agilon health (AGL) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 28% year-over-year to $1.45 billion, driven by a 37% increase in Medicare Advantage membership to 525,000 and 51% growth in ACO model beneficiaries to 132,000.

• Despite strong membership growth and robust demand, Q3 results were negatively impacted by lower-than-expected risk adjustment, $60 million negative prior year development, and $25 million higher current year medical expenses.

• Adjusted EBITDA loss was $96 million in Q3 2024, compared to $6 million earnings in Q3 2023; net loss widened to $118 million from $31 million year-over-year.

• Strategic actions include exiting two unprofitable partnerships and select payor contracts by year-end 2024, and delaying onboarding of a 2025 partner due to data exchange issues.

• High MA quality scores and ACO REACH performance reinforce leadership in value-based care.

Financial highlights

• Q3 2024 total revenue was $1.45 billion, up 28% year-over-year; year-to-date revenue reached $4.53 billion, up 39%.

• Medical margin was negative $58 million in Q3 2024, compared to $111 million in Q3 2023.

• Adjusted EBITDA loss for Q3 2024 was $96 million, versus positive $6 million in Q3 2023.

• Cash, cash equivalents, and marketable securities at quarter-end were $399 million; total debt was $35 million.

• Medical services expense increased 47% year-over-year in Q3 to $1.51 billion.

Outlook and guidance

• FY 2024 revenue guidance updated to $6.05–$6.07 billion; medical margin guidance lowered to $210–$240 million, including ~$100 million negative prior period development.

• FY 2024 Adjusted EBITDA loss expected between $135–$155 million, down from previous guidance.

• Q4 2024 revenue expected at $1.51–$1.53 billion, with medical margin of $5–$35 million and Adjusted EBITDA loss of $65–$85 million.

• Full-year 2024 MA membership guidance raised to 527,000; Q4 expected MA membership: 526,000–528,000.

• Cash usage for 2025 expected to be $110 million, with break-even cash flow targeted for 2027.