Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone, and welcome to the P3 Health Partners First Quarter Results Conference Call. Currently, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, this conference call is being recorded.

I will now turn the call over to Karen Blomquist, Vice President, Investor Relations of P3. ahead. go Please

Karen Blomquist

and operator, for us joining Thank thank today. you, you

forward-looking with Before made would are financial US outlook the regarding like targets. including proceed Securities during under laws, Federal to call and statements I our certain call, we statements the that remind this long-term statements everyone

financial projections of predictions believe and events financial materially These that we These present only based or subject and on future and forward-looking to statements expectations. results our historical from cause uncertainties about solely affect condition our statements are that business may experience are differ operations. actual are current and expectations and risks to results trends could

contained SEC. Additional could differ actual information statements to factors reports results cause that filed with our in periodic call the made concerning is from on this

forward-looking forward-looking during made date or and the as call, to undertakes only statements. revise hereof speak update statements The obligation no company the of the this

to non-GAAP or call. will superior We substitute prepared on of in financial to a measures in this non-GAAP measures These GAAP. financial certain to not with are performance refer addition and accordance financial measures

There of are to related use these a non-GAAP measures. limitations of financial the number

calculate is the to the non-GAAP filings, release website. these earnings similarly companies press of measures call in Partners we and differently. contained measures Investors financial on be may to Refer financial non-GAAP which For SEC this accessed other for in Health today measures. our Information from presented PX a example, comparable directly page the issued GAAP our may our of of appendix titled release reconciliation the most

Co-Founder over call turn and now will to Dr. the Abdou, PX. I of CEO

Sherif Abdou

our how am to performance I off kick everyone. over today the of by would proud saying and us period. achievement and Good its last like I team afternoon,

delivered. heard we of me committed to have have we've model believe to impressive saying on and number profitability very investors a that validate would the we we before, deliver As metrics our you

show and we will our we very in business momentum second model optimistic results how overall tracking XXXX Our quarter toward are our the feeling are and that we in great performance. have confident and

EBITDA This range we're improved loss million. all to that from our to guidance the updated $XX of the XXXX our Today, class of of sharing will today guidance that. million $XX and $XX full-year of $XX data to business confidence prior updating the range reflects of million in profitability we are million performance validate adjusted an

past, Health is As I've in in the year inflexion shared with an lives. XXXX you PX Partners'

persistent before. that We had significant lives have we've of never number a

first the trajectory And serving as metric of that lives a important future of the XX% that model. step our profitability are and our demonstrating For more time, we today we to persistent. first clearly is are believe

year $X.XX last first overall up improved to population quarter. X.X%, PMPM by had from PMPM this The quarter $XXX funding

Our quarter view PX with point medical is which $XX consistent The we for as data with and and margin percentage model. million. XX.X%, for guidance public the peers was other validating was the medical a our this margin

give that by tip over point member again. that funding we distance Our threshold. where PMPM. month. our swing operating $XX cross this, the will bridge. is that per once key It expense, And point approaching context do us and note to that quickly reach profitability pendulum help was about The network our million. That to of improved contribution will per important just $XX a to network we $XX you We we're is contribution that that exceeds to

PMPM. continue by over costs medical again, to do profitability. $XX our improved If will cross We we that we into

the our ratio. improving about medical we're that and see cost health the pulling. important improving population, it's It's the for us funding to So, of the improving all levers

EBITDA million $X.X prior $XX.X million very QX million adjusted showed quarter. of in strong XXXX a loss PMPM costs do of adjusted of with Included in basis. the we improvement is $XX $X $XXX on PMPM going-forward a a Our improvement loss a $XX expect not in fourth Adjusted EBITDA of to approximately was PMPM loss of quarter to the an compared XXXX. loss that in EBITDA PMPM, a the compared of

newer have markets, we our quickly. scaled In up

of feeling confident a had in and we and year moving demand are growth serve, We optimistic of Oregon a California increase has rest first opportunities all and insignificant of growth about profitability what of is positive loss seeing. robust EBITDA. an the noticed the pipeline very about in we're example, Across full toward our the the and XXXX. very markets we quarter. this we're and quickly for adjusted extreme a confident

In strong. is performance Arizona, our

program, had focus recognition some is color We will which as quality always you, the diabetic haemoglobin on our the plus serve. on That us and AXc and prevention the for provide I'll made clear Bacchus, we from quality market give example. is recently full and later. Dr. in -- leader Our received CDC an focus

and validate in right profitability. With we believe where these of are XXXX are track a with are year is committed that our right the that we our model. EBITDA, an to the organization, to and $XXX PX When data on PX material very way and on in we the the we realizing the we achieve in in are right results, cohort have population indebted a that our that. I model and right about believe well think million results, to solid the space, team, model we where points are deliver is to business we the the first quarter inherent reflection as

benchmarking to leave revenue of I billion some they When currently that comparing valuation. our extensive which our level, We have have have peers, results spot are this. similar public $XX you on. analysis, direct with done we financial will

to building, our our is positive you executing quarter with Our second and plan in expect we're more news, momentum I share results.

the to now Atul turn CFO. to like Kalaru, I'd call over

Atul Kavthekar

how and today start in everyone. we guidance and by for The lives with progressing turn I'll were in full-year higher Top which good our revenue results what $XXX profitability anticipated are line $XXX profitability. quarter providing capitated our Thank towards on meeting platform, and afternoon, detail persistent first of total you, we in a of XXXX. million achieved quarter, revenue revenue around of mix improves includes Sherif first and million. the strong, the capitated

In the first quarter improvements and strong in XXXX, of quarter. contribution margin we the medical both in had network

deducted, Our medical $XXX, million prior margin, to are which on over revenue capitation or the a period after PMPM claims represents $XX the earned from amounts medical year improved basis.

critical a over the clear profitability we believe these work We reaching towards are progress $XX.X making to view points, as which medical network as the define that contribution, data we expenses, give early year XXXX. of by trends million. in XXX% two improved Network margin-less in we the

in adjusted $X million of compared the costs quarter we EBITDA, big Adjusted loss the approximately EBITDA go-forward in first that to XXXX, the of $XX is expect million, QX loss Included improvement quarter. $XX.X a million prior XXXX basis. in was don't the a in on

than adjusted that begin show XXXX line our as is the quarter. straight anticipate significant line mentioned and midyear the spread the QX true-ups for will in quarter I and operational of on And with we efficiencies improvement, expectations benefits rather to from a last third see to as The a results. EBITDA, we contour the create receive second call,

colder into seasonality second fourth third, and and We and as meaningful to still see expect into see some flu the move the than as will said, we softer That over QX. months season. we quarter the be QX expect cold a should slightly improvement

prior as in compared in Our the of the by SG&A, in revenue. improved year in XXX first the percentage improvement to a XX% the net same to basis loss quarter period XXXX part due of point

For normalized unencumbered we the in these the go-forward continue run to rate year, platform by of costs taper second to present more expect exit and remainder quarter expenses a get the QX. we to as

We cash XXXX, started second the million. $XX with of of quarter balance a

to QX the April. the not funds XX, reflected transfer announced of which of in raise, this week received timing of the the capital Although from first in March the is on due we were financials

than with of adequate end operate more significantly our prior For reach expect we to year than year, to and cash cash we cash the be burn will flow. the year the positive remainder we lower until the

we the we now liquidity even are our to now are and capital focused on put raise really are from better rest about concerns a on The we than great We call. myopically where operational feeling did last liquidity perspective, excellence.

As QX be be the EBITDA to $XX We the XXXX. adjusted a XXXX I'm about I billion I good to to now $XX loss million are guidance to want compared billion and feeling to for and to $XX of and million remind loss you of today million really mid-May, of sit prior XXXX here $XX a guidance in guidance. increasing between $X.X revenue our guidance still of expect million. $X.XX we

$XXX expecting the are margin of be we million. range that million In $XXX addition to XXXX to medical to in in our

that you the turn your to of you once the interest I'll call able for give example with curve in are to who over how all bend an Dr. will Thank again we cost the at Bacchus QX. story. PX And

Amir Bacchus

Good afternoon. Atul. Thanks

been documentation, stronger winning through access provider last of better align we EMRs mentioned, delivering have year to to incentives care, perspective. Sherif from in visits, this that markets quality and improve we patient outcomes their and able are utilization. better patient the As our to serve of the we providers in year, for both quarter the From both first and

to our margin market fully teams seeing we're encompass it company-wide. takes to value-based previously. and the XX why improvement and happy brings. anytime engaged model persistent on we I'm positions in is that precisely discussed providers This to we patients engagement As the care more significant provider have calls, care the previous The converts months each approximately become with XX is than in medical value paramount that to their report

patient care we through engagement others been department results their improve by high-risk, the emergency XXXX, able utilizing on cohort or XXXX care. the XX%. utilization on reducing admissions our care equally population, is have provider By high-cost improve managers, to team, only engagement not to But significantly our hospital to important from patients important, navigators, both and engage is and

which earlier. recognized we how allow and by we Key at who monitor seen in to a them Sherif improvement their our For risk technologies risk care like our Connect of to condition, the understand Care tool, XX% is have our stratification is us control why described journey. diabetic as tool CDC population, through this were

improvement or is patients to meaningful population in point for both team our high-cost the $XX ratio, we better relationships improved see medical savings providers To high-risk, options. XX.X% a of leading and via care push support a with this their as enabling data million. saw both Success of and cost striving almost further, it them

turn Q&A. Sherif that, With over to back before the I we begin will call

Sherif Abdou

Thanks Amir.

have just investors hard PMPM improved that to our will promises That's Q&A, kit that we I and quarter to on to Before per we into about work funding wanted improving XXXX. quarter shareholders the X.X% $XXX first our we you $XXX member all year from improvement. go first per and last remind that month

our promised and improve margin. have We to medical committed

we medical we XXXX cost had was did about medical of quarter XX% $XXX per quarter We we per $XX from PMPM. revenue. XX.X% And it. XX% our margin And XXXX. as promised margin promised XXXX month. from we first increased to First That constituted XX% to first quarter it is member ratio improved the said

And network per network or $XX the per of contribution first than first contribution member year million year X.X% or million $X.X we X.X%. promised, quarter as that's $XX PMPM revenue. it's quarter, $XX more This was positive month, last doubled

the our that increased EBITDA year for that operation of all confidence mentioned of why this we and our health the have as population is in we earlier. our fundamentals and performance and guidance I improvement That the

With for open question answer. Operator? that, to going we're and

Operator

Lake Capital comes with Instructions] O'Neil [Operator Brooks Please Today's first you. ahead. Markets. go Street Thank question from

Brooks O'Neil

between you EBITDA juggling couple is just I'm this but calls, that time? a at I'm the in apologize. confidence raise I afternoon. guidance the specifically it gives curious to of opinion what Good your adjusted

Atul Kavthekar

and Look, Thanks We on of a efforts question. some Atul. are cost think is events I feel are Sherif there's the We is in worked this reduction coming about where about feel good of teams. think combination Brooks, being and Well, good in. them for that the hopper I by all. touched on the revenue the the

some really reductions expenses good expected through the about already have to are of operating we that come come and feel that And in through.

things where good feel combined are. where those So, and anticipate think about we we of all initially set guidance to we where compared we really our just I

Brooks O'Neil

you'd transition shrinking to to lot in growing to Great. the PX the interest characterize value-based from And of or care about then growth working As a if industry to you improve I'm with to the the slow the members. marketplace obviously payers of performance and there's care could say various deliver of how cohorts. value-based your this buzz the you providers interest care? curious see then enrollment the year taken steps just in importance in in you value-based have

Sherif Abdou

you Brooks, Thank this Great is much. Sherif. question. very

growing in services So, the and excessive definitely both business our providers. intense demand payers engagement our growing our and from in and

that So that's gives the confidence. us why

within will We over or have lives grateful saving into our have we're convert to from our a platform this year. almost sight clear year on full-risk And and growth that we line of fee-for-service our XXX,XXX model that next share either time. we

So we're seeing increased providers. increased and exponentially from payers demand demand

Amir Bacchus

I is Brooks, in way. the would value-based Amir. because add, primarily, whole getting yes, interested is trend providers also headed this providers, From care more are that

to them for looking do align have to things And people to sell don't that be it that people better we ask because So They in for their have what can of practice. successful. with do they're that's do the money a teams drive we of don't to easy to way that them do. performance. them to very They enable

So enablement care driving because more of value-based these is that very fee-for-service into strong. and very, the practices

Brooks O'Neil

sense Makes me. to

like life that more but how it's environment little the a Let COVID an bit to I'll me is an it environment old you end characterize of jump say, ask normal. which influenced, from COVID, question just then at a we returning going back ago rearview now would was seems queue. let's strongly and and the the in the of mirror in in COVID to Obviously, put news impact by one year

Sherif Abdou

in lot little more I things things think, in adjust. all had telemedicine a the whether And I practice or that. worked. how bit to and us us those an even And fee-for-service independent access a has created to improve everybody to drive we to how think It's need group taught from regards medicine that large drive. we COVID be So we to like practitioner a have nimble you're

now recognizes I that Yes, in XX be on well are the it's very, to we'll good government be May as seeing regards see Also stopping. very the hospitals downturn. of that much is but due cases that potential we'll understanding surcharge to some still really we a small. to getting, COVID very the as reduction really mean, with which

So, those like patients of turn to patients all face-to-face visits things companies more that most that create value for our not physicians especially those continue ours to prefer. senior only allows

for it be potential be more down, everyone. again to has similar how in going in taught it's COVID with So manage us future. a good with we prudent thing But patients may any disease the that

Brooks O'Neil

for progress much excited Thank very you the the questions my and all about making. I’m taking you’re

Sherif Abdou

Thanks, Brook.

Operator

our comes question Daniels Please Ryan go from you. Thank And William of ahead. today next Blair.

Ryan Daniels

broader upfront on guys. the and some EBITDA Yes, strong uptick. for start guidance and then the the couple the taking year Congrats questions. Thanks housekeeping of A ones. to

First for the off, platform have period lives of the do you the just of on the our number end models? at

Atul Kavthekar

on Yes. lives, at have platform. The that at-risk risk full we XX,XXX the

Ryan Daniels

just first really to that in cost one-time $X and the discussed their you reductions to of any the into is then half in be due that then the period, operating quarter during of expense the Was some million subsequent appeared you won't second or started place back a the quarter hit quarters. And of that Perfect. that put stride Okay. year? cost in the in reflection in the carrying

Sherif Abdou

just latter. as made based expenses contractual EBITDA. number. the the mean or burning characterize to $X either And we are we've I a out. the conservative not that going number. would potentially they're But just in They're really Yes, a repeat. changes million decisions good that quarter's call on it's also It's these that know I are first

expenses. We working and about on forward. it talking really operating feel good I high going single-digit We've been intend company about we to again. I talked expenses the continue think saying really platform for

take certainly so And couple really shape the we expect next that to of over quarters. see

Ryan Daniels

curious ramping double-click of Okay. bit mentioned, Perfect. impressive. us you more pretty into could programs driving notable what's numbers dive some new color base. one know then is some the on you maturity I clinical that little margin just don't and markets, and of maybe give medical deeper really performance I'm And effectively a The if that. patient on the the in here. if it's

that pretty obviously bodes very well it Just what's improvement? that profitability. path a the Is continues And that? remarkable driving if to for

there. get So more I want color to some

Amir Bacchus

actually combination Sure, factors Ryan. lot It's a of of a those that described. just you

model improve improve time how our whole an is how education the the they documentation as charting in and improve same and Our revenue to geared get from so we at towards quality our number. care understanding can of in model to front standpoint, drive their providers

we that, and managers, cost et with also cetera, working on those work them of care risk. high a addition are teams, to directly have navigator that with In lot our high patients

that that especially XX%. on therefore, able So, to medical cost expenditure we're drop top

drive obviously, expenditure. those the and lift at So things together, time medical down revenue overall the same the

educate continue while we practices in you little really number get do, XX work see the as it So a you start are, the patient of But lives for our on it overall to you important. more to their to can have them the XX groove turn. with And providers persistent they therefore, with as earlier The really a I takes once care. longer very said improve and and to about you, months.

ability So you over see less diagnostic expenditures time. and improve

So of drive to factors results. said it's overall kind you all like the together these work

Ryan Daniels

the opportunity just and could any on it's if like lot to A that you've of in analysis But how notice the material if all? on rate thoughts potentially a organization just risk at space. in XXXX more impact impact you're the maybe markets to not given Medicare changes the could, seems Thanks. adjustment. have It and hit I providers just done, Advantage that. one, then to quick And you the one about giving talked the rate the

Amir Bacchus

Look, lot can Yeah. important stress, different as is an imagine think to it a where And ways. companies area think analyzing. I spend of to time analysts I this also you affect going and reviewing in our different is

business, components a and there's company, There's rebasing to For component our two there's offset our they it. particular another. an HCC for largely component, one

expect the position impact mentioned do the We think same. call, Sherif I our believe as material the not on business. I So remains on last any

Ryan Daniels

so the Appreciate Thanks on much and and perfect. it. progress. congrats strong Okay, performance

Amir Bacchus

you. Thank

Operator

ahead. next Research. question Josh And Nephron Please our comes Raskin today from of go

Josh Raskin

number The maybe growth development from there Hi, causes of feel And and some curious thanks. so, then there just you and if in was growth market provider what about and about was just flat determinations. that and pipeline? and affiliate providers And if of afternoon. terminations Good I'm broadly you could some XQ. then how sort more relations if talk

Sherif Abdou

Yeah.

So great. very Josh, much. you thank

you're either provider medical and number part them. the in of in. numbers bringing same of provider the goodbye providers maturation and of the new concentration We've population we our to with said that including or existing patient some and of with moving a the the population, have letting margin the So improvement significant and added right. the Atul And Amir and population mentioned providers increasing relationship it's to the the the

us in the before So have of we non-profitable nonproductive and what like significant time and responsible increase experienced populations to led time and the and also our purposeful have last said providers, but a providers. we terminate relationships some growth our we

Josh Raskin

maybe think some to you typically you that patients expect some in Is typically you X,XXX about as process? think XX% you January and seasonality this grow lost So there ads, I is Jan why MA the because well effect, can that's XX% with that to still year. would a juxtaposed which X but that more

Sherif Abdou

after annual so following year plans is with you you effect recently which days open last basically the change if and takes having enrollment and Medicare January started Definitely can desire. XX for Yes. the that X/X enrollment,

our we with add membership having are of a our into Josh, effort, So realigning providers. go the provider where can putting partners to lot we the plan and enhance new partner increase without

with with have Anthem Cigna have Humana, I and Smith Dr. Humana I that only United, Aetna them, So Centene, them. lives basically and

that providers. So is within our the growth of lot is a same

this year bullish So our next very and we year. in growth in continue

Josh Raskin

something of me. we Is that expecting. for little was helpful. And a remarks That's that some well revenue, PMPM the as more than coding bit mentioned you your lot and in just were The that like Is effectiveness? as then there capitated last membership, or one mix the a well? persistence more, prepared issue is up it or or

Sherif Abdou

above of had persisting XX,XXX coating are compliance the many our it's our and integrity XX,XXX time last our or of the So mostly that almost the we've that of year lives process in never first the mentioned, year, I lives XX% this of persistent. and to as have were from all for lives we to

last hard mainly that So year. our team that work did and persistence the

Josh Raskin

Okay, perfect. Thanks.

Operator

Taylor [Operator Instructions] from next question ahead. Please comes Gary Our at go Cowen.

Gary Taylor

two Hi, good had afternoon. I questions.

of I a guess The a knit first any to a EBITDA, PDR that's one million the that's more on just but think, in that? excluded I I know charge little the specific bit but there quarter $X from detail Is related contract?

Sherif Abdou

Gary? could sorry you I the repeat hear didn't I'm question quite you.

Gary Taylor

excluded $X related The single know I it's EBITDA just is that's color any -- contract, a just the from deficiency that quarter is that? or on charge premium million to in there but specific Yeah.

Sherif Abdou

requirement as claims This do you estimate is look just it's premiums. contract. to any item is non-cash exceeding No, can of related unknown a a GAAP an we is and imagine. a of reflecting at -- we it's take What not this sort specific

reverse taking doing profitable. are we look essentially a just how our around way policy at become that by We when general expect We calculation. to are the that we that do

So this thing. a is temporary

year by is I think expect next about over. it the early the think reverse the I or of all way end I it year very to

Gary Taylor

throughout than the loss little very that's year. three one, or a the expecting EBITDA before the different couple second you over XQ. has improvement off so last in the years it just Okay. on elaborate My comes bit generally the in the little loss a you're seasonality quarters -- accelerated the of next sequential bit MLR EBITDA can But

bit to better. So that understand expectation just a little wanted

Sherif Abdou

them Last much And the about challenges mean next the me we over I as -- quarters. the also a more we something Well, midyear I particularly we think the year, for lot way consulting more much manage is revenues we complicated in think as that around. that the basis. our I more sweeps that up, bottom accrue few expectations do prior coming that talked of I expect effectively a operating benefit expecting couple if about I it We second think on from third year, the P&L cash are the quarters of around in we audit of flow expect forward the to think fees consistency think do and with unlike the way and of and excuse matters, much final see a revenue account we some and but predictable predictability that next the I expense quarters. with in the mean the you

when so I what that's really talked the that's And about contour reflective of.

Gary Taylor

Okay. Thank you.

Operator

Abdou this remarks. gentlemen, turn Sherif for over the closing to back and conference like Dr. concludes to I'd Ladies our session. question-and-answer

Sherif Abdou

Rocco. very Thank much, Great. you

to I very with share excited as we're results confident those So you. mentioned, results. our on We're

committed Our growth And healthcare moved remained transforming a our risk very our more upside and committed robust. purposeful remains we're our this smart the so our our of And we that just want vision or as turned very finally, from full into I and platform of to tell you in I some into mission. of to positive part growth. that to as to Josh, an membership mentioned

I and next to very want you much With all we're you we while to talk thank doing well importantly, quarter. to good. continue do More that,

Operator

thank Thank for today's concludes you you. conference This presentation. today's attending We call. all

disconnect lines You have may your a wonderful day. now and

P3 Health Partners (PIII) 10 May 232023 Q1 Earnings call transcript