Core Viewpoint - Astrana Health Inc. experienced a significant stock decline of approximately 22% following the Centers for Medicare & Medicaid Services' proposed updates for Medicare Advantage, indicating modest payment growth in 2027 [1] Group 1: Financial Impact - The proposed changes could lead to a net average year-over-year payment increase of only 0.09%, equating to over $700 million in additional payments to Medicare Advantage plans [2] - Medicare accounts for about 61% of Astrana Health's revenue, yet the stock's decline was more pronounced compared to peers like Agilon Health Inc. and Alignment Healthcare Inc., which saw declines of about 10% and 12% respectively [4] Group 2: Company Operations - Astrana Health operates as a Management Services Organization (MSO) that provides administrative support and services to Independent Physicians Associations (IPAs) and Medical Groups [3] - The company's risk adjustment practices differ from larger payers, focusing on direct, encounter-based patient care rather than audio-only visits or standalone chart reviews, resulting in minimal exposure to the CMS's proposed risk score impacts [5] Group 3: Future Outlook - The proposed changes may enhance Astrana Health's long-term value by encouraging payers to seek fully delegated care delivery partners for better patient management and clinical documentation [6] - Astrana Health's stock is currently trading at 0.4x estimated 2027 sales and about 6x on an EV/2027 adjusted EBITDA basis, which is viewed as an attractive entry point for investors [8]

ALHAMBRA, Calif., Jan. 26, 2026 /PRNewswire/ -- Astrana Health, Inc. ("Astrana," and together with its subsidiaries and affiliated entities, the "Company") (NASDAQ: ASTH), a leading provider-centric, technology-powered healthcare company enabling providers to deliver accessible, high-quality, and high-value care to all, today announced that it will release financial results for the fourth quarter and year ended December 31, 2025, before the open of the stock market on Monday, March 2, 2026. The Company wil ...

Group 1 - The presentation is led by Abbey Stanley, an associate on the healthcare investment banking team based in New York [2] - Brandon Sim will present on behalf of Astrana, followed by a Q&A session with CFO Chan Basho [2]

Summary of Astrana Health Conference Call Company Overview - **Company**: Astrana Health - **Industry**: Healthcare, specifically value-based provider organization Core Points and Arguments 1. **Healthcare Infrastructure Issues**: The U.S. healthcare system is described as fundamentally broken due to accessibility, patient and provider satisfaction, and limited technology integration [2][3] 2. **Astrana's Model**: Astrana aims to transform healthcare delivery through a coordinated, aligned network that improves patient outcomes while generating financial savings for itself and its partners [4][5] 3. **Single Payer Model**: Astrana operates a pseudo-single payer model that simplifies the reimbursement process for providers, allowing for better care coordination and reduced administrative burdens [9][12] 4. **Member Engagement**: The company engages members longitudinally, allowing for proactive investments in their health, which is not typically feasible for traditional payers [5][6] 5. **Financial Performance**: Astrana has achieved a 33% CAGR in revenue over the past six years and plans to continue growing in the mid-20s in the medium term [17] 6. **Membership and Revenue Growth**: The company focuses on growing membership and revenue per member, with a significant shift towards full-risk arrangements, increasing from 0% in 2021 to approximately 80% of revenue by early 2023 [22][24] 7. **Cost Control**: Astrana has managed to control medical costs effectively, achieving 67% fewer hospital admissions compared to Medicare fee-for-service benchmarks [25] 8. **Technology Utilization**: The proprietary technology platform developed by Astrana enhances care management and administrative functions, leading to improved patient outcomes and operational efficiencies [26][28] 9. **Market Expansion**: Astrana has expanded to 16 markets, focusing on areas with high population density and diverse provider networks [48] 10. **Acquisition of Prospect Health**: The acquisition of Prospect Health is expected to yield $12-$15 million in synergies and strengthen Astrana's market position [21][39] Additional Important Content 1. **Regulatory Adaptation**: Astrana is adapting to changes in Medicaid and health insurance exchange markets, with a focus on maintaining a strong Medicare Advantage business [42][43] 2. **Industry Challenges**: The company acknowledges challenges such as increased scrutiny on risk adjustment and high utilization trends but believes it can manage these effectively [30][33] 3. **Collaborative Approach with Payers**: Astrana emphasizes a partnership approach with payers, aiming to create win-win scenarios rather than treating negotiations as zero-sum games [50] 4. **Long-term Outlook**: Despite short-term headwinds in Medicaid and exchange markets, Astrana is positioned to grow due to its focus on quality and cost management [45][46] This summary encapsulates the key points discussed during the Astrana Health conference call, highlighting the company's innovative approach to healthcare delivery and its strategic growth initiatives.

Investor Presentation January 2026 Forward Looking Statements This presentation contains forward -looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 , Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward - looking statements include any statements about the Company's business, financial condition, operating results, plans, object ive s, expectations and intentions, expansion plans, estimates of our total addressable market, our ability to ...

Core Insights - Astrana Health, Inc. (NASDAQ:ASTH) has received mixed opinions from analysts, with a Buy rating from Truist Financial and a lowered price target from TD Cowen [1][2] Financial Performance - For fiscal Q3 2025, Astrana Health reported a revenue growth of 99.71% year-over-year, reaching $956.05 million, which exceeded estimates by $3.22 million [2] - The company's EPS was $0.01, which fell short of the consensus estimate by $0.43 [2] Future Outlook - Management has lowered its full-year revenue guidance to a range of $3.1 billion to $3.18 billion, down from the previous range of $3.1 billion to $3.3 billion [3] - Adjusted EBITDA guidance was also reduced to a range of $200 million to $210 million, from the previous range of $215 million to $225 million [3] - The reduced outlook is attributed to anticipated headwinds in the Medicaid and exchange business [3][4] Analyst Commentary - Analyst Ryan Langston from TD Cowen noted that the cautious outlook reflects concerns regarding Medicaid and the value-based care (VBC) environment [4] - Astrana Health is characterized as a physician-centered, technology-powered healthcare company focused on delivering coordinated, high-quality care [4]

Revenue and Income - Total revenue for the three months ended September 30, 2025, was $956,048,000, a 100.0% increase from $478,710,000 in the same period of 2024[30] - Capitation revenue for the nine months ended September 30, 2025, reached $2,061,451,000, up 66.4% from $1,239,885,000 in 2024[30] - For the three months ended September 30, 2025, net income attributable to Astrana Health, Inc. was $373,000, a decrease of 97.7% compared to $16,094,000 for the same period in 2024[32] - For the nine months ended September 30, 2025, net income was $17,514,000, a decrease of 65.3% compared to $50,100,000 for the same period in 2024[32] - Earnings per share (EPS) – basic for the three months ended September 30, 2025, was $0.01, down from $0.34 in the same period of 2024, reflecting a decline of 97.1%[32] - For the nine months ended September 30, 2025, the basic earnings per share was $0.34, down from $1.05 in 2024, and diluted earnings per share was $0.33 compared to $1.04 in 2024[166] Expenses and Liabilities - Operating income for the three months ended September 30, 2025, was $19,210,000, a decrease of 32.5% compared to $28,425,000 in the same period of 2024[30] - Total liabilities as of September 30, 2025, amounted to $1,682,462,000, representing a 99.9% increase from $840,726,000 as of December 31, 2024[25] - General and administrative expenses for the nine months ended September 30, 2025, were $157,009,000, a 39.6% increase from $112,478,000 in the same period of 2024[30] - Total expenses of $936,838 thousand for the three months ended September 30, 2025, compared to $450,285 thousand in the same period of 2024, an increase of 108%[186] Assets and Cash Flow - Total assets as of September 30, 2025, were $2,237,186,000, an increase of 64.9% from $1,354,894,000 as of December 31, 2024[23] - Cash and cash equivalents increased to $462,227,000 as of September 30, 2025, compared to $288,455,000 as of December 31, 2024, reflecting a growth of 60.2%[23] - Net cash provided by operating activities increased to $117,483,000 from $63,146,000 year-over-year[48] - Cash paid for income taxes decreased significantly to $4,728,000 from $38,270,000 in the previous year[50] Acquisitions and Investments - The company completed the acquisition of certain businesses and assets of Prospect Medical Holdings, Inc., which is expected to enhance future growth opportunities[19] - The Company acquired Prospect Medical Holdings, Inc. for a purchase price of $674.9 million, financed by a $707.3 million loan[87] - The Company recorded acquisition-related costs of $10.3 million and $20.4 million for the three and nine months ended September 30, 2025, respectively[87] - For the period from acquisition dates through September 30, 2025, the total revenue from acquisitions was $308.0 million, and net income was $13.1 million[102] Debt and Financing - Borrowings on long-term debt increased significantly to $1,119,300,000 from $171,875,000 year-over-year[48] - The Company has future debt commitments totaling $1,064,209,000, with the largest portion due in 2029 amounting to $89,746,000[118] - The Company entered into a Second Amended and Restated Credit Agreement on February 26, 2025, which includes a $300 million revolving credit facility and a $250 million term loan[119] - As of September 30, 2025, the Company had outstanding borrowings of $122 million under the Revolver Loan and $942.2 million under Term Loans, with an interest rate of 5.91%[121] Stock and Equity - The company reported a total stockholders' equity of $775,543,000 as of September 30, 2025, an increase of 8.8% from $712,720,000 as of December 31, 2024[27] - The Company repurchased 300,000 shares of its common stock for approximately $10.6 million during the nine months ended September 30, 2025[132] - The Company issued common stock for contingent consideration payment amounting to $2,600,000[50] Tax and Regulatory - The provision for income taxes for the three months ended September 30, 2025, was $4,594,000, a decrease of 41.5% from $7,831,000 in the same period of 2024[32] - The Company's effective income tax rate for the nine months ended September 30, 2025, was 45.4%, up from 30.2% in 2024[158] Other Financial Metrics - Interest expense for the three months ended September 30, 2025, was $(17,718,000), an increase of 99.7% compared to $(8,856,000) for the same period in 2024[32] - The average effective interest rate on the Company's total debt was 6.33% for the nine months ended September 30, 2025, down from 7.08% in the same period of 2024[128] - The Company recognized amortization expense of $14.2 million for the three months ended September 30, 2025, compared to $6.7 million for the same period in 2024[106]

Core Insights - Astrana Health, Inc. reported quarterly earnings of $0.01 per share, significantly missing the Zacks Consensus Estimate of $0.47 per share, representing an earnings surprise of -97.87% [1] - The company posted revenues of $956.05 million for the quarter ended September 2025, exceeding the Zacks Consensus Estimate by 0.61%, and showing a substantial increase from $478.71 million year-over-year [2] - Astrana Health, Inc. has not surpassed consensus EPS estimates over the last four quarters, indicating a trend of underperformance in earnings expectations [2] Financial Performance - The earnings for the previous year were $0.33 per share, highlighting a decline in earnings year-over-year [1] - The company has topped consensus revenue estimates three times in the last four quarters, indicating some strength in revenue generation despite the earnings miss [2] - The current consensus EPS estimate for the upcoming quarter is $0.45 on revenues of $978.65 million, and for the current fiscal year, it is $1.24 on revenues of $3.2 billion [7] Market Position - Astrana Health, Inc. shares have increased by approximately 5.4% since the beginning of the year, underperforming compared to the S&P 500's gain of 15.6% [3] - The Zacks Rank for Astrana Health, Inc. is currently 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] - The Medical - Outpatient and Home Healthcare industry, to which Astrana Health belongs, is currently ranked in the top 19% of over 250 Zacks industries, indicating a favorable industry outlook [8]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $956 million, representing a 100% year-over-year increase and a 46% sequential increase, driven by the integration of Prospect Health and solid organic growth [8][19] - Adjusted EBITDA for the quarter was $68.5 million, up 52% year-over-year and 42% sequentially, indicating strong profitability during rapid growth [8][19] - The company ended the quarter with approximately $462 million in cash and short-term investments, and net debt of approximately $624 million, with a net leverage ratio of about 2.5 times on a pro forma trailing 12-month adjusted EBITDA basis [20] Business Line Data and Key Metrics Changes - The care enablement segment saw significant growth, more than doubling revenue quarter-over-quarter due to the addition of Prospect's provider group clients [19] - Medical cost trends remained stable and in line with expectations across both legacy Astrana and Prospect businesses, with Medicare trending favorably below the 4.5% expectation [9][19] Market Data and Key Metrics Changes - The company reiterated synergy targets of $12 to $15 million from the Prospect acquisition, focusing on aligning provider and patient experiences, standardizing operating systems, and implementing the Astrana technology platform [10][20] - The integration of Prospect is expected to enhance Astrana's scale and capabilities, particularly in Southern California, where the company aims to serve patients and payers with a single integrated delivery model [11][12] Company Strategy and Development Direction - Astrana's strategy is built on four pillars: smart growth, disciplined risk progression, quality and cost excellence, and operating leverage through technology [7] - The company is leveraging AI to improve efficiency and care quality, with initiatives such as predictive models for high-risk patients and AI-driven tools for claims analytics [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of Prospect and its potential to drive stronger performance heading into 2026, despite some anticipated headwinds in Medicaid and exchange businesses [15][16] - The company updated its 2025 revenue guidance to a range of $3.1 to $3.18 billion and adjusted EBITDA to a range of $200 to $210 million, citing timing considerations rather than changes in underlying performance [14][21] Other Important Information - The company is focused on maintaining a disciplined approach to growth, ensuring that full-risk contracts are only entered into when data and infrastructure are in place to manage risk responsibly [14] - Management highlighted the importance of cultural integration post-acquisition to ensure long-term success [10] Q&A Session Summary Question: Revenue guidance update related to full-risk transition timing - Management confirmed the delay was strictly procedural and related to both legacy Astrana and Prospect businesses, with expectations to complete transitions in Q1 2026 [24][26] Question: Details on the Intermountain Health partnership - The partnership aims to enhance care coordination and affordability in Southern Nevada, with potential for future expansion into additional states [30][32] Question: Medicaid cost trends and expectations - Management anticipates Medicaid margins to stabilize by late 2026, with current trends showing improvement [36][38] Question: Margins by segment - The care enablement segment showed strong EBITDA margins due to rapid growth and effective management, while care partners' margins were slightly lower due to higher trends in the legacy Prospect business [42][44] Question: Medical cost trends and expectations for 2026 - The blended weighted average cost trend was just under 4.5%, with expectations for conservative management in light of potential regulatory headwinds [78][80] Question: Full-risk contract transition guidance - Management expects high 70% of revenue to come from full-risk contracts in 2026, with ongoing success in moving contracts to a delegated model [94][96] Question: Organic growth excluding Prospect - The core Astrana business continues to grow in the mid-teens, while Prospect is expected to grow in the mid-to-high single digits [100][102]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $956 million, representing a 100% year-over-year increase and a 46% sequential increase, driven by the integration of Prospect Health and solid organic growth [8][19] - Adjusted EBITDA for the quarter was $68.5 million, up 52% year-over-year and 42% sequentially, indicating strong profitability during rapid growth [8][19] - The company updated its full-year 2025 revenue guidance to a range of $3.1 billion to $3.18 billion and adjusted EBITDA to a range of $200 million to $210 million, reflecting timing considerations rather than changes in underlying performance [14][21] Business Line Data and Key Metrics Changes - The Care Enablement segment saw significant growth, more than doubling revenue quarter-over-quarter due to the addition of new provider group clients from Prospect [19] - Medical cost trends remained stable and in line with expectations across both legacy Astrana and Prospect businesses, with Medicare trending favorably below the 4.5% expectation [9][19] Market Data and Key Metrics Changes - The company reiterated synergy targets of $12 million to $15 million from the Prospect acquisition, focusing on aligning provider and patient experiences, standardizing operating systems, and implementing the Astrana technology platform [10][20] - The integration of Prospect is expected to enhance Astrana's scale and capabilities, particularly in Southern California, strengthening its ability to serve patients and payers [11][13] Company Strategy and Development Direction - Astrana's strategy is built on four pillars: smart growth, disciplined risk progression, quality and cost excellence, and operating leverage through technology [7] - The company is leveraging AI to improve efficiency and care quality, with initiatives such as predictive models for high-risk patients and AI-driven tools for claims analytics [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the integration of Prospect and its potential to drive stronger performance heading into 2026, despite anticipated headwinds in Medicaid and Exchange businesses [15][16] - The company is optimistic about tailwinds from improved Medicare Advantage rates and the realization of synergies from the Prospect acquisition [15][16] Other Important Information - Cash flow from operations for the quarter was approximately $10 million, with a nine-month total of $118 million, and the company expects full-year free cash flow conversion of approximately 40% to 45% of adjusted EBITDA [20] - The company ended the quarter with approximately $462 million in cash and short-term investments and net debt of approximately $624 million, with a net leverage ratio of about 2.5x [20] Q&A Session Summary Question: Revenue guidance update related to full-risk transition timing - Management confirmed the delay was strictly procedural and related to both legacy Astrana and Prospect businesses, with expectations to complete transitions in Q1 2026 [24][25][26] Question: Details on the Intermountain Health partnership - The partnership aims to enhance care coordination and affordability in Southern Nevada, with potential for future expansion into additional states [30][31][32] Question: Medicaid cost trends and expectations - Management anticipates Medicaid margins to stabilize in late 2026, with current trends showing improvement [36][37] Question: Margins by segment - The Care Enablement segment showed strong margins due to rapid growth, while Care Partners' margins were slightly lower due to higher trends in the legacy Prospect business [42][43] Question: Medical cost trends and expectations for 2026 - The blended weighted average cost trend was just under 4.5%, with expectations for conservative management in 2026 due to regulatory headwinds [80][81] Question: Full-risk contract transition guidance - Management expects high 70% of revenue to come from full-risk contracts in 2026, with ongoing success in moving contracts to a delegated model [96][97] Question: Organic growth excluding Prospect - The core Astrana business continues to grow in the mid-teens, while Prospect is expected to grow in the mid-to-high single digits [101][103]