P3 Health Partners (PIII) Q1 2025 earnings summary

Executive summary

• Achieved breakeven or better in three of four markets in Q1 2025, ahead of turnaround plan schedule, with operational initiatives and strategic focus on efficiency, contracting, and execution driving improvements.

• Membership and revenue were intentionally reduced year-over-year to optimize network quality and profitability, while per-member funding increased due to improved disease burden capture and contract renegotiations.

• ACO REACH membership grew 60% year-over-year and is now profitable, contributing positively to EBITDA.

• P3 Health Partners operates a physician-led, value-based care model focused on Medicare Advantage members, with 115,500 at-risk members and 2,800 affiliate primary care physicians as of March 31, 2025.

• The company reported a net loss of $44.2 million for Q1 2025, an improvement from a $49.6 million net loss in Q1 2024, driven by strategic contract rationalization and cost controls.

Financial highlights

• Q1 2025 total revenue was $373.2 million, down 4% year-over-year, reflecting strategic network and payer rationalization.

• Average at-risk membership declined 8% year-over-year to 115,900, consistent with the strategy to exit unprofitable plans.

• Medical margin was $17.2 million ($49 PM/PM), down from $36.6 million year-over-year, impacted by a $23 million prior claims adjustment from a single payer; normalized MLR improved to 89% from 96% in 2024.

• Adjusted EBITDA loss was $22.2 million ($64 PM/PM), compared to $19.8 million in Q1 2024, including a $9 million negative net from prior year claims and retroactive adjustments.

• Net cash used in operating activities was $33.5 million, up from $20.0 million in Q1 2024; unrestricted cash at quarter-end was $40.1 million.

Outlook and guidance

• 2025 guidance reaffirmed: year-end at-risk membership 109,000–119,000; revenue $1.35B–$1.5B; medical margin $174M–$210M; adjusted EBITDA $(35)M to $5M.

• Additional EBITDA improvements anticipated from payment integrity, end-of-life care management, and payer reconciliations.

• CMS final rate notice for 2026 indicates a 5% increase, supporting future growth.

• Management notes actual results may differ materially due to various risk factors.