Astrana Health (ASTH) TD Cowen 45th Annual Healthcare Conference summary

Financial performance and guidance

• FY2024 revenue reached $2.03 billion with adjusted EBITDA of $170.4 million, reflecting 17% EBITDA growth.

• FY2025 guidance projects $2.5–$2.7 billion revenue and $170–$190 million adjusted EBITDA, including $15 million in integration and AI investments, and excludes Prospect Health contributions.

• Prospect Health acquisition is expected to add $1.2 billion revenue and $94 million adjusted EBITDA, with $12 million in synergies by 2027.

• Medium-term guidance targets at least $350 million adjusted EBITDA by 2027, driven by core market growth, new market improvements, and synergies from the Prospect acquisition.

• Profitability in new markets is progressing, with Texas and Nevada expected to reach breakeven in 2025.

Strategic acquisitions and integration

• Prospect Health deal includes medical groups, risk-bearing entities, and one hospital, with audited financials confirming $94 million adjusted EBITDA.

• Integration focus for the next 12 months, with no large M&A planned; high confidence in integrating Prospect due to management familiarity.

• Smaller 2024 acquisitions in Arizona and Hawaii, plus partnerships with physician groups and EHR providers, are now embedded in market P&Ls.

• CHS expected to reach profitability in 2024, with a scaled presence across multiple states and targeted operational investments for growth.

• Astrana replaced a 364-day bridge loan with a $300 million revolver, $250 million TLA, and $745 million delayed-draw TLA, strengthening its capital structure.

Business model and risk management

• Operates a delegated financial and administrative model, acting as a payer and managing premium dollars and claims directly.

• Focuses on prudent movement to full risk contracts, with full-risk capitation revenue projected to rise from 53% in 2024 to 65% in 2025.

• Carves out risk for items not under direct control, such as supplemental benefits and Part D, to maintain profitability.

• Model provides strong visibility and control over utilization and financial outcomes compared to peers.

• Management remains focused on derisking regulatory and Medicaid reimbursement uncertainties, excluding potential Medicaid renegotiations from 2025 guidance.