we have discussed over the past several quarters. The results of which delivered $26 million of Adjusted EBITDA in Q1, exceeding internal expectations. The strength of the Q1, combined with the momentum we are carrying into the rest of the year, provide us confidence to raise our full year 2026 outlook. It has been 24 months since I began leading P3, and we have fundamentally repositioned the organization through contract restructuring, market optimization, operational redesign, and tighter alignment between our clinical and financial infrastructure. The financial results this quarter demonstrate that these structural changes are now translating into measurable economic performance.
Speaker #3: The results of which delivered 26 million dollars of adjusted EBITDA in Q1, exceeding internal expectations. The strength of the first quarter combined with the momentum we are carrying into the rest of the year provide us confidence to raise our full-year outlook.
Speaker #3: It has been 24 months since I began leading P3, and we have fundamentally repositioned the organization through contract restructuring, market optimization, operational redesign, and tighter alignment between our clinical and financial infrastructure.
Speaker #3: The financial results of this quarter demonstrate that these structural changes are now translating into measurable economic performance. Importantly, the improvements we are seeing here are not being driven by temporary factors.
Aric Coffman: Importantly, the improvements we are seeing here are not being driven by temporary factors. It is the result of deliberate operational and strategic actions that are now embedded within the business model. The underlying business generated significant positive earnings during the quarter, and our operating fundamentals continue to mature. I would like to acknowledge the hard work and dedication from our teams that made this happen day in and day out. They deepen the relationships with our clinical and payer partners to unlock the potential in the business, buttressed by the improvement in the macro environment. From here, our focus is straightforward. Continue expanding medical margin, continue improving contract economics, continuously improve operating execution, and scale the platform and markets and partnerships where our model performs best. Three primary drivers contributed to the improved underlying performance this quarter. First is the improvement in our payer contract structures.
Aric Coffman: Importantly, the improvements we are seeing here are not being driven by temporary factors. It is the result of deliberate operational and strategic actions that are now embedded within the business model. The underlying business generated significant positive earnings during the quarter, and our operating fundamentals continue to mature. I would like to acknowledge the hard work and dedication from our teams that made this happen day in and day out. They deepen the relationships with our clinical and payer partners to unlock the potential in the business, buttressed by the improvement in the macro environment. From here, our focus is straightforward. Continue expanding medical margin, continue improving contract economics, continuously improve operating execution, and scale the platform and markets and partnerships where our model performs best. Three primary drivers contributed to the improved underlying performance this quarter. First is the improvement in our payer contract structures.
Speaker #3: It is the result of deliberate operational and strategic actions that are now embedded within the business model. The underlying business generated significant positive earnings during the quarter and are operating fundamentals continue to mature.
Speaker #3: I would like to acknowledge the hard work and dedication from our teams that made this happen day in and day out. They deepen the relationships with our clinical and payer partners to unlock the potential in the business, buttressed by the improvement in the macro environment.
Speaker #3: From here, our focus is straightforward. Continue expanding medical margin, continue improving contract economics, continuously improve operating execution, and scale the platform and markets and partnerships where our model performs best.
Speaker #3: Three primary drivers contributed to the improved underlying performance this quarter. First is the improvement in our payer contract structures. Over the past 18 months, we have significantly redesigned how risk funding and cost accountability are structured across our payer and network relationships.
Aric Coffman: Over the past 18 months, we have significantly redesigned how risk, funding, and cost accountability are structured across our payer and network relationships. This includes improved alignment around medical cost accountability, enhanced funding mechanisms, revised risk-sharing structures, greater operational coordination with our payer partners, and a path to delegation in our go-forward contracts. These are not temporary tailwinds. They represent a structural repositioning of the economic framework of the business. We are increasingly seeing payers recognize the value our model creates when operational accountability and economic incentives are fully aligned. As a result, MA funding rates improved approximately 15% year over year. Delegated functions expanded across 63% of membership in 2026, and contract alignment improved meaningfully across several of our largest relationships. These changes position the business for more durable and sustainable profitability going forward. Second is operational execution.
Aric Coffman: Over the past 18 months, we have significantly redesigned how risk, funding, and cost accountability are structured across our payer and network relationships. This includes improved alignment around medical cost accountability, enhanced funding mechanisms, revised risk-sharing structures, greater operational coordination with our payer partners, and a path to delegation in our go-forward contracts. These are not temporary tailwinds. They represent a structural repositioning of the economic framework of the business. We are increasingly seeing payers recognize the value our model creates when operational accountability and economic incentives are fully aligned. As a result, MA funding rates improved approximately 15% year over year. Delegated functions expanded across 63% of membership in 2026, and contract alignment improved meaningfully across several of our largest relationships. These changes position the business for more durable and sustainable profitability going forward. Second is operational execution.
Speaker #3: This includes improved alignment around medical cost accountability, enhanced funding mechanisms, revised risk-sharing structures, greater operational coordination with our payer partners, and a path to delegation in our go-forward contracts.
Speaker #3: These are not temporary tailwinds. They represent a structural repositioning of the economic framework of the business. We are increasingly seeing payers recognize the value our model creates when operational accountability and economic incentives are fully aligned.
Speaker #3: As a result, MA funding rates improved approximately 15% year over year. Delegated functions expanded across 63% of membership in 2026, and contract alignment improved meaningfully across several of our largest relationships.
Speaker #3: These changes position the business for more durable and sustainable profitability going forward. Second is operational execution. Over the last two years, we have focused heavily on building a disciplined operating model centered around medical cost management, quality execution, provider engagement, and risk accuracy.
Aric Coffman: Over the last 2 years, we have focused heavily on building a disciplined operating model centered around medical cost management, quality execution, provider engagement, and risk accuracy. We are now seeing those efforts translate into improved financial performance. Across the organization, burden of illness capture and documentation accuracy continue to improve. Stars performance is tracking ahead of our internal glide path. Tier 1 provider concentration continues to increase. Care management engagement amongst our highest acuity populations continues to expand, and operational workflows across utilization management and payment integrity are increasingly effective across markets. Q1 MA medical expense trend was roughly flat compared to full year 2025 medical expense trend.
Aric Coffman: Over the last 2 years, we have focused heavily on building a disciplined operating model centered around medical cost management, quality execution, provider engagement, and risk accuracy. We are now seeing those efforts translate into improved financial performance. Across the organization, burden of illness capture and documentation accuracy continue to improve. Stars performance is tracking ahead of our internal glide path. Tier 1 provider concentration continues to increase. Care management engagement amongst our highest acuity populations continues to expand, and operational workflows across utilization management and payment integrity are increasingly effective across markets. Q1 MA medical expense trend was roughly flat compared to full year 2025 medical expense trend.
Speaker #3: We are now seeing those efforts translate into improved financial performance. Across the organization, burden of illness capture and documentation accuracy continue to improve. STARS performance is tracking ahead of our internal glide path, Tier 1 provider concentration continues to increase, care management engagement amongst our highest-acuity populations continues to expand, and operational workflows across utilization management and payment integrity are increasingly effective across markets.
Speaker #3: Q1 MA medical expense trend was roughly flat compared to full-year 2025 medical expense trend. At a time when payers and peer organizations have generally guided to a 7% trend or higher, our trend reflects the compounding impact of Tier 1 provider concentration, delegated utilization management, disciplined payment integrity, and we expect it to remain a durable point of differentiation.
Aric Coffman: At a time when payers and peer organizations have generally guided to a 7% trend or higher, our trend reflects the compounding impact of Tier 1 provider concentration, delegated utilization management, disciplined payment integrity, and we expect it to remain a durable point of differentiation. This isn't a one quarter result evidenced by our full year 2025 MedEx trend, which was under 2% across both Medicare Advantage and ACO populations. At the same time, our operating expense structure remains controlled. We continue to invest selectively in frontline clinical capabilities, provider engagement, and data infrastructure while maintaining focus on overall cost efficiency. The third item is the improving macro environment. The 2026 CMS benchmark update improved the underlying economics of the Medicare Advantage market and reinforced the sustainability of value-based care models that can effectively manage quality and medical cost performance.
Aric Coffman: At a time when payers and peer organizations have generally guided to a 7% trend or higher, our trend reflects the compounding impact of Tier 1 provider concentration, delegated utilization management, disciplined payment integrity, and we expect it to remain a durable point of differentiation. This isn't a one quarter result evidenced by our full year 2025 MedEx trend, which was under 2% across both Medicare Advantage and ACO populations. At the same time, our operating expense structure remains controlled. We continue to invest selectively in frontline clinical capabilities, provider engagement, and data infrastructure while maintaining focus on overall cost efficiency. The third item is the improving macro environment. The 2026 CMS benchmark update improved the underlying economics of the Medicare Advantage market and reinforced the sustainability of value-based care models that can effectively manage quality and medical cost performance.
Speaker #3: This isn't a one-quarter result evidenced by our full-year 2025 medex trend, which was under 2% across both Medicare Advantage and ACO populations. At the same time, our operating expense structure remains controlled.
Speaker #3: We continue to invest selectively in frontline clinical capabilities, provider engagement, and data infrastructure while maintaining focus on overall cost efficiency. The third item is the improving macro environment.
Speaker #3: The 2026 CMS benchmark update improved the underlying economics of the Medicare Advantage market and reinforced the sustainability of value-based care models that can effectively manage quality and medical cost performance.
Speaker #3: In addition, benefit design rationalization across the industry is creating more sustainable utilization dynamics across MA populations. We believe the current environment increasingly favors organizations that have the following.
Aric Coffman: In addition, benefit design rationalization across the industry is creating more sustainable utilization dynamics across MA populations. We believe the current environment increasingly favors organizations that have the following: strong provider alignment, local market operating capabilities, effective medical cost management, and a scalable clinical infrastructure. P3 is well-positioned within that group. Looking forward, we believe Medicare Advantage environment continues to move in a constructive direction. For organizations like P3 that effectively manage medical costs and execute on quality, this environment increasingly supports long-term margin expansion opportunities. The industry has moved into a period where operational execution and the ability to manage that cost of care effectively is what matters, not simply scale. As we look toward the rest of 2026 and 2027, the actions we have taken over the last two years position us to compete and win in that environment. Our payer relationships remain central to our success.
Aric Coffman: In addition, benefit design rationalization across the industry is creating more sustainable utilization dynamics across MA populations. We believe the current environment increasingly favors organizations that have the following: strong provider alignment, local market operating capabilities, effective medical cost management, and a scalable clinical infrastructure. P3 is well-positioned within that group. Looking forward, we believe Medicare Advantage environment continues to move in a constructive direction. For organizations like P3 that effectively manage medical costs and execute on quality, this environment increasingly supports long-term margin expansion opportunities. The industry has moved into a period where operational execution and the ability to manage that cost of care effectively is what matters, not simply scale. As we look toward the rest of 2026 and 2027, the actions we have taken over the last two years position us to compete and win in that environment. Our payer relationships remain central to our success.
Speaker #3: Strong provider alignment, local market operating capabilities effective medical cost management, and a scalable clinical infrastructure. P3 is well positioned within that group. Looking forward, we believe Medicare Advantage environment continues to move in a constructive direction.
Speaker #3: For organizations like P3 that effectively manage medical costs and execute on quality, this environment increasingly supports long-term margin expansion opportunities. The industry has moved into a period where operational execution and the ability to manage that cost of care effectively is what matters.
Speaker #3: Not simply scale. As we look toward the rest of '26 and 2027, the actions we have taken over the last two years position us to compete and win in that environment.
Speaker #3: Our payer relationships remain central to our success. One of the clearest lessons we have learned is that our model performs best when operational accountability and economic accountability are aligned through delegation.
Aric Coffman: One of the clearest lessons we have learned is that our model performs best when operational accountability and economic accountability are aligned through delegation. When we control key delegated functions, particularly claims payment, utilization management, and care management, we consistently produce stronger medical cost performance, better quality outcomes, improved member engagement, and more favorable economic outcomes for both P3 and our payer partners. As a result, we will prioritize markets and payer relationships with a clear pathway toward deeper delegation, stronger economic alignment, density, and long-term partnership stability. The depth of operational control this model affords us, particularly the integration of claims payment, utilization management, and care management within our platform, is a structural differentiator within the value-based care landscape and one that is difficult to replicate. This level of delegation simplifies our data sharing and meaningfully improves our cash flows to help us realize surplus more quickly.
Aric Coffman: One of the clearest lessons we have learned is that our model performs best when operational accountability and economic accountability are aligned through delegation. When we control key delegated functions, particularly claims payment, utilization management, and care management, we consistently produce stronger medical cost performance, better quality outcomes, improved member engagement, and more favorable economic outcomes for both P3 and our payer partners. As a result, we will prioritize markets and payer relationships with a clear pathway toward deeper delegation, stronger economic alignment, density, and long-term partnership stability. The depth of operational control this model affords us, particularly the integration of claims payment, utilization management, and care management within our platform, is a structural differentiator within the value-based care landscape and one that is difficult to replicate. This level of delegation simplifies our data sharing and meaningfully improves our cash flows to help us realize surplus more quickly.
Speaker #3: When we control key delegated functions—particularly claims payment, utilization management, and care management—we consistently produce stronger medical cost performance, better quality outcomes, improved member engagement, and more favorable economic outcomes for both P3 and our payer partners.
Speaker #3: As a result, we will prioritize markets and payer relationships with a clear pathway toward deeper delegation, stronger economic alignment, density, and long-term partnership stability.
Speaker #3: The depth of operational control this model affords us, particularly the integration of claims payment, utilization management, and care management within our platform, is a structural differentiator within the value-based care landscape and one that is difficult to replicate.
Speaker #3: This level of delegation simplifies our data sharing and meaningfully improves our cash flows to help us realize surplus more quickly. This disciplined approach materially improves long-term margin quality, predictability, and shareholder value creation.
Aric Coffman: This disciplined approach materially improves long-term margin quality, predictability, and shareholder value creation. Our Nebraska partnership, which added an additional 28,600 lives under management, reflects exactly this type of disciplined expansion strategy. The implementation remains on track, operational readiness milestones continue to progress as planned, and the partnership reinforces our ability to enter new geographies through structured, delegation-oriented growth pathways. Over time, partnerships structured in this manner will become meaningful contributors to long-term earnings growth and market expansion. These partnerships solve for one of the major issues around growth in value-based care, establishing cash flow to the business and contractual elements that are mutually beneficial for P3 and the payer partner. Overall, our Q1 was strong. We have 3 quarters ahead of us, and our focus remains on sustaining execution.
Aric Coffman: This disciplined approach materially improves long-term margin quality, predictability, and shareholder value creation. Our Nebraska partnership, which added an additional 28,600 lives under management, reflects exactly this type of disciplined expansion strategy. The implementation remains on track, operational readiness milestones continue to progress as planned, and the partnership reinforces our ability to enter new geographies through structured, delegation-oriented growth pathways. Over time, partnerships structured in this manner will become meaningful contributors to long-term earnings growth and market expansion. These partnerships solve for one of the major issues around growth in value-based care, establishing cash flow to the business and contractual elements that are mutually beneficial for P3 and the payer partner. Overall, our Q1 was strong. We have 3 quarters ahead of us, and our focus remains on sustaining execution.
Speaker #3: Our Nebraska partnership, which added an additional 28,600 lives under management, reflects exactly this type of disciplined expansion strategy. The implementation remains on track, operational readiness milestones continue to progress as planned, and the partnership reinforces our ability to enter new geographies through structured delegation-oriented growth pathways.
Speaker #3: Over time, partnerships structured in this manner will become meaningful contributors to long-term earnings growth and market expansion. These partnerships solve for one of the major issues around growth in value-based care.
Speaker #3: Establishing cash flow to the business and contractual elements that are mutually beneficial for P3 and the payer partner. Overall, our first quarter was strong.
Speaker #3: We have three quarters ahead of us, and our focus remains on sustaining execution. The results reinforce our confidence that the business has moved into a phase of improving operational consistency and earnings quality.
Aric Coffman: The results reinforce our confidence that the business has moved into a phase of improving operational consistency and earnings quality. The core economic levers that drive the business are increasingly within our control. While our work is never done, the economic framework for 2026 is solid within the business. We remain focused on executing with discipline against that opportunity. With that, I'll turn the call over to Amir to discuss our clinical performance.
Aric Coffman: The results reinforce our confidence that the business has moved into a phase of improving operational consistency and earnings quality. The core economic levers that drive the business are increasingly within our control. While our work is never done, the economic framework for 2026 is solid within the business. We remain focused on executing with discipline against that opportunity. With that, I'll turn the call over to Amir to discuss our clinical performance.
Speaker #3: The core economic levers that drive the business are increasingly within our control. And while our work is never done, the economic framework for 2026 is solid within the business.
Speaker #3: We remain focused on executing with discipline against that opportunity. With that, I'll turn the call over to Amir to discuss our clinical performance.
Speaker #4: Thank you, Eric. I want to spend a few minutes on the clinical work that is driving the financial performance Leif will discuss shortly. The nearly flat MA medical cost trend that we are seeing in the quarter is not accidental.
Amir: Thank you, Aric. I want to spend a few minutes on the clinical work that is driving the financial performance Leif will discuss shortly. The nearly flat MA medical cost trend that we are seeing in the quarter is not accidental. It is the result of deliberate clinical programs, improved utilization management workflows, and enhanced payment integrity capabilities. The clinical foundation driving our approach centers on our Tier 1 provider network. Execution across four areas is tracking ahead of plan. First, our Stars performance is tracking ahead of our internal glide path for gap closures across all markets, signaling that our quality trajectory is on track heading into H2 of the year and provides confidence in achieving our goals.
Amir Bacchus: Thank you, Aric. I want to spend a few minutes on the clinical work that is driving the financial performance Leif will discuss shortly. The nearly flat MA medical cost trend that we are seeing in the quarter is not accidental. It is the result of deliberate clinical programs, improved utilization management workflows, and enhanced payment integrity capabilities. The clinical foundation driving our approach centers on our Tier 1 provider network. Execution across four areas is tracking ahead of plan. First, our Stars performance is tracking ahead of our internal glide path for gap closures across all markets, signaling that our quality trajectory is on track heading into H2 of the year and provides confidence in achieving our goals.
Speaker #4: It is the result of deliberate clinical programs improved utilization management workflows and enhanced payment integrity capabilities. The clinical foundation driving our approach centers on our care enablement model embedded within our Tier 1 provider network.
Speaker #4: Execution across four areas is tracking ahead of plan. First, our star performance is tracking ahead of our internal glide path for gap closures across all markets.
Speaker #4: Signaling that our quality trajectory is on track headed into the second half of the year and provides confidence in achieving our goals. Second, total members seen across all markets through quarter one is ahead of plan by approximately 5%, which directly supports burden of illness documentation and our ability to manage care for the highest complexity members.
Amir: Second, total members seen across all markets through Q1 is ahead of plan by approximately 5%, which directly supports burden of illness documentation and our ability to manage care for the highest complexity members. Third, our Tier 1 provider concentration continues to deepen. The share of members attributed to Tier 1 providers has increased from 56% in Q1 2025 to 62% in 2026, reflecting continued progress in aligning our network around practices with the highest level of clinical integration and accountability. These providers consistently demonstrate more effective chronic disease management and better overall cost performance. Lastly, our high-risk program provides intensive support for our most complex members. A core feature of the program is a dedicated 24/7 clinical call center, giving members and their caregivers direct access to clinical guidance before seeking higher cost care.
Amir Bacchus: Second, total members seen across all markets through Q1 is ahead of plan by approximately 5%, which directly supports burden of illness documentation and our ability to manage care for the highest complexity members. Third, our Tier 1 provider concentration continues to deepen. The share of members attributed to Tier 1 providers has increased from 56% in Q1 2025 to 62% in 2026, reflecting continued progress in aligning our network around practices with the highest level of clinical integration and accountability. These providers consistently demonstrate more effective chronic disease management and better overall cost performance. Lastly, our high-risk program provides intensive support for our most complex members. A core feature of the program is a dedicated 24/7 clinical call center, giving members and their caregivers direct access to clinical guidance before seeking higher cost care.
Speaker #4: Third, our Tier 1 provider concentration continues to deepen. The share of members attributed to Tier 1 providers has increased from 56% in Q1, '25 to 62% in '26.
Speaker #4: Reflecting continued progress in aligning our network around practices with the highest level of clinical integration and accountability. These providers consistently demonstrate more effective chronic disease management and better overall cost performance.
Speaker #4: And lastly, our high-risk program provides intensive support for our most complex members. A core feature of the program is a dedicated 24/7 clinical call center giving members and their caregivers direct access to clinical guidance before seeking higher-cost care.
Speaker #4: This capability is designed to reduce avoidable ED visits and inpatient admissions by ensuring members have a supported, lower-acuity pathway when issues arise. This program was introduced in late 2025 and continues to ramp in the early part of 2026.
Amir: This capability is designed to reduce avoidable ED visits and inpatient admissions by ensuring members have a supported lower acuity pathway when issues arise. This program was introduced in late 2025 and continues to ramp in the early part of 2026. In addition to our clinical foundation, we have strengthened our utilization management infrastructure across the network with a focus on high cost settings, including inpatient, post-acute care, and readmissions. The result is a more consistent cost-effective care experience across our markets. We've also made meaningful progress on payment integrity, implementing process improvements that ensure we are paying accurately for the services our members receive. This is an area where operational discipline translates directly to medical margin, and the work we have done over the past several quarters is now showing up in our results.
Amir Bacchus: This capability is designed to reduce avoidable ED visits and inpatient admissions by ensuring members have a supported lower acuity pathway when issues arise. This program was introduced in late 2025 and continues to ramp in the early part of 2026. In addition to our clinical foundation, we have strengthened our utilization management infrastructure across the network with a focus on high cost settings, including inpatient, post-acute care, and readmissions. The result is a more consistent cost-effective care experience across our markets. We've also made meaningful progress on payment integrity, implementing process improvements that ensure we are paying accurately for the services our members receive. This is an area where operational discipline translates directly to medical margin, and the work we have done over the past several quarters is now showing up in our results.
Speaker #4: In addition to our clinical foundation, we have strengthened our utilization management infrastructure across the network with a focus on high-cost settings, including inpatient, post-acute care, and readmissions.
Speaker #4: The result is a more consistent, cost-effective care experience across our markets. We've also made meaningful progress on payment integrity, implementing process improvements that ensure we are paying accurately for the services our members receive.
Speaker #4: This is an area where operational discipline translates directly to medical margin, and the work we have done over the past several quarters is now showing up in our results.
Speaker #4: Lastly, our P3 restore program, where we provide a three-month individualized coaching engagement to provider partners, has reached across all of our markets. With lasting impact on provider engagement and practice sustainability.
Amir: Lastly, our P3 Restore program, where we provide a 3-month individualized coaching engagement to provider partners, has reached across all of our markets, with lasting impact on provider engagement and practice sustainability. With that, I'll turn the call over to Leif to walk you through our financials.
Amir Bacchus: Lastly, our P3 Restore program, where we provide a 3-month individualized coaching engagement to provider partners, has reached across all of our markets, with lasting impact on provider engagement and practice sustainability. With that, I'll turn the call over to Leif to walk you through our financials.
Speaker #4: With that, I'll turn the call over to Leif to walk you through our financials. Thank you, Amir, and good afternoon. Q1 was a strong start to the year.
Leif: Thank you, Amir, and good afternoon. Q1 was a strong start to the year. We delivered $26 million of Adjusted EBITDA, exceeding internal expectations for the quarter. The results reflect the cumulative impact of the work Aric described, including improved payer economics, disciplined clinical execution, and strategic portfolio decisions such as smart, deliberate market growth. This afternoon, I will cover three areas. First, our financial performance for the quarter, including an update on our medical cost trends. Second, our capital position and liquidity. Third, our revised outlook for the remainder of 2026. Starting with membership, total at-risk membership at the end of Q1 was approximately 106,000, compared to 118,000 in Q1 2025. The year-over-year decline reflects the deliberate portfolio actions that we took throughout 2025, including the exit of arrangements that did not meet our economic thresholds.
Leif Pedersen: Thank you, Amir, and good afternoon. Q1 was a strong start to the year. We delivered $26 million of Adjusted EBITDA, exceeding internal expectations for the quarter. The results reflect the cumulative impact of the work Aric described, including improved payer economics, disciplined clinical execution, and strategic portfolio decisions such as smart, deliberate market growth. This afternoon, I will cover three areas. First, our financial performance for the quarter, including an update on our medical cost trends. Second, our capital position and liquidity. Third, our revised outlook for the remainder of 2026. Starting with membership, total at-risk membership at the end of Q1 was approximately 106,000, compared to 118,000 in Q1 2025. The year-over-year decline reflects the deliberate portfolio actions that we took throughout 2025, including the exit of arrangements that did not meet our economic thresholds.
Speaker #4: We delivered $26 million of adjusted EBITDA, exceeding internal expectations for the quarter. The results reflect the cumulative impact of the work Eric described, including improved payer economics, disciplined clinical execution, and strategic portfolio decisions such as smart, deliberate market growth.
Speaker #4: This afternoon, I will cover three areas. First, our financial performance for the quarter, including an update on our medical cost trends. Second, our capital position and liquidity.
Speaker #4: And third, our revised outlook for the remainder of 2026. Starting with membership, total at-risk membership at the end of Q1 was approximately 106,000 compared to 118,000 in Q1, 2025.
Speaker #4: The year-over-year decline reflects the deliberate portfolio actions that we took throughout 2025, including the exit of arrangements that did not meet our economic thresholds.
Speaker #4: The membership base we are operating from today is more concentrated in relationships where our model performs best. In addition to our at-risk membership, we currently manage approximately 29,000 lives under management service arrangements, bringing the total lives under management to approximately 135,000.
Leif: The membership base we are operating from today is more concentrated in relationships where our model performs best. In addition to our at-risk membership, we currently manage approximately 29,000 lives under management service arrangements, bringing the total lives under management to approximately 135,000. Going forward, we intend to provide total managed lives as an additional operating metric to better reflect the broader scale of our platform and the expanding scope of services we provide across our payer and provider relationships. Moving to revenue, Q1 revenue was $386 million, compared to $373 million in the same period of 2025. Despite a lower membership base, per-member funding for our Medicare Advantage population improved approximately 15% year over year, reflecting rate progression, contractual restructuring, and continued maturation of our burden of illness documentation across our networks.
Leif Pedersen: The membership base we are operating from today is more concentrated in relationships where our model performs best. In addition to our at-risk membership, we currently manage approximately 29,000 lives under management service arrangements, bringing the total lives under management to approximately 135,000. Going forward, we intend to provide total managed lives as an additional operating metric to better reflect the broader scale of our platform and the expanding scope of services we provide across our payer and provider relationships. Moving to revenue, Q1 revenue was $386 million, compared to $373 million in the same period of 2025. Despite a lower membership base, per-member funding for our Medicare Advantage population improved approximately 15% year over year, reflecting rate progression, contractual restructuring, and continued maturation of our burden of illness documentation across our networks.
Speaker #4: Going forward, we intend to provide total managed lives as an additional operating metric to better reflect the broader scale of our platform and the expanding scope of services we provide across our payer and provider relationships.
Speaker #4: Moving to revenue, Q1 revenue was $386 million, compared to $373 million in the same period of 2025. Despite a lower membership base, per-member funding for our Medicare Advantage population improved approximately 15% year over year.
Speaker #4: Reflecting rate progression, contractual restructuring, and continued maturation of our burden of illness documentation across our networks. Medical claims expense for the quarter was $306 million.
Leif: Medical claims expense for the quarter was $306 million. The results include approximately $17 million of favorable prior year development and payer settlements. Q1 2026 MA medical cost trend is approximately flat to the full year 2025 baseline when adjusted for the prior year items. Medical margin for the quarter was $74 million. Medical Loss Ratio for the quarter was 85.2% when adjusted for the favorable prior year development and payer settlement noted above. These results reflect the structural contract improvements, clinical execution, and enhanced payment integrity workflows, along with utilization management progression previously described. Adjusted operating expense for the quarter was $25 million, consistent with the cost structure we have established over the prior 18 months. We continue to direct investments towards frontline capabilities that drive medical costs and quality performance.
Leif Pedersen: Medical claims expense for the quarter was $306 million. The results include approximately $17 million of favorable prior year development and payer settlements. Q1 2026 MA medical cost trend is approximately flat to the full year 2025 baseline when adjusted for the prior year items. Medical margin for the quarter was $74 million. Medical Loss Ratio for the quarter was 85.2% when adjusted for the favorable prior year development and payer settlement noted above. These results reflect the structural contract improvements, clinical execution, and enhanced payment integrity workflows, along with utilization management progression previously described. Adjusted operating expense for the quarter was $25 million, consistent with the cost structure we have established over the prior 18 months. We continue to direct investments towards frontline capabilities that drive medical costs and quality performance.
Speaker #4: The results include approximately $17 million of favorable prior-year development and payer settlements. Q1 2026 MA medical cost trend is approximately flat to the full-year 2025 baseline when adjusted for the prior-year items.
Speaker #4: Medical margin for the quarter was $74 million. Medical loss ratio for the quarter was 85.2% when adjusted for the favorable prior-year development and payer settlement noted above.
Speaker #4: These results reflect the structural contract improvements clinical execution and enhanced payment integrity workflows, along with utilization management progression previously described. Adjusted operating expense for the quarter was $25 million, consistent with the cost structure we have established over the prior 18 months.
Speaker #4: We continue to direct investments towards frontline capabilities that drive medical costs and quality performance. Adjusted EBITDA for Q1 was $26 million, compared to a loss of $22 million in the same period of 2025.
Leif: Adjusted EBITDA for Q1 was $26 million, compared to a loss of $22 million in the same period of 2025. Excluding the prior year items, underlying Q1 adjusted EBITDA was $8 million, reflecting the core operating performance of the business. On the balance sheet, we ended the quarter with $25 million in cash and equivalents. Consistent with the liquidity framework we have communicated, we continue to manage capital with discipline while maintaining focus on operational execution and financial stability. Of additional note, we recently completed a series of strategic capital structure transactions designed to improve financial flexibility and address the Nasdaq minimum stockholders' equity requirement. On 28 April, approximately $250 million of debt was converted to preferred equity. While not reflected on the 31 March 2026 balance sheet, it materially improved stockholders' equity.
Leif Pedersen: Adjusted EBITDA for Q1 was $26 million, compared to a loss of $22 million in the same period of 2025. Excluding the prior year items, underlying Q1 adjusted EBITDA was $8 million, reflecting the core operating performance of the business. On the balance sheet, we ended the quarter with $25 million in cash and equivalents. Consistent with the liquidity framework we have communicated, we continue to manage capital with discipline while maintaining focus on operational execution and financial stability. Of additional note, we recently completed a series of strategic capital structure transactions designed to improve financial flexibility and address the Nasdaq minimum stockholders' equity requirement. On 28 April, approximately $250 million of debt was converted to preferred equity. While not reflected on the 31 March 2026 balance sheet, it materially improved stockholders' equity.
Speaker #4: Excluding the prior-year items, underlying Q1 adjusted EBITDA was $8 million, reflecting the core operating performance of the business. On the balance sheet, we ended the quarter with $25 million in cash and equivalents.
Speaker #4: Consistent with the liquidity framework we have communicated, we continue to manage capital with discipline, while maintaining focus on operational execution and financial stability. Of additional note, we recently completed a series of strategic capital structure transactions designed to improve financial flexibility and address the NASDAQ minimum stockholders' equity requirement.
Speaker #4: On April 28th, approximately $250 million of debt was converted to preferred equity. While not reflected on the 3/31/2026 balance sheet, it materially improves stockholders' equity.
Speaker #4: Separately, we have an agreement to issue up to $70 million in additional preferred equity, $30 million of which has been issued to date. Collectively, we believe these actions bring stockholders' equity above the NASDAQ minimum compliance threshold, materially strengthening the company's financial position and enhanced the long-term balance sheet flexibility.
Leif: Separately, we have an agreement to issue up to $70 million in additional preferred equity, $30 million of which has been issued to date. Collectively, we believe these actions bring stockholders' equity above the Nasdaq minimum compliance threshold, materially strengthening the company's financial position and enhance the long-term balance sheet flexibility. Now, moving to our updated 2026 outlook. We are revising our full year 2026 Adjusted EBITDA outlook to a range of $20 million to 60 million, with a midpoint of $40 million. The revision reflects both the favorable prior year development and payer settlements recognized in Q1 and our confidence in the underlying operating trajectory of the business through the remainder of the year.
Leif Pedersen: Separately, we have an agreement to issue up to $70 million in additional preferred equity, $30 million of which has been issued to date. Collectively, we believe these actions bring stockholders' equity above the Nasdaq minimum compliance threshold, materially strengthening the company's financial position and enhance the long-term balance sheet flexibility. Now, moving to our updated 2026 outlook. We are revising our full year 2026 Adjusted EBITDA outlook to a range of $20 million to 60 million, with a midpoint of $40 million. The revision reflects both the favorable prior year development and payer settlements recognized in Q1 and our confidence in the underlying operating trajectory of the business through the remainder of the year.
Speaker #4: Now, moving to our updated 2026 outlook. We are revising our full-year 2026 adjusted EBITDA outlook to a range of $20 million to $60 million with a midpoint of $40 million.
Speaker #4: The revision reflects both the favorable prior-year development and payer settlements recognized in Q1, and our confidence in the underlying operating trajectory of the business through the remainder of the year.
Speaker #4: Our confidence in the full year is rooted in the same pillars we outlined at the start of 2026. The structural contract improvements now flowing through our economics continue clinical execution across cost management, quality, and STARS performance, and the operating discipline we have established across the business.
Leif: Our confidence in the full year is rooted in the same pillars we outlined at the start of 2026. The structural contract improvements now flowing through our economics, continued clinical execution across cost management, quality, and Stars performance, and the operating discipline we have established across the business. The width of the range reflects the normal variability in claims development and full year cost expectations. Results within the range are contingent on cost trend development throughout the year and execution against medical cost initiatives. With that, I'll turn it back to Aric for closing comments.
Leif Pedersen: Our confidence in the full year is rooted in the same pillars we outlined at the start of 2026. The structural contract improvements now flowing through our economics, continued clinical execution across cost management, quality, and Stars performance, and the operating discipline we have established across the business. The width of the range reflects the normal variability in claims development and full year cost expectations. Results within the range are contingent on cost trend development throughout the year and execution against medical cost initiatives. With that, I'll turn it back to Aric for closing comments.
Speaker #4: The width of the range reflects the normal variability in claims development and full-year cost expectations. Results within the range are contingent on cost trend development throughout the year and execution against medical cost initiatives.
Speaker #4: With that, I'll turn it back to Eric for closing comments.
Speaker #5: Thank you, Leif. Before we open the line for questions, I want to leave you with three takeaways from this quarter. First, the structural work is producing results.
Aric Coffman: Thank you, Leif. Before we open the line for questions, I want to leave you with three takeaways from this quarter. First, the structural work is producing results. The contract restructuring, network concentration, and operational redesign we have executed over the past two years are showing up in our economics. Additional structural work remains a priority in 2026. We are executing against it. Second, our clinical model, utilization management, and payment integrity processes are differentiators. At a time when the industry is broadly guiding to 7% or higher medical cost trend, P3 delivered flat trend in the quarter following a sub 2% trend in 2025. That outcome is driven by the clinical and operational infrastructure Amir described. We expect it to remain a point of differentiation as we move forward. Third, the setup for the remainder of 2026 is strong.
Aric Coffman: Thank you, Leif. Before we open the line for questions, I want to leave you with three takeaways from this quarter. First, the structural work is producing results. The contract restructuring, network concentration, and operational redesign we have executed over the past two years are showing up in our economics. Additional structural work remains a priority in 2026. We are executing against it. Second, our clinical model, utilization management, and payment integrity processes are differentiators. At a time when the industry is broadly guiding to 7% or higher medical cost trend, P3 delivered flat trend in the quarter following a sub 2% trend in 2025. That outcome is driven by the clinical and operational infrastructure Amir described. We expect it to remain a point of differentiation as we move forward. Third, the setup for the remainder of 2026 is strong.
Speaker #5: The contract restructuring network concentration and operational redesign we have executed over the past two years are showing up in our economics. Additional structural work remains a priority in 2026, and we are executing against it.
Speaker #5: Second, our clinical model utilization management and payment integrity processes are differentiators. At a time when the industry is broadly guiding to 7% or higher medical cost trend, P3 delivered flat trend in the quarter following a sub-2% trend in 2025.
Speaker #5: That outcome is driven by the clinical and operational infrastructure Amir described. We expect it to remain a point of differentiation as we move forward.
Speaker #5: Third, the setup for the remainder of 2026 is strong. We are raising our full-year outlook, our operating fundamentals continue to mature, and the predictability of our performance has improved.
Aric Coffman: We are raising our full year outlook, our operating fundamentals continue to mature, and the predictability of our performance has improved. We have plenty of work ahead, but we are executing with confidence. With that, operator, please open the line for questions.
Aric Coffman: We are raising our full year outlook, our operating fundamentals continue to mature, and the predictability of our performance has improved. We have plenty of work ahead, but we are executing with confidence. With that, operator, please open the line for questions.
Speaker #5: We have plenty of work ahead, but we are executing with confidence. With that, operator, please open the line for questions.
Speaker #1: Thank you. We will now begin the question answer session. To ask a question, we press star and then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys.
Operator 2: Thank you. We will now begin the question and answer session. We have our first question from the line of Ryan Halsted from TD Cowen. Please go ahead.
Operator: Thank you. We will now begin the question and answer session. We have our first question from the line of Ryan Halsted from TD Cowen. Please go ahead.
Speaker #1: If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. At this time, you will pause momentarily to assemble our roster.
Speaker #1: We have a first question from the line of Ryan Langston from TD Govind. Please go ahead.
Speaker #6: Hey, thanks. On the utilization point, can you maybe just talk about what you saw in the first quarter in terms of A and B versus part D?
Ryan Halsted: Hey, thanks. On the utilization point, can you maybe just talk about what you saw in Q1 in terms of A and B versus Part D? I guess, is it still logical to expect that Part D MLRs are gonna trend higher as we move through the year, just as members hit their out-of-pocket maximums?
Ryan Langston: Hey, thanks. On the utilization point, can you maybe just talk about what you saw in Q1 in terms of A and B versus Part D? I guess, is it still logical to expect that Part D MLRs are gonna trend higher as we move through the year, just as members hit their out-of-pocket maximums?
Speaker #6: And then I guess is it still logical to expect that part D MLRs are going to trend higher as we move through the year just as members hit their out-of-pocket maximums?
Speaker #7: Hey, Ryan. Thanks for the question. This is Eric. I'll have Leif give a little more detail. One thing I want to remind on that Part D part is we've significantly reduced our Part D exposure and are continuing to reduce our Part D exposure in all of our contracts.
Aric Coffman: Hey, Ryan. Thanks for the question. This is Aric. I'll have Leif give a little more detail. One thing I wanna remind on that Part D part is we've significantly reduced our Part D exposure and are continuing to reduce our Part D exposure in all of our contracts beyond 2026. We'll still I think Leif is looking for an answer here for you.
Aric Coffman: Hey, Ryan. Thanks for the question. This is Aric. I'll have Leif give a little more detail. One thing I wanna remind on that Part D part is we've significantly reduced our Part D exposure and are continuing to reduce our Part D exposure in all of our contracts beyond 2026. We'll still I think Leif is looking for an answer here for you.
Speaker #7: Beyond 2026. But we'll still, I think, Leif is looking for an answer here for you.
Speaker #6: Okay.
Ryan Halsted: Okay. Oh, hey, Leif.
Ryan Langston: Okay. Oh, hey, Leif.
Speaker #8: Thank you, Ryan.
Speaker #6: And oh, hey, Leif.
Speaker #8: Hey, how's it going? Thanks for the question. Appreciate it. On kind of the MedEx trend side of things, we actually saw a bigger reduction across part B in our book of business collectively when we look at in-year 2025 versus in-year 2026.
Leif: Hey, how's it going? Thanks, thanks for the question. Appreciate it. On kind of the MedEx trend side of things, we actually saw a bigger reduction across Part B in our book of business collectively when we look at in-year 2025 versus in-year 2026. It was where Part A was predominantly flat.
Leif Pedersen: Hey, how's it going? Thanks, thanks for the question. Appreciate it. On kind of the MedEx trend side of things, we actually saw a bigger reduction across Part B in our book of business collectively when we look at in-year 2025 versus in-year 2026. It was where Part A was predominantly flat.
Speaker #8: It was where part A was predominantly flat.
Speaker #6: Okay. And then can you break out—I think it was around $18 million of positive PYD and payer settlement. Are you able to tell us what each of those were? And in terms of the positive PYD, good to see—was anything reestablished back in reserves above and beyond what the amount was that was included in the results for Q1?
Ryan Halsted: Okay. Can you break out, I think it was around $18 million of +PYD and payer settlement. Are you able to tell us what each of those were? In terms of the +PYD, good to see, was anything reestablished back in reserves above and beyond what the amount was that was included in the results for Q1? Thanks.
Ryan Langston: Okay. Can you break out, I think it was around $18 million of +PYD and payer settlement. Are you able to tell us what each of those were? In terms of the +PYD, good to see, was anything reestablished back in reserves above and beyond what the amount was that was included in the results for Q1? Thanks.
Speaker #6: Thanks.
Leif: Hey, Ryan. I didn't catch the last half of that, but let me answer the first half of the question. The first half of the question is that split between those two items is about 65/35, meaning 65% of that $17 million is related to favorable prior year development of our reserves, and 35% relates to some payer development.
Leif Pedersen: Hey, Ryan. I didn't catch the last half of that, but let me answer the first half of the question. The first half of the question is that split between those two items is about 65/35, meaning 65% of that $17 million is related to favorable prior year development of our reserves, and 35% relates to some payer development.
Speaker #8: Hey, Ryan. I didn't catch the last half of that, but let me answer the first half of the question. The first half of the question is that split between those two items.
Speaker #8: It's about 65/35, meaning 65% of that 17 million dollars is related to change related to prior-year favorable prior-year development of our reserves. And about 35% relates to some payer settlements.
Speaker #6: Okay. Okay. The second part was just did you reestablish any positive PYD back into reserves or did that all flow through into the results for the first quarter?
Ryan Halsted: Okay. The second part was just, did you reestablish any positive PYD back into reserves, or did that all flow through into the results for Q1?
Ryan Langston: Okay. The second part was just, did you reestablish any positive PYD back into reserves, or did that all flow through into the results for Q1?
Leif: Those What we disclosed is what flowed through the period in the quarter, and we stayed consistent with our reserve methodology. We did not reduce any of our pads or our estimates from an IBNR process perspective.
Leif Pedersen: Those What we disclosed is what flowed through the period in the quarter, and we stayed consistent with our reserve methodology. We did not reduce any of our pads or our estimates from an IBNR process perspective.
Speaker #8: What we disclosed is what flowed through the period in the quarter. And we stayed consistent with our reserve methodology. We did not reduce any of our PADs or our estimates from an IBNR process perspective.
Speaker #6: Okay. Got it. Thank you very much.
Ryan Halsted: Okay. Got it. Thank you very much.
Ryan Langston: Okay. Got it. Thank you very much.
Speaker #1: Thank you. We have a next question on the line of Benjamin Haener from Lake Street Capital. Please go ahead.
Operator 2: Thank you. We have our next question on the line of Benjamin Haynor from Lake Street Capital. Please go ahead.
Operator: Thank you. We have our next question on the line of Benjamin Haynor from Lake Street Capital. Please go ahead.
Benjamin Haynor: Good afternoon, gentlemen. Thanks for taking the questions, and congrats on the quarter. First off for me, just thinking about potential payer partners, expansion with existing ones, to what extent do you think that they take notice of, you know, kind of the results for the quarter just reported, the conversion to preferred stock and kind of see, you know, a much more financially sound partner? Does that benefit you guys? To what degree might that benefit you guys?
Speaker #9: Good afternoon, gentlemen. Thanks for taking the questions, and congrats on the quarter. First off, for me, just thinking about potential payer partner expansion with the existing ones—do you think, or to what extent do you think, that they take notice of the results for the quarter just reported, the conversion to preferred stock, and kind of see a much more financially sound partner? And does that benefit—or to what degree might that benefit—you guys?
Benjamin Haynor: Good afternoon, gentlemen. Thanks for taking the questions, and congrats on the quarter. First off for me, just thinking about potential payer partners, expansion with existing ones, to what extent do you think that they take notice of, you know, kind of the results for the quarter just reported, the conversion to preferred stock and kind of see, you know, a much more financially sound partner? Does that benefit you guys? To what degree might that benefit you guys?
Speaker #10: Hey, Ben. Thanks for being on. Appreciate the question. Yeah. I think our ability to demonstrate positive momentum and an improved balance sheet does help prospects, as you think about growth, to have a healthy balance sheet.
Aric Coffman: Hey, Ben. Thanks for being on. Appreciate the question. Yeah, I think, you know, our ability to demonstrate positive momentum and an improved balance sheet, it does help, you know, prospects as you think about growth, to have a healthy balance sheet. It also supports part of our strategy as we move forward in expanding delegation. You know, that one is so important, not just for the data side of it, but for claims delegation, it also speeds up the timing that you have to get the dollars that you've impacted in the business as well as improves cash flow in the business obviously as well.
Aric Coffman: Hey, Ben. Thanks for being on. Appreciate the question. Yeah, I think, you know, our ability to demonstrate positive momentum and an improved balance sheet, it does help, you know, prospects as you think about growth, to have a healthy balance sheet. It also supports part of our strategy as we move forward in expanding delegation. You know, that one is so important, not just for the data side of it, but for claims delegation, it also speeds up the timing that you have to get the dollars that you've impacted in the business as well as improves cash flow in the business obviously as well.
Speaker #10: It also supports part of our strategy as we move forward in expanding delegation. And that one is so important not just for the data side of it, but for claims delegation.
Speaker #10: It also speeds up the timing that you have to get the dollars that you've impacted in the business, as well as improves cash flow in the business, obviously, as well.
Speaker #9: Makes sense. And then just you mentioned the delegation. I guess what's kind of the pathway? I know you have the set pathway and the newer managed services contract, but otherwise, what's kind of the pathway to get that beyond 63%?
Benjamin Haynor: Makes sense. You know, just you mentioned the delegation. I guess what's kind of the pathway? I know you have the set pathway and the newer managed services contract. Otherwise, what's kind of the pathway to get that beyond 63%?
Benjamin Haynor: Makes sense. You know, just you mentioned the delegation. I guess what's kind of the pathway? I know you have the set pathway and the newer managed services contract. Otherwise, what's kind of the pathway to get that beyond 63%?
Speaker #10: Yeah, Ben, good question. And so the standout market—we have one particular geography in which our current delegation is very, very limited. And so we've approached that contractually with those payers.
Aric Coffman: Yeah, Ben. Good, good question. The standout market, we have one particular geography in which our current delegation is very, very limited. We've approached that contractually with those payers, and we have a glide path to get to delegation with each one of those payers based on the internal timetables that they have. That's not something that we'll just flip on. Each one of these needs things like a pre-delegation audit, and then there's, you know, testing that has to happen, and then you move into a full delegation. I expect that to be stairstepped over the next, you know, probably 2 years, to be honest.
Aric Coffman: Yeah, Ben. Good, good question. The standout market, we have one particular geography in which our current delegation is very, very limited. We've approached that contractually with those payers, and we have a glide path to get to delegation with each one of those payers based on the internal timetables that they have. That's not something that we'll just flip on. Each one of these needs things like a pre-delegation audit, and then there's, you know, testing that has to happen, and then you move into a full delegation. I expect that to be stairstepped over the next, you know, probably 2 years, to be honest.
Speaker #10: And we have a glide path to get to delegation with each one of those payers based on the internal timetables that they have. So that's not something that will just flip on.
Speaker #10: Each one of these needs things like a pre-delegation audit, and then there’s testing that has to happen, and then you move into a full delegation.
Speaker #10: So I expect that to be stair-stepped over the next, probably, two years, to be honest.
Speaker #9: Okay. That's helpful. That's all I had, gentlemen. Congrats again on the quarter. That was very nice.
Benjamin Haynor: Okay. That's helpful. That's all I had, gentlemen. Congrats again on the quarter. That was very nice.
Benjamin Haynor: Okay. That's helpful. That's all I had, gentlemen. Congrats again on the quarter. That was very nice.
Speaker #10: Thanks so much, Ben. Appreciate it. Thank you.
Aric Coffman: Thanks so much, Ben. Appreciate it. Thank you.
Aric Coffman: Thanks so much, Ben. Appreciate it. Thank you.
Speaker #1: Thank you. This concludes question and answer session. I would like to turn the conference back over to Eric Kaufman for any closing remarks.
Operator 2: Thank you. This concludes our question answer session. I would like to turn the conference back over to Aric Coffman for any closing remarks.
Operator: Thank you. This concludes our question answer session. I would like to turn the conference back over to Aric Coffman for any closing remarks.
Speaker #10: Thank you so much. Appreciate everyone joining. And thanks for listening to our first quarter results.
Aric Coffman: Thank you so much. Appreciate everyone joining, and thanks for listening to our Q1 results.
Aric Coffman: Thank you so much. Appreciate everyone joining, and thanks for listening to our Q1 results.
Operator 2: Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
