Earnings call transcript Q4 2022

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Operator

Hello, everybody, and welcome to the agilon health Fourth Quarter 2022 earnings call. My name is Sam, and I'll be coordinating your call today. [Operator Instructions]

I will now hand you over to your host, Matthew Gillmor, Vice President of Investor Relations, to begin. Please go ahead.

Matthew Gillmor

operator. you, Thank welcome and call. Good to afternoon, the me Tim Bensley. our Steve CEO, CFO, our and Sell With is

Following from Q&A session. prepared conduct will remarks Steve and we Tim, a

filings. we by Actual our and update results that note differ assume materially uncertainties statements. remind Please to Before with stated business. may due may like uncertainties or to no those in and and implied questions statements. risks remarks our statements we are responses you to forward-looking include from I'd begin, forward-looking These SEC our that discussed obligation to forward-looking risks any

A Form certain financial management these Additionally, that with GAAP measure consistent are providing views will and results complete a of measures the on earnings believe non-GAAP helps results. measures this the more X-K investors gain and is financial in call financial our we press measures most reconciliation these better to how release We filed is our comparable financial financial of measures. non-GAAP and discuss SEC. with the available understanding

I'll that, to Steve. call over with turn the And

Steve Sell

evening, incredible and Good partners, for we us. physician for XXXX and you very strong Matt. Thanks, year XXXX was agilon entered have and momentum. our joining with a thank

system. our We care communities care by health to doctors transition vision have empowering to progress made care significant against value-based a primary transform to in XXX-plus accelerate the

in patients analysis mid-January of diabetes. in highlights model, published with The specifically we success research the our

you if for significant consequences of many affects long-term XX% have not and As diabetes can population seniors. about managed, the of know, properly Medicare health

vast simply in improvement the the possible in is of are country. fee-for-service not fee-for-service in a control, total quality. communities and these prevalent of this health to model, when by for Xx a XX% agilon greater Medicare improvement equity in patients Partners AXc analysis Our which majority in diabetic a results found legacy care Advantage Medicare and saw that and like compared lower cost benchmarks Consistent cared access Physician meaningful

in variability we for success the outcomes and variability significant we ultimately fee-for-service system. access, complex in addressing cost. end, the that way a With our To that better our multi-decade diabetics, managed, in cost opportunity making managing strides in addressing quality meaningful driving early lower at are see defines partners agilon the and are patients

physician Our value-based model to is them business. our distinctive allows to it unlocking primary rapidly infrastructure see care What network and This incredible more make an versus is model. delivers model. doctors, payment communities and agilon, outcome outcomes a better good of results is transaction-driven platform the in to the good an for their additional doctors patients can a consistently across that primary for transition and for you care business operate and new ultimately our partners for delivery model our and care creates

another number XXX,XXX are with in that we pleased figures diverse XXX,XXX senior care at for geographies. record new add And XXX,XXX are serving will Today, will new to in patients. least These X,XXX add with to include we opportunity patients XX we primary senior we grow. XXXX, nearly share doctors today, the in that members XXXX. the

call. context, period, For XXXX reporting which the we membership Medicare membership the will on in today XXXX be approximately our double total this are Advantage

and surplus into Our of back surplus half medical accelerating wasteful in momentum in meaningful spending, margin, markets to health both call our primary we care. reductions that new drive roughly we reinvest and comes a from current ability local generating that

large membership making our across million, believe the highlights Our We operate at earnings of physicians be projected of nearly in and rapid for how is number a and set care for this latest growing an the also and a a medical standard primary reflective winning growing in catalyst the of that doctors on nationally. agilon of the agilon care primary of for large partners changing change incredible The power can and step together is platform diverse in margin markets, landscape. common this stabilizing $XXX care XXXX and maturation inflection business health platform.

EBITDA XXXX Now overall in The evident across organization our future. strong investments a or full key better in was substantial direct to we platform technology very out results all business $X.X as closed our quarter performance. million, across in year. line and to metrics, of made for momentum enabling the our year Performance Advantage as and even Medicare infrastructure a was adjusted fourth contracting scale

business, increasing month MA increasing membership most XX%, business well medical one XX%. performed For margin extremely XX% core per the important increasing medical in of On metrics year, margin with and full our per member the medical XX year XX% subscription XX-plus improve X in our accounted percent $XXX, from full our plus adjusted their to EBITDA. $XX partners by the margin improvement $XX year which for fast-growing million of

in Similarly, year, and ahead of or expectations reach came for EBITDA. the adjusted to contributed the contracting and quarter modestly business our full direct

to follow-up model as achieve continue We to on performance the contracting were track quality in XXX% a better strong score, for direct discharge cost X% quality such power and national post-hospital the our visits. deliver patients than and trend, to demonstrate as reflecting our are of and excellence areas timely costs we

increased years physician as savings $XX of as innovation partners. of that the surplus to Our program we increased transparency confidence the the to well experience combination and this calculations level to overall opportunity center see estimated million the XXXX back of our our drive performance. from and performance in an program Medicare X level of The has in on reach drove an future in revenue in positive

XXXX. Turning to

they margin projected last to adjusted in medical business even did grow faster guidance revenue, momentum the EBITDA as reflects than and are membership year. our all Our

to a million at growth. adjusted Our we of XX% $XX sustaining the increase are MA EBITDA $XX million approximately guidance of $XX midpoint year-over-year reflects where million membership

corporate substantial in operating leverage like year generate adjusted at EBITDA which in our is by markets, the and XXXX, Just the inflection XXXX market our powered X-plus level.

is current continue to while membership or drive markets our is being This highlighting XX% X X significant we in but the earnings operating leverage adjusted the full as XX% is in XXXX. to embedded also of being market the local versus improvements infrastructure long-term created, in in inherent period. year in the And a medical setting up of flow-through delivered, risk step margin These highlight dollars in significant. for EBITDA change earnings results incremental the

our XXXX is takeaway of in the The maturation EBITDA that gains accelerating our beyond. is and adjusted markets and members

Looking to XXXX.

demand that the new and states, physicians. of As onboard network earlier, primary members growth. care collective XXX groups, success and our class at reflect is be least mentioned as we XX,XXX class driving X will The I the performance will will This new improving both momentum X XXXX of our a agilon at practice that and model and new we predicted payer care least last demographics, the move at with fee-for-service. primary demand challenges for double by away driven senior the success March Day dynamics our for from physician the size a accelerating partners, of powerful reflects Investor and our

class market. the diverse very step in care, independent large health of both for affiliated local and The include and addressable power are organization tapping of and the the meaningful the XXXX with forward groups and partners XXXX unique represents systems. employee multi-specialty class note, a primary growing of Of

market model have in local in payment power We highlighted transforming past the full the risk. to a the of

of market. care, can our and confidently health local leveraging full Once established, other and value-based learnings infrastructure is quickly care physician risk move the that value-based infrastructure organizations, systems, into including

As XX-plus years. we the to over have markets past XX expanded purposely states and X

within next partner have of particularly organizations established year's This TAM ourselves and large driving million includes new for and We in-market year. XX.X care doctors for an states outsized markets our growth class primary XX,XXX patients. in-market senior existing

for company's I fire-based point This, new and cycle, increasing our of The the including yesterday. As last positions platform margin. further of to much acquisition coupled call, Minerva uses period will with the groups mentioned implementation which and scale mphrX, new to across this standards medical our accelerated, longer Performance for aggregate, platform partners we life XXXX. our a sales and allow data cycle earlier health a our partner quality in our completed partners networks. care by delivery exchange in performance will their generate higher supported be new for outcomes in of access starting has

our piloted speed, into partners enable implementation faster health especially communities, existing and during some more with technology onboarding complex systems. ability in integrations, rapid EMR additional of particularly and to agilon's will will process. integration The our of support our improvement integration physician This with networks their systems. and this enter new We technology time EMR have and platform, with team market scale technology known for their XXXX distributed

of current leadership Every continued us and our effectively technology this important new our and to drive should physician in partners outcomes time us is strengthen implementation to and during accelerate our process, and incremental platform position. to buy success week further investment accelerate for both patients our ability partners allow and will

partners these for getting volume the our to relationship business, and that clear delivering I me XXXX been more looking in on CMS with care care more Let success between outcomes members perspective feeling patient the move extremely assessment, I built macro on the the never points period the new less are performance with quality senior their for plans of of agilon's of final RADV type by our the And our are increasingly the mature accelerating the in more system that some that beyond. is both cost CMS rather platform the than emphasizes close include a recent developments challenges new levers only health system has It XXXX, earlier, on care And at the and I rule. medical increase health immediately great. for bullish improved rewards The fee-for-service doctor Agilon advanced and effective When that markets, primary in stronger. too opportunity. in primary and visits. health look to and environment. model implementation been a in from notice solely would and a am environment. starting have and tailwinds

turn me let things that, to Tim. With over

Tim Bensley

some guidance statements on for XXXX. Thanks, Steve, and everyone. additional I'll our and financial good highlights review details provide for our evening,

end increased at XXX,XXX. guidance Advantage to members our and contracting to XX% our on membership. agilon approximately live contracting with increased approximately the XX% to XX,XXX. the Medicare of direct Direct Starting range. membership including Medicare Advantage membership Total both increased XXX,XXX platform, high

our on in membership XX% existing within million $XXX was and by Our to the during new live growth quarter. basis geographies. MA increased geographies the partner fourth growth a Revenues driven XX% XXXX that year-over-year went January X

revenues revenue reflects million $XX to market in for full primarily primarily to or geographies. by from MA gains Revenue driven billion. year, basis growth member $X.X full mix. existing a X% for approximately increased member month and fourth benchmark XX% PMPM quarter the membership which per updates and year-over-year increased our new and the per was Medical XX% For year, the increased and On margin quarter.

For medical year, the $XXX XX% to margin full increased million.

with on of in medical PMPM membership Even dilution higher strong a and from of revenue growth a margin our a X basis. increased and markets, proportion the year percentage members our as

XXXX, medical medical For and margins Medical the versus X.X% margins our were significant benefited $XX full margin year our to markets stronger in revenue XX.X% and year. year X XX% PMPM year increased from in year. performance plus X partner compared of last $XX last gains to markets.

year Network our to partner As $XX quarter. increased contribution, the to PMPM increased medical XX% in XXXX. from which XX in $XX margin medical of X-plus fourth agilon Steve reflects $XXX margin XX% on by share during XXXX, mentioned, up markets million in

as reflects million network of million. gains support and For which contribution XX% margin $XX to Platform our as the contribution increased the enterprise well The increased XX% full relative margin contribution across medical network level markets. the costs, G&A, in $XXX quarter. market to increase include year-over-year in fourth medical year, in

million. support increased $XXX platform to costs year, full the XX% For

support Platform scale The were during due our support to QX, trend revenue than in our forecast our cost reflecting growth business to XXXX costs model. the below investments growth and our well efficiency of platform internal continues help partnership largely in higher our to beyond.

platform For year. support revenue declined to X.X% to the full cost compared last year, X.X% of

was year-over-year markets, driven for higher by EBITDA medical gain EBITDA compared quarter was million The to compared operating year. million plus last generate and million was $X.X $XX partner in year. the the significant full G&A. EBITDA leverage to adjusted $XX.X margins full adjusted in against last negative year a basis, in year our On which positive negative million adjusted primarily million X enterprise market $XX.X negative Our $XX.X year

$X EBITDA million is which reflected other quarter basis and for on positive the income, net a Adjusted full from contribution the contracting, year. $XX million was direct within in positive

performance benchmarks. underlying cost contracting Our a remains direct continues standpoint and in strong from quality to and outperform

revenue the positively This to updated benchmarks. impacted retro During adjusted offset the quarter, previously. the our support contribution for I trend platform mentioned estimates adjustment, provided investments EBITDA which drove CMS modest upside and

sheet balance our flow. to and cash Turning

and and capitalized not $XXX drive $XX we debt. in of future outstanding any million marketable cash As XX, in and capital well remain to million had growth. needing do December external extremely our We securities anticipate

to Additionally, we anticipate into positive move cash generating XXXX. flow continue as we

position including balance targeted sheet investments. significant both us flexibility Our external and platform, adjusted progression strong scale EBITDA further strengthen investments to gives our to scale and and our internal make

external From acquisition can leverage we to complete membership to targeted end, base. of continue perspective, evaluate To we capabilities that mphrX. pleased our that an growing the are

new accompanying platform we of expect will faster the accelerate we afternoon, through release mphrX of press and this As existing referenced partners technology the issued integration. in our integration data performance onboarding our the into

in in beyond. do XXXX accretion EBITDA XXXX, will modest the of While adjusted our acquisition levels we and expect contribute to

to From our costs million stepped geographic investments million we costs in focus an increase factors, we to continue $XX growth. the view XXXX, positives. can up going our -- The entry key last $XX in which to X technology in internal and XXXX. we entry as relates perspective, geographic year from In

class XXXX of estimate went over partners of original This the year. January XXX,XXX live double to class compared our of in included the size new is almost which this of and XX,XXX. the XXXX members, First, of

XXXX sales go next Second, new the shorter given of in financials our with live January partners, which some costs cycle, year. associated class the XXXX of include implementing will

range. the incredibly geographies including and attractive efficient economics This returns. to unit geography member retention and total, our considering member In costs, high is our will new in $XXX $XXX improving and acquisition generate remain both very same

as Before we our turning These to during financial disclosed our identified to in impact statements. our audit note first did did our want internal which we guidance and company for our XXXX, weaknesses I public XX-K that have Sarbanes-Oxley X identify controls, were in material a not filing.

maintaining as this soon We controls as are committed to strong and are to possible. internal remediate implementing procedures

guidance. our to now Turning

full expect growth to including steady members the XXX,XXX membership XXX,XXX range will ending the ACO at the at XX,XXX reach on For platform of membership agilon year midpoints. live to approximately membership a XXXX, grow to we MA approximately XXX,XXX and XX% in

inflect or range approximately of XX% the to higher of platform billion our in medical million at maturing same while more a growth We driven we the partner XXXX. the EBITDA markets, EBITDA expect cost than million. by to This revenue we across in members support from growth continue in billion time, continued with leverage. range to midpoint. our $XX offsets $X.XX are This anticipate progression to $X.XX also adjusted accelerating our as membership along At will new $XX margins growth dilution our accelerating is and markets

EBITDA $X.XX of quarter, million growth $X.XX first the MA adjusted revenue $XX For XXX,XXX to membership to billion we $XXX,XXX, of billion and of expect $XX million. to

This expect to adjusted to the normal the year. other reflects the in drive year. see in as throughout it release, can call our will mix we of of the margins XXXX agents medical the press Three moderating part you from As items seasonality out latter relates our guidance EBITDA guidance. table our in higher

in generate First, EBITDA million of we to adjusted $X $XX modest will expect million. XXXX a in direct contracting contribution range

the We this approach year estimating to back weighted be also prudent take factors. in plan and towards expect we adjustment will other the trend half the retro of as a

on approximately contribute mphrX $X adjusted the for the immaterial for million expect XXXX acquisition will we our revenue with an Second, year. impact in EBITDA

likely push implementation XXXX that into period. markets. our class our in the growth partner for existing several decision same note a and our during This within reflects provide low new of geography I'd range XXXX longer double-digit the Finally, to geographies our will partners trend across

we're to that, now take questions. your With ready

Operator

from question of Instructions] first Our Lisa [Operator Gill JPMorgan. comes

Lisa Gill

just know a the But nice detail the You I to rates Steve, and do Is a Two, had next substantially the you little margin? medical about lot just know here. higher? that XXXX. few in got for you it is the hone the translates how maybe MA through wanted being I components of if our I metrics gave we rate, acuity I about the that. month can ago. talk that better risk about for of a think scores? were to on to levels at a a year. think number How conference over revenue revenue that revenue higher, Are One, then here.

Steve Sell

XX So kind a revenue for Tim of you, has unit nice I'll step-up. dimensionalize let that Lisa.

Tim Bensley

Yes.

have course, big of and Then is that's going you this of in membership of very markets benchmark increase X% as a in course, in to a I fact, of In with. revenue improvement in. up year range would is because PMPM coming especially approaching we mean, on range of in the wrap would first across year your tops some expect of is pickup blended continued least we members younger revenues number. kind so and begin X we and our increase kind you itself revenue, or of that at, look I that that on top around when PMPM basis, well, which, the to basis. at think, on And then that X% But kind of large X% get to sort that, markets a out our X sort

a strong combination to growth overall that us membership gets with revenue So that very number. in

Steve Sell

and us, higher for there demonstrate to move do, higher these we of add care them. within think therefore, And attractive are on I success mix what spend for to Lisa, part service, them as we found that They're there love we rates value comment to to we've and our out and you been are able starting health points markets think first. about really with one that being and fee thing to is, going Tim's markets want I would if we XXX%

those realize class with revenue a Tim that markets how large about, X composite referenced. year you accounts higher is the this when factors that that baseline number you plus for that higher have talked And

Operator

Lake is Research. Our Justin Wolfe from of question next

Justin Lake

So not I in every physician wanted ACO reach seeing of on membership know year-over-year. group are the I physician to terms there. ask not basically X What is quickies. you flat One, in groups?

some So seeing membership. are you seeing underlying Are exit? the some changes in you entering

some lived Steve, bigger on on is that. a probably your The new model. I rates through model. change in then to that they question California. from people get the score comments Just positive gave this love on understand how risk risk time to back last you put and the you big trying hear And Would through in this commentary

love would maybe to how I how might you've that seen So you think limited affect of thoughts hear how kind of it your agilon. on and that -- change

Steve Sell

Sure. questions. Two Thanks, Justin. fulsome

So that's in the partners flat. sort and 'XX relatively have ACO on quickly real in reach, year-over-year 'XX, same we that of

on did early having that a 'XX implementation 'XX. very we're partners we some pushed As January, shared in could gone we point. strong a starting good focused and have have to in We because

membership. see in additional we and for so 'XX beyond opportunity And ACO reach

We continue see very as to it program. strategic a

really and pleased cost results a perspective. our with I quality from think we're

get the having within of The direct and practice that very Medicare really strong. concentration we and community value Advantage in that both contracting with is the

contracting So of years on now X with we're experience transparency and almost and full a on better and runout bullish direct and visibility XXXX.

that , in anything see cautious. Yes there us is can that, upside which within results we as to go add? was are forward, for being we our although encouraging some You

Tim Bensley

Yes.

so the drive continue the we've the rate overall just of benchmark is previously those have than performance and really and advanced had I'd game after on than that reach. performance move beat obviously, and in be question, score, to for cost far contracting ACO that to higher pretty out, mean the doing the now transition XXXX. quality expect we a we're I pleased costs say we're name that bit we basically both notice got with little XXX% helped DC benchmarks expected we drive high quality, or cost and to Before

the very in or prudent little the less in discount XXXX, prudent. that $XX we're to of be bit expect to -- XXXX little saying would the guess, a -- mention in range. did We've bit $X being we a the the global got will and it We trying contribute the step-up, combination both for trying ACO that probably step to and that than be down million I we're global reach just million

Steve Sell

feel about of everyone done the has recalibration the the then, on your that our the if about is X% that notice and the probably We've like really question XX% changes. I for And within composite that work. basis, Justin, adjustment market-by-market The the and for it's serve, in that's we've what you the manageable we the think populations And kind of we this in we And very on rate out -- headline impact context do at go preliminary is of like you and been We, think a we line called second proposed gone risk makes through us. HCCs sense. nationally. with look model to the markets

We their are going life that early fee-for-service. are markets. year year of to XX% cycle. is X They're X XXX% really in our markets or in membership

variability out quality, taking adjustment. on working are but also on risk on cost We and

so And or prevalence we can our we at at -- look we below of to when prevalence our numbers look to be capture, those. relative relative some regional numbers when

might very therefore, nearly patients find So it model is that's I there's as a you opportunity this such as great of concentrated as impact and more not complex clinic think the duals. with

I that we are a nice as well confident how getting we continue in -- when going the I today, as that really to about and platform to give am We're we're 'XX 'XX, 'XX. the earlier. beyond in us exercising think it's members and levers are exercise I talked on lift about

at for today said, classes X for in to out the we and than larger what of close going we with just seeing about opportunity Think what 'XX what reported to from MA we're to 'XX, be least which are that. just XXX,XXX our 'XX the is of membership double I you in significant,

dilutive margin markets come level. got point on they're Second breakeven. a that is typically We've They're X higher certainly points. year starting med in,

we're can implementation cycle which on really starting third excited then thing And cohort about, is just longer that this point. a help with across acquisition, the the migration really time. ability Our

we think We're it. period. we We with so this. transformation the like and and force can participated the BMA APG And task manage comment health on I care feel obviously in

be something and think of are more magnitude we much of I dramatically that of and than are are type this we there impacted supportive change. in others phasing would

There's us, for of surge push the And the I remarks, always from towards I'd talked is it's looking But terms challenge just of in manageable. a the value been terms trend think make guess my the point for is more macro which in about fee-for-service. factors I in there's I last of to for payers demographic physicians, demanding, the and seniors value. what

just notice is going think that. to accelerate I happened what with this

the If are nationally Advantage, that the you vast that payers MA move want that payer Medicare about that fee-for-service to I is their think it's going solution think agilon from it's for for membership I They solution of the chassis. to And talked side, sits in think because health. about. Who variability on majority a of and who the is side, that physician agilon. from a I

so think headline a it it's volume to But going is I this we're we'll We'll know settles on where a win think from the see perspective, And I manageable. in month. out.

Matthew Gillmor

Steve medical clarification. dilutive basis. one mentioned just margin new on being markets And a

EBITDA. I think you probably meant

Steve Sell

I'm sorry.

Matthew Gillmor

question, move the please. Operator, okay, we It's to next clarify. to but can just

Operator

Andresen And question our Truist Securities. Jay comes next from from

Unidentified Analyst

question the what Actually, to related clarification, you is just my Matt, gave.

to year impact of nature guidance we medical How well margin this year PMPM of year? unique the about to performed target compared of your X this class margin medical does 'XX So medical X view, margin terms think class should of you in Clearly, of your how about 'XX think year's $XX class on $XX. this

Tim Bensley

take that. so. This is I don't Tim. I'll think

very that class got the within XXXX. -- is range sides both But still say got of year. is on of -- appropriate XXXX some we still the large be $XX -- that within for the in looking I think starting going of very class class still We've that. the to we're $XX We've point. for 'XX, that, of this range a at to it's class,

Unidentified Analyst

of discussions provide that ask here the you If Health is on exploring more how any for believe on plays -- we out? with one systems? actively class can can do approach Or you quick partnerships you your update wait-and-see there a Main Are health those on 'XX?

Steve Sell

can I update you mean think a question. I Yes. it's that. I on great

in As employed of and I that class or are independent affiliated. physicians remarks, our with systems 'XX the the part physicians them. both affiliated health shared includes

we our a more Investor will for as that. tremendous on going I But us. our at growth we're so -- and give class we to And expand area lot Day 'XX think this a you of see

population health reimbursement primary labor value. are many physicians senior partners from the this I in a seeing tremendous our they've challenges think that opportunity that of world, And systems changes, got seeing. fee-for-service their costs, move a physician to are care with to

media at month. end to much more detail So that we're give the class going to able be the of see that again with the at of 'XX we'll and you

Matthew Gillmor

Operator, question keep to one full we just why to the queue. just we on. get could If so don't it can move we

Operator

America. Bank our Fischbeck Kevin of from And comes from next question

Kevin Fischbeck

potentially more guys about thinking you little mphrX. implementation? when Great. this months that I you do accelerate this frame being your XX with you warning? ability bring I where only just had you go about time implementation about Are this more of advanced is faster a because to wanted does color prepared to would faster of someone XX months implementation can live talked more Or to with on get on it have wait

Steve Sell

able scheduled, get visits patients a the took as can do It's on clinical market doing terms Each for the XX% to implementation weeks. up using The many Kevin, that earlier, technology is nerve we're pilot, continue as programs months get worth of you, them it in our Well, to ability get to that example X our I'll And period. population. us in the give X an in to lot the months faster is take technology, a way. it going think to month we set we in I that XXXX old in of were we example. ability in utilize this stratify

I of implementation them when assessment that say, is resources time is it heart getting it really they in said into would getting I what us need us to and that the gives the the around which get so getting that that more And time buys patient that.

so should was the over medical because our of we're way improve impact. were quality we And to quality this versus data immediate expense through on our us the that getting there. is the The will doing help powerful This clinical it. time and improved most

Some variability that came of out.

excited Kevin, about it's of things, think I those So leave pretty us acquisition. that a combination the

Tim Bensley

to partners and that multiple I gives out think their of it's EMRs continued be some large This types partner that organizations these really with, of larger types have number really and of type kind the number just more we we including now diversify within very kind important strategically PO go of us partners. a able capability service of -- to diverse have large a to system. as

to -- really of going with that kind well. is this it's partnership impactful as be So

Matthew Gillmor

next to why we the Operator, one. move don't

Operator

next from Dodge question Our comes from Sean RBC.

Sean Dodge

we start larger I shift of will had be to XXXX Yes. Steve, XXXX. being made more Should you initially to out Or fully you point point I about expect there? The now? XXXX, be guess much added that's contemplated. do to the members, kind think class you of over you would building XXX,XXX based there than

Steve Sell

of more lot Sean, our Day context a you we'll end the Investor month. give at at the

when of class that million, we that. could them that we're than geography combination on partners, that's year. larger is out we to it push partners did you we 'XX of going you of but could get be where are have think said it's about composite additional that markets that, And be the be letters $XXX to I could year, think new right? same that intent could doing as we into new least at I and coming it last there The of could with class put a a what

So in this they the class go out 'XX. case, would to

into about maybe additional but really There an of be this. I that. is try XXXX. talked estimate some way also do some We the we within X of gets But on some that's is potentially partners implementation smart with -- kind the some of membership those faster to period, technologies, the there about, that of

what on of Day for it. think could we'll But I the update the at at it. on you we're class So positive be pretty opportunity the month our end Investor the and

Operator

comes Hill Deutsche George Bank. Our question from from next

George Hill

probably preamble. at 'XX, if long just you it lives. the Yes. of think again, Lexington Pennsylvania, it looks signed could for the with XX,XXX And class many XX,XXX I guys you little as be because this of like XX,XXX. contribute if Steven, have look bit FCP averages a in answered question like already I apply you to looks MA that national clinic, as But a will what got

push on market you is be of kind could You said of ramp question my then off? and when growth what for do probably class I too cut is, a over size [indiscernible], big 'XX kind And 'XX? [XX]. people follow-up the into 'XX of guess end you to

Steve Sell

FPC of They at talk they're to and have Central they those FPC. case to we Pennsylvania. And month. for back years is, state right. when Well, partners an to later Well, whatever so really and region to And the class the I of George, largest for make groups wasn't this the it few out. them. thanks excited came group. for X put are 'XX reason, and in value phenomenon at which the of wanted previously. of we'll We've And first, strong was say, agilon on in the care others, question. an mean, class a existing end partner let independent you them. are Investor talked the or We'll how the and We're the is emblematic to me Day move they're partners talked the primary great out we do outstanding the That's fulsomely FPC Lexington group about of this releases of then they in -- both our them

really multi-specialty Clinic is in Lexington largest then multi-specialty And Central Kentucky. group oldest phenomenal a

we to they of 'XX. And 'XX push period on we we about. to And class the from implementation them bring we've so we're instead of that as them class mutually, group well. as a agreed And them have of the into the excited a go talked were longer got

So we'll of at the month. talk about it end the

or of starting can 'XX, approaching great next I talked folks in are to get month and that going long We that so have in point into probably period another class so, which the that you push that runway it's about.

George Hill

Day. hold We'll up for Analyst Okay. the

Operator

from Our next Blair. William Ryan comes Daniels from question

Ryan Daniels

announcement. looking want were the a Congrats on margins. data interesting of on They your lot but again medical to I cohort. X year in, Tim, on hone comments at the

starting operational of higher to is so those then more like I'm or to second, kind what curious year X So do how that a it if the second cohort do that's you value And the due as year move with a rapid contrasts better may you think performance that and ago? us to at into could have speed more year on X or give color implementation, you looked to any of metrics? point

Tim Bensley

Yes. No, question. great that's a

year's a I can we you this. I year we'll X about can you, just last data But move out even performance consistent talking it year think look time. we about our cohorts cohort was Yes, we on data, -- update Investor has to back again, across I through the see -- information a move you'll refer month that. as market a Steve if put get even Day, as our the in been you better plus cohort at ago, mean, think at on you

least couple faster each of think, in last kind higher pickup. don't a So just been we're same forward. not in really point. necessarily the seeing years, seeing they guess, I as hasn't move We're progression, at now, it starting right I a of that cohort

in consistently $XX $XX we've been to I that think range.

year maturation you we're important the More on walked when the year of that as thing quickly we as is that in last and year and we move X. PMPM. showed and medical year to mid-XXXs pushing getting by even markets into into already year up are $XXX X year and and getting you X $XXX from X kind the analysis folks And moving cohort those margin up through medical they're we margin range, $XX between important, they up start the in numbers curve $XX, more quickly somebody the

think a necessarily So it's I point. higher starting don't

with in X I is quickly those because up physician tremendous and out and getting ability are execution ramp-up the of that compliance that to tremendous market, and basically, markets quality our it -- programs getting And variability mature our we're of cost We're quality in system. just ramp our and think clinical they year up X. as the out. coming is year driving

Operator

Our next question comes Jefferies. from from Brian Tanquilut

Brian Tanquilut

Tim, EBITDA question just on the to flow quick cash a conversion.

outlook as into this well? we EBITDA a flows obviously, cash strong growth. But how and about next be So year year in thinking should

Tim Bensley

Yes.

is risk our of we cash to the couple is a settle typically EBITDA. our behind are just of EBITDA up our One pools the one these payers happens And reporting that for means And is going getting things. things the time well in flow our reason the lag So that is actually the of EBITDA. how kind and thing that here for that the the larger performance cash larger markets. we're with we're investing is second the of we timing

until cash so that year or revenue or any And year the year. as that going obviously, get well. up actually any expense And X I'm for that don't market sorry, implementing is we following

seeing cash flow So kind EBITDA. typically, we're seeing of lag we're

cat to come EBITDA would we than same pickup XXXX. XXXX, So flow we a is expect significant that year-over-year in a flow significantly by our the of cash fact cash significant those portion factors. by did improvement And will in certainly for -- more driven gain XXXX, in see from instance, we had year-over-year, the

Operator

BTIG. comes David question from next of Our Larsen

David Larsen

be final practices talk any RADV will the with rule like base physician to all of rate about me your need It having you basically the around Can notice? you seems conversations or might assistance the networks. driving implementing helpful. can demand some for be and or they and coding not? up narrow of your terms would like platform that thoughts there effective Is get Just in restricted

Steve Sell

conversation Florida. regulatory I'll this of is be the how is and the even we're that environment say And just can And and the kind it with perform heart going Yes. take weekend, discussion. of in really that acceleration value question. of the how David, XXX physicians and at better we together really to appreciate increasing advantage of

I that from opportunity just So perform saying we're we better us, can think value. on a for

We'll make We will a that from good job we We've very coding continue high to do closely to perspective. have date. to that. work with sure them done a very accuracy

And them walk constantly at so through make improvements. things that we're right we're the how looking We'll want that weekend. all They doing can make sure to this we ways.

goes the $XXX medical of about back that I'm to power margin be invested these think million you of of in in talking about practices. what XXXX, -- If half roughly

tremendous but them, sure just communities, things we're catalyst in so doing their way. to And that it's smart really for a catalyst want we make a tremendous for

notice. not then obviously, out So that And We're find market. because notice. part it's from is a we'll the that like. what them a advanced that month it's And final of by impact key to that. looks different in talking but what it's

looks that around then see adjust we plans like. as preliminary make we'll So what final and that

Operator

from Our question Goldman from next Jamie comes Sachs. Perse

Jamie Perse

follow necessary bit accelerating as expected to to a over just you to scale more? already think support accelerating wanted beyond. investments I these were investments higher growth, XXXX you Just place? up and on them infrastructure than profitability in about due cost what And to little elaborate are or we Can said platform on the think those should what's

Tim Bensley

our I we Yes. another see get XXX basis model platform I move with of leverage part think I talked support improvement to costs. And expect year-over-year down of that mean, think leverage all, more points, we about, see as -- obviously that platform getting we by is I and cost platform of our how percentage than as costs a think out I forward. revenue we're support continue to works. to first support a big of against ability again, XXXX for really mean overall pleased was

support first And forecast. quarters. class see that And the have the platforms this the large quarters step did very in. we to up the level opportunity to QX, higher it across you spend of absolute versus in look XXXX really QX when of X you kind Specifically in was and coming of

and kind do proactively able of technology our to infrastructure things for we're instance. like data increase storage, So

us things that our scale So we to really to XXXX business put these of would get a were do time. board kinds essentially over in to huge that able and a put position class in position of us on

get good continue of out anything forward do of indicative a we're other I it's going to than think position don't I that. leverage great costs, So but think we'll support platform to in

a course, direct bit QX, little we're one that do contracting higher the is have able did offset flow increase. Now of EBITDA we in to that of reasons through that

Steve Sell

just if to Jamie, that. can add And I

are macro the business is just a we think variety our of ways. investing in heavily I in

are the we think I solution there. out

I think lead. we have a

to are and We trying a lead. that of frankly, period dislocation in invest advance

the part are terms of when for have lot daily better escalated a entry costs, in of And that has in class, amount to dramatically getting things much a platform you so talked taking partners quality the larger in costs front of we is meaningful about key we the that and do our data it. and a help basis geo Tim step-up a technology, of to cost that on that support around providing talked about. The

that's just class the a double a investment. the function of size, Now but that's substantial

we about. acquisition that this then talked And

our partners do to that to So a in are a patients. attract their variety really other ways, to things we lead and are and trying extend position of other their doctors put communities going in in

Operator

Whit Mayo Securities. comes from of next Bravo Our question

WhitMayo

do you in if changes initiatives systems some maybe patient It's making with the to anything And just that you're you guys any plans that They getting you? huge your the as are of attribution to growth membership plans well. incentives you. of are match with process. matching alongside better obviously new the I or Tim, with materiality ensure this was the in front wondering the just find given have

Steve Sell

So Steve. this in on I it's Whit, chime can one.

time We are plans right our lot a spending with now. of

team a We with phone really we are on Humana accelerate that National have goal to on the Monday the collectively period.

there's not as retroactivity. much So

between around that. mix saying, do a earlier. Obviously, we you shift, about to there's When what plans. do And like us more so have both are need work talked you of

It's of going on of process. And what data. it's say, it's so make happens. that lot of that's a it's lot to I would a lot a logic, work

on this going table still stakes great just a given kind of But some got working of with this it. some it's the business. There's those And through retroactivity we're be shifts. in quarter, first relationship we've plans, of and to magnitude the

Tim Bensley

of would our strength that's and anything new, groups. our provider think to our I I the payers to No, both doing be we're a strengths fair. of Yes. I don't partnerships, that the say and bring model with we that with that, continues but one think

of for a really process logic model HMO good to the obviously, to mix our essentially we to Our that and attribution actually have to but it's easy -- work. for PPO be able do have something membership, makes significant do membership ability for that is that

lot anything makes new, but So I us for with payers our bringing with payers necessarily we core wouldn't expertise doing to these we're that it on. have easier really we're that national to new a say and both ability regional the all of that sort leverage expand

Operator

Our Draper next question comes from Sandy from Guggenheim.

Sandy Draper

is going stepping the see lot the of a It there. geography, wasn't to those comments A sort quarter, for X off. to the growth this a pipeline, the and onetime, for on just fall of questions to -- fair up that beyond, sort to the seems assume is support just and not like the going follow-up in been same strength maybe costs asked and platform outlook long-term new it necessarily of but given the level about answered, 'XX visibility of because we're we're we're have

make want right. sure thinking Just that to about I'm

Tim Bensley

Yes.

kind top of run on to of and side. performance of couple XXXX up get particularly the of jump start I'd a platform of the had platform and in side -- the cost answer rate. both opportunity, that direct ramp-up strong support support ways. a On sort contracting it advance So on of costs XXXX sort had M&A we specifically, we after the

So lot our heavily support with new to a run is markets line our rate a is that that forecast fact as more lot the what And members. quarter 'XX the influenced in is XX-unit of platform would heavily platforms we go bringing into that's fourth we're of be. expect in we increases by -- cost on

a reduction sense. revenue. in of a getting significant percentage So But as cost that support makes platform still

out still of So getting it. leverage

on when a basis we member $XXX say we're on costs, to stay spend good lifetime like $XXX range membership to margin really we medical consider the off range. per network value of On good continues the considering $XXX on to the phenomenally payback we're and and retention And that a that that member getting generating quick that be and the membership. very have new that of bring that and the to to $XXX implementation we with going in getting a contribution

of XX, go something to X. acquisition like costs. to to a going customer XX value lifetime get We're to ratio

in like went twice is over really XXXX primarily a beginning were big So year new now implementing. I year positive. XX,XXX. having many implementation we as we XXXX. pickup of of that members this really The at XXX,XXX the really, The that factor is we a members had live that costs implemented before class mean in fact

we for platform to our in can all in early the and at a today right? just us our We're increase just still that to member, and I number. really margin mean, we future. hit with a Getting able both generating -- investment the per projections EBITDA that So as will that members cost a puts membership day medical good many bigger obviously, all shape long, better be membership make embedded those as margin on

Operator

Wells And Baxter our from of final comes Fargo. question Stephen

Stephen Baxter

larger a inclusive your environment could not change target. more model risk a progression the the in margin too of average you long-term detail about to risk to that's but hoping margins talk annual that your margin than implied headwind, was little harp that in to challenging on I greater size manage alone reach expansion ability guidance it model EBITDA is much, and rate you

this understand in bigger to trying why the just a I'm you final absent XXXX mitigation of would in So setback for it rule. kind be some

Steve Sell

was X% those It's I reason about. my it's to talked manageable. is that range. that Stephen levers you think And the I So headline in

fact members a doubling we far from are more our you 'XX, membership told So platform the would that's have to year on getting greater we than MA that earlier, the 'XX ago.

Medicare by of of quality, total beginning basis in and complex research rollout getting of we're care, go year-over-year we're I list the patients, maturation on where that. much that's Advantage at terms the cost And of better down sort a driven on national diabetes then earlier clinical of better XX% the cited than programs, better the that

that be And And so benefits discussion of every be been a that, I'm of counting side. couple anything dialogue there last adjustments going year. years on we happen on with has -- benefit the and that not this There's even -- could have could lot have about on benefits. plans we that might increasing that year

we And reduce normal places it there depending where upon of some hey, market, benefits. the and be But are a tune could cycle. about, those it's pretty

think that And the level, dollar about being period drive adjusted implementation so having lot. dilutive each I at incremental EBITDA really about, think -- markets and there a starting potentially if able the by year we then that better a point X we're to you talked helps

Operator

I to And no management would questions. call to closing the back are there hand for team like further remarks. the any

Steve Sell

our the of about And to seeing end 'XX New month We're and here our forward performance Investor in of you obviously the at in 'XX excited look ahead at Day what's 'XX. and we York. in all

going be think great I it's to a discussion.

see So then. you

Operator

call. joining. This concludes for everyone, Thank today's you,

now disconnect. You may

agilon health (AGL) 1 Mar 222022 Q4 Earnings call transcript