- Earnings call transcript Q3 2022

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Operator

Good morning and welcome to Babylon’s Third Quarter 2022 Earnings Conference Call and Webcast. [Operator Instructions] Leading the call today is Dr. Ali Parsa, Founder and Chief Executive Officer and David Humphreys, Chief Financial Officer.

Before we begin, we would like to remind you that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995 and as further described at the end of the press release as posted on the company’s website. These forward-looking statements reflect Babylon’s current expectations based on the company’s beliefs, assumptions and information currently available to the company and are subject to various risks and uncertainties that could cause actual results to differ materially.

expectations any the that statements this these obligation undertakes occur believes call. revise to to Babylon are company reasonable, no after Although reflect changes to that some XX, be can XXXX on filings report the on other cause the on of section in from with factors and Factors and company’s Descriptions actual forward-looking as of found Exchange results the March the differ Risk statements Form materially these filed Commission. could Securities annual XX-F

be will evaluating of company the certain the call the that press measures Babylon’s posted note the please for ahead. of non-IFRS the Ali presentation believe slides company’s to is in that addition, measures like and financial Parsa. company’s important the Please relationship over measures I’d historical call they that, The IFRS financial to end performance. are discussing available on today’s that release turn website. to most non-IFRS In at non-IFRS on also comparable measures the reconciliation on Dr. found website. between the can are these CEO, go Details be With

Ali Parsa

which capital am the expected as key operational delivery key time on I helping to interest earnings call. some thirdly, are this including your third our progress core initiatives, us clinical key would quarter would firstly, I in progress three everyone quarter open Chief to continued capital you discussing mission; David well for and structure; will an Babylon. to details on I will our our deliver like on more to improvements. provide like Babylon’s the share financials Thank technology our delivering results. Humphreys, by welcome passing to most margin joined I questions. our Officer. and then across needs of for the secondly, metrics, update to profitability and on we themes: as our on today David update and to focus in Financial the our an our recent call quarter before And call financial

funding the sell business In of to most you some us California around There And time undertaken announced of complete They to timing previous intention provides requirements We IPA interest aware, we has are structure. As important an eliminated I of provide completed raise beyond the business an that capitalist the We through and XXXX. guidance profitability believe to of area result our for private our our and capital everyone. of that flexibility simplify November IPA. October, been for that capital transaction Meritage future on our we capital will highlight. to on the is no early the profitability fundraise capital to Babylon’s change with in for million have overall X, the funding point to Babylon’s the want warrants recent $XX were the public sale projected SPAC sale sufficient raise our our initiatives also of the profitability. company. to

Class institutional the make will allowed hold to of reasons to split done that address share not more now to are a as This Additionally, and They NYSE shares Class a of share specified the outstanding. price shares implement A our points. was A investors, for the ratio. at approval shareholder board two trade shares requirements XX:X received that Class reverse also shares B shares class shares below to to so minimum only and price or to convert are the many minimum the have attractive

the increase or We sector. capital we the cost witnessing innovative healthcare of the result weakening will current some the to the believe significant is solutions emerges Our facing Babylon that current needed of in the inevitably of in ensure challenges unfortunate focus downturn. to all out are tackle strongly market disappearance the of

already American struggling health are of accessibility innovative the projects providers the needs, some covering all remaining those incumbents. they costs. points: developed of affordability. the surveyed of pocket or high, challenges with we Nearly acquisition key insurance only or healthcare or of healthcare divisions affordability challenges the survey two in a half out amplify other been structural required economies healthcare current newer from the healthcare comprehensive that bills through most emergency and customers the In healthcare costs. of will of costs, and survey of this of are We across debt delivery, focal what and our the persistently closure private inflation stated recently macroeconomic concluded accessibility including the of observing within have put the models With X,XXX maintenance,

in our XXXX. Healthcare of than Definitive of and XX% While population, healthcare is the in older rates QX remaining and specialties workplace increasing that are physicians the approximately challenges reporting some among published U.S the the affordability of demonstrated are by up the concern XX XXX,XXX the survey XX%. surveys revealed recent of accessibility. to Meanwhile, other physicians They AAMC, MedSpace showed burnout left of accelerating

and XXXX, solution scale remain this to provided will us almost efficient that predictive, the we scale. We ago, down see turning therefore As are that and a proactive cannot our digital-first once manage at contracts. extend hospital-centric for the on we long-term can key across on that results, primary capital to including In revenue used convinced clinic healthcare. that for to to reactive and the financial credible plan dramatically and our be provided sector And across guidance improve ability believe sale individual will EBITDA. population believe both we you cost the offering. will our Medicare a observed population our and adjusted digital-first a we by the solve the pleased provide access solution costs to thinking our offering services of provide narrow our core already manage when integrated IPA will service differentiated We consensus we able data-centric, build In we Albert be same to current created. the Babylon, scalable quarter, we our our to our a by continue care health and to delivered to on to the more customer expectations commercial announce discuss not remain invest again lastly focused that focus out century means to health In problems raise have platform we funding beating to Einstein our to product with and This further further delivering a technology model we our existing bring are building can and challenges. building clients. time, digital-first our metrics, demonstrate and

since Our almost contracts. a at $XXX growth the Xx came revenue was This for our beat XXXX consensus quarter million, and driven care, which VBC growth is represents revenue on primarily in by value-based QX in estimates.

guidance $X.X strong are $X.XX from of $X a our revenue full of billion. revenue we growth, the for result XXXX year billion As continued to increasing to our over billion

us savings of remain our member’s deliver While continued driving we testament margins the is allow our a scalability which convinced platform, in extraordinary and ultimately improved growth our at our improve health to is will on of focus scale. that to increasingly record populations,

plan continued Mexico. our the a Additionally, VBC away to a to primarily This this revenue new membership XX% our commercial improve quarter of New our diversify and Medicare increase part we in to members, contract of margins. member this Medicaid by Medicare launch increase Already, in from revenue we through is goal which higher VBC potential per of quarter from added more Medicare members and came to in XX,XXX bring moving our commercial further and XXXX. and this have population revenue

value-based partner Babylon announced its enable a to that service digital-first virtual states. Access Babylon to open U.S members X in enrollment to of care launched last providing commercial This week, by excited we also primary XXXX. gatekeeper, and product, first of product a care population Ambetter Ambetter in are through that powered Health commercial our January We share be will exchange Virtual expansion

X APAC. the to the UK, Rwanda and UK, we in addition, partnership extended In additional to key with we have partnerships an expand years our Bupa September for In continued deliver across Rwanda, health AI successful pilot digital health Symptom In first million Triage Checker XX,XXX over UK checking. services with launched to public centers, customers. health $X.X an digital Bupa X in insurance we

Finally, health healthcare health their in International, digital in to a low help service we about the income communities the announced Services partnership navigate with Population Vietnam system. to informed decisions and make efficiently

revenue our to with X we margin than improvements. This Turning improvement in of not at some report much old a all medical this our programs we implemented initiatives about should results of in our that that and to more is across majority is half the pleased and intervention you the the I’d of of less give yet. reflected seen an margin medical to the our context quarter first in the our year drive that which have of in from also medical X.X%, are of are the our calls the process numbers X.X%. still population be look margins, information like implementing the or we year to plan is

indicating this future progress operational metrics, our in see to quarter margin continued have improvements. we Firstly,

rate than Xx our with continue peers. deals patients at higher of than in to up to are older We stage ever same sign Xx rates, quickly before, sign-up which patients more up newest sign our the our

areas condition particular standard ones attitude risks considers managed. models. specific members the own models high claims towards leverages will is not then ones detected Secondly, by predictor which of generate conditions the in their the included One to typical are insights high and emerging current targeting across high every prediction through if would medical which to which members we factors, of such platform, over history have our to deem We key and which for XX% targeting in we not these been costs. prediction which specific and member generate expenses. skills, this of are a actively and predict risk member’s a at our is costs, number do risk rising of are health a outcomes, prevention advanced those evaluate are who of knowledge, to health, risk we It expected deals, as way HealthIQ, outreach risk not AI

standard seen across the XX% as with to our depression in depression providing behavioral reduction of industry in among across reduction are spend healthcare spending both for is measured X by burdens overall have days claims and all access less within and health a populations, Therefore, behavioral across outreach costs. and easy anxiety we have integrated health already an appointments than rating indicator scales, services which more medical and mental leading physical our top example, drivers costs. than anxiety For health all

highly ensure continuum. healthcare also service accessible that the our throughout We members is to

in to quarter by this example, Iowa we organizations, into For launched to the Georgia, these home with workers, through meet service community-based health our bring patients local transition encourage comprehensive provided technology back a the navigate service. and home hospitals partnerships for patient community-based and engage the to with self in California, which help smoother digital patients

expanding strong are our in focus of cover all We our U.S adding before engagement services, are this on digital-first XXXX. our to in already with and care. further all cohorts retain Throughout program to seeing a expanding states members QX we

We are the engaging ensure we in developing constantly ways. platform technology accessible most our to members are

with members and For or device any our visits U.S. allowing to this and virtual solution lower basic version to care the convenient launched to fast, web asynchronously of enabled quarter example, we primary from web alternative as any schedule also time in launched ability message receive teams our a at care cost the for our specialty members care.

members e-consult specialist. a rather quarter, our through specialist of to vast needing were our referrals refer This than to brick-and-mortar platform handled majority the

continue EBITDA adjusted also this consider we are last to to XX% beat margin is margin partly adjusted million, delivered programs expectations. QX adjusted initiatives come which our now previously of It of in an as guidance efficiencies $XXX negative quarter or deliver we on of consensus due to up have the successful that EBITDA These our results, a implementation well for we improvement, from we loss year. again solid will which XX% results, our loss XXXX be scalable deliver $XXX due negative year. model of margin of a to improvement cost-cutting the these to initiatives, savings EBITDA medical expected less. with confident of drive million Turning EBITDA $XX an once the these we which to a improvements million strong on announced of implemented Based and year-on-year represents our year adjusted as to to

our they on their place to deliver mission scaled healthcare team results. hard the provide like to to call about our world that everything digital I balance investors care have model, I I confident we shown core am with Before wonderful deliver in have call a over relentless our for pass forward to that, primary more to to a quarter, first on on their handing our affordable that our like they detail With fortunate quality, the continued am need service we David, Babylon day would would be continued to to work care for with cover build the every business equity with now mission support. the everyone. structure to sheet, accessible to I to David and simplified primary commitment focus our group. first to have increased And and our and thank digital us truly over this can such David? recapitalize to everybody financial provide once high I thank work entire all drive changing also to earth. again

David Humphreys

Thank Today, improvements will a our funding. of to full the our XXXX. you, as I we’ve you I’ll quarter revenue execution the announced financial our financial Ali. our on everyone And provide of for seen path our discuss would on driving continued and for focus to third I further also financial on profitability actions. on guidance result thank results comments focusing previously Medical like reduction performance, update cost our trends to and Margin, mix, update an our share particularly joining across year in you call. on

another financial performance. which $XXX revenue of year-on-year growth strong almost million, and reported had quarter estimates. exceed We As Xx we’ve consensus of Ali revenue mentioned represents

the $X.XX billion. the year From result, an standpoint, of XXXX to announced month as discipline our forwards the our loss profitability EBITDA less guidance adjusted we’re we’ve initiatives, million business, adjusted in continued we cost like As announced EBITDA of loss for a beating previously or reduction consensus or of $XX to quarter, for sale of negative with margin $XX $X per macroeconomic billion our meet and situation. scale from our is raising FY equates which our to This $XX estimates $XX execute I’d our reflection we to on medical over we XX.X% our also actions. our placement, early This of EBITDA to margin November, to over quarter, adjusted the loss also on million million December revenue completed a million. million operational by million on guidance leverage the our ‘XX $X.X current mix, range $XXX a funding is positioning well us previously adjusted From to business. focus and briefly of the $XX through private move equivalent executed benefits continue we result which IPA less. to forecasted EBITDA and revenue proposed standpoint, comment during billion third an delivered with of

impact our factors and on business. such as monitor We the foreign exchange continue inflation, conditions to of

the Furthermore, by digital be of our the business the to nature mitigated the cash inflation from flow impact value-based structure expect our has strong care U.S. pricing a impacts largely and of dollar. first model, arrangements. benefited We

more GDP. Given private amount expenditures our our our financial detail. and a in results was recent U.S. in look placement in other to of need at headcount dollars, and We are significant

care increase our total by As revenue on million, third This and was for QX in quarter. was XXXX. is VBC QX it we for third Xx quarter, mentioned increases earlier, from $XXX third by XXXX. a membership members million base VBC of VBC $XXX our $XXX million, revenue segment, of U.S. driven VBC XX% increased been XXX,XXX which the the the value-based line our generated Top quarter revenue almost again growth in in by this which quarter-over-quarter, accounts revenue. the has and related this generated is quarter to XXXX for we driven of revenue Xx quarter the in XXX,XXX significant revenue

on two VBC QX. revenue from and to increase These digital populations. and focus XXXX, QX in our Medicare engage XX% QX proportion our QX VBC up to grew XX% first member Commercial populations in an was easier XX,XXX by continue diversifying which members of in in members higher XX,XXX in mix to XXXX, and XXXX We PMPM increasing made

This cover contract we New quarter, to Mexico XX,XXX new in launched a advantage members. Medicare

million, of beyond. We and from expect sterling, which QX in to digital this $X on roughly revenue, revenue third Licensing as our clinical contracts, in quarter decrease U.S. reflected includes which was million million from a have populations by was XX% continue XX% constant UK and of $X a as quarter denominated been for volumes XXXX. by driven services in was driven UK. currency on headwinds both of focus the first of increased basis. licensing ‘XX fee Rwanda, U.S. delivered increase and this Clinical service in consultation Medicare XXXX, quarter business pound our flat and the in would XXXX, to which Commercial is reduction are in and FY well the Services This in be our $XX our FX $XX pipeline largely third revenue virtual the an the million during

the of delivery, care clinical down between differentiates components: delivery expense cost Babylon expense, offering. Now medical in delivering break two claims service which to we costs members’ our and our incurred into expenses this and by the care

XXXX, was the VBC quarter, was the new This $XX $XXX million, in to QX an XXX,XXX claims increase of due from expense which our members in addition million year. last

and across the which contracts majority percentage as improvement of our as quarter. have context is first than within expenses VBC of a This XXXX tenure this X.X% digital first half was from of margin primarily claims VBC minus less margin, FY ‘XX medical one define that an the of of revenue driven our it’s Our X.X% an medical taken by average contracts, performance our cohort of X-year. the we

improve clinical initiatives the increased million technology We million, which was $XX expect continue in our earlier. that on to quarter, Care Delivery $XX Clinical are and Ali medical from XXXX. described driving for margins expenses the slightly based improvements as margin QX

and As care clinical this percentage in quarter with utilization of continuing more our drop to to initiatives our the network the a clinical the that of implement XX% XXXX across operating to third this from revenue quarter, care are business organization. much leverages delivery continued efficiently. due scale, deliver as we to across scales, expense able to our quarter X% to And of increase efficiency comes

progress from Combining has has delivery licensing and Due clinical was million an implementing multi-state that cost every who staffing in both example, we earnings membership, million $XX to the from previous to QX to our increased allowed care expenses For and increase and calls. expense are of value-based from licensed simultaneously our XX.X%. is our the $XXX XXXX. This grow million, multiple-states claims well XX.X% grown to with outlined delivery total increase last XX% delivery expense slightly XX% our of $XX from reduce by while at in quarter the clinicians across of revenue employment on increases quarter-over-quarter, care care percentage QX, this which expense, we utilization for decreased cost program of week. care clinicians million, a basis but $XXX our increasing year The on end to continues us volumes. percentage

a pleased of our percentage operational technology this at Turning our operational both digital see revenue to to reflecting expenses quarter, scalability, falling we’re and look SG&A costs, leverage. as and

in million are quarter $XX development technology QX third the and and increase research to $X comprised expenses platform which XXXX expenses, XXXX. application expenses, of million from and were Our of

technology to versus expense X% of of reduced expenses our XX% QX due compared total expenses in quarter quarter. a also a revenue. $XX of Similarly, which expenses significantly were of million quarter quarter of XXXX. technology, decreased XXXX XX% as While XXXX operational to increased the in XX% this percentage decreased percentage from greater a technology SG&A third SG&A to this this $XX as in have costs R&D as of revenue our result quarter just revenue the to of leverage million third our increased to

discuss EBITDA quarter to the adjusted for XXXX. on of Moving third

QX loss EBITDA million $X adjusted $XX of million, XXXX. $XX in Our loss an of adjusted was increase million from EBITDA

we we’ve generated QX savings into see of expect point a QX cutting improvements We loss QX and execution future improvement deliver leverages and continue from margin this The year when in XXXX. year-on-year. improvement XX% strong cost scale reflect of trend in this adjusted produce with operation XXXX, to have EBITDA initiatives XXXX successful profitability which compared at to the XX% begun XX% significant which a quarter presents to this savings to a quarter,

XXXX Moving September compared XX, to the million, equivalents to of as $XXX September balance sheet, million as cash was XXXX. cash and $XX of XX,

Additionally, availability to $XXX added this we our placement, to $XX received September cash on million. provides sheet X, on a from balance were of proceeds added balance aggregate when November million our in private cash XX, which

Looking to we forward this provide from placement outstanding EBITDA like or our in guidance planned our by time changes recognized, guidance for basis. you to our our million off IPA at And update to to on whether other one and end adjustments expected reserves the business less to periods I’d structure flow, our giving private will is our reporting will a These profitability year completion like our expenses, on need realized as there future and premium QX Class and and no transaction. foreign the issuer. capital requirements need of for future to application adjusted of a for shares, be of Class California of needs, on to private we’ll A have well B had XXXX under $XXX standpoint, all we to on our any for U.S. deficiency platform be This to A transition from previous This shares, XXXX. change Class to just profitability. sale U.S. reported reach a as well address sufficient no funding as capitalized transaction cash conversion and reassess an transition stage, expect requirements. our full that briefly will cash as the as as the reporting means the issuer mean amortized proceeds under outstanding. domestic GAAP. impact capital capital X shares November following and From results I’d

over updating As billion for I mentioned our $X.X earlier, revenue to full to $X billion. from billion we’re $X.XX the guidance XXXX year

reiterating adjusted We’re EBITDA guidance or our of year a the for loss less. of million $XXX

have Looking forward we X, to robust XXXX to pipeline a on mentioned, XXXX. our diversify as excited Medicare revenue our and Advantage Ali of And Ambetter we’re incredibly continuing January partnership a portfolio. commercial focused about the launch on

EBITDA care mission to possible to make forwards alongside quality affordable their I’m them this To of proud Operator. drive I’d on best cost drivers an For we and for standpoint, and loss and on. to incredibly EBITDA XXXX to a on monthly for day our adjusted driving our the less specifically, savings everyone driving towards with a focus I’m results healthcare, claims our key execution commitment exit Babylonians for continue and to operational of initiatives accessible reducing EBITDA hard loss, positive whole thank that improvements, XXXX the clinical delivered revenue team leverage, on of to including to margin margin our mix, technology and execution and adjusted $XX and proud focus and adjusted future to of work continued like financial every high adjusted EBITDA conclude, quarter. we monthly current deliver actions. continued work our expect strong members. than December their continue million our

call to ready the questions. open to We’re now

Operator

from Thank of Larsen Instructions] Please the you. your proceed with first [Operator with Our David BTIG. is questions. question line

David Larsen

to with solution And customers maybe to in first highlighted Ambetter much. have digital Are to a may commercial the you plans? very for seeking that good that Hi, – you digital to Can looks little be it very about solution? first are market a congratulations quarter. going planned talk on been platforms your being contract, you first you develop actually me contract, your Thanks planned are the the clients RFPs bit included are they a digital with?

Ali Parsa

trying described for The relies you yes. that question, all is the Ali. thank of the effective. as that model them – to is that solutions David, David, those not manage a long over this unscalable. go order to And on to current in are brick-and-mortar We time, answer I that the period believe to is people these to all their very get of health

persuade a nurses we’ve primary our to is working been first better So distributed on with go that your care way market. pocket to digital them doctor, customers in to trying always

Ambetter already that into market. will be We members product. that very think has go to this are delighted that We’re they launched to And way it. good signing now a

So, that. in those go-to-market think partners, various solution. virtual launches being first with feel about both RFPs new we and with into in the the very are included for positive we whereby healthcare members, partners entry their we or a And

David Larsen

has improved. contracts? Can the see mix And membership you a bit about you I talk little how are profile of these of approaching pricing? the gross can margin

have lives Are will guess with your able scale? for I and commercial Perhaps mix. for of negotiate it a increased mix you greater quality call new a higher we Medicare got a You to contracts. –

two, how on year year you you three, think signing? year Just margin in deals any these into one, enter about post as thoughts gross

Ali Parsa

you would that or? to take like David,

David Humphreys

you right. so mix. to revenue ahead our David, exactly our perspective, Yes. are from look We

contribution that have through much greater on for increasing won’t and We we and see very from mean certainly the contracts we seeing explore focused PMPM to our leverage, doesn’t and we to today, It the the going But ones the are continue a there. coming those profitability they make revenue us deals, with strike between on going really will targets. be can focused hitting balance with right will our are profitability where, to contribution learning bring, the our we higher pipeline Medicaid, opportunities contribution Medicare forward. where that strong commercial they we

David Larsen

just around XXX rate which $XXX PMPM that – I the in that, then drove year-over-year. and to that like maybe increased $XXX, was to PMPM think increase? Does compares up around And related Is the to rate like, think reasonable XX% I QX, bucks Okay. sound what accurate? it

David Humphreys

have they been. Yes,

live July Medicare we the New So, arrangement QX that in that live in increase – went the audit of fact key was XX,XXX that around X. have and driver Mexico, added

David Larsen

Okay. the great. cash from quickly, there any That’s IPA will you. just helpful. sale the Thank And Any of on sauce to expect be that? much business? updates very collect How you then would

David Humphreys

Yes.

look, So, everything the and to IPA. to is on plan going track relating

working really are closely interest have on exceeded that encouraged bank, stage. And top we at internal tier we a it’s of very been come in, So, expectations by that’s our the level with investment this frankly, transaction.

early us our need It gives and given from confident ranges here are the we we from profitability. looking funding So, valuation we that sources, perspective, have through to forward seen moving XXXX. a forward executing transaction the get to multiple to

David Larsen

Okay. queue. good the a back quarter. hop will Congrats I on in

David Humphreys

Thanks David. Right.

Operator

Our is from Weerasuriya line Capital. with of your Please with Berenberg proceed next question question. Dev the

Dev Weerasuriya

morning. congrats there to expenses, that Senate if internal six solid critical. particular dig get the just to change months any, a expectations say, that an year that year cohort, to Hey, Thanks. and margins, my the the terms be first first three, line around around obviously for to year, and a I you Thanks understanding will cadence in are to claim quarter. have which let’s in two, how of margin, the of medical the you helpful. good medical have want I to year sight of questions on am you taking trying of for a the expect

David Humphreys

Sure. Yes.

less digital contracts have really said margin, analysis XX Having we margin, courtroom those good So, running about recorded seen But seen always of first we in a we claims movement what contract. in is the caution that, at VBC what good QX little our months. months to-date. we have claims QX XXXX the momentum near-term in than cohort given tenure six average our of in bit ahead increasing is

Page and a margin in graph included we evolution talk materials have months. seen those X, the contracts we to XX the our that actually, of that presentation the So, over last

So, I see And our from refer are that would to certainly that. you numbers. to you X.X% of up contribution about to cohort will we QX

Dev Weerasuriya

there Medicare, And cadence Okay. Thanks. the difference may I commercial Great. and follow-up. And be guess a in then across then I populations? that margin Medicaid is want

David Humphreys

Yes.

the So, the in opportunity commercial stronger and Medicare margin see we being evolution populations.

strategy through high data we are improvements populations, technology and And are effective clinical the where addition, engaging those coming of those the beneficial operational we most both is with in is most members In margin identifying metric and risk we with that successfully members. risk see some in the our our data. high our seeing where claims initiatives

we what improvements emergency us are into in great which terms financial services where and great levels, indicators example, in evolution. of through margin for are For inpatient come and the seeing court will

Dev Weerasuriya

with have then, about in there has X for comfortable next are Ambetter confirmed? rate on, until million this guys those me. are thinking membership just end six kind bringing just hand for million are six loss run and operating and guys $XX that the about you cash $XXX about are million the what about of you of out quarter, you have investing cash, year. Are the about, membership growth. percentage at cash in new expecting lastly, it members know year? you EBITDA launching on limiting you maybe $XX operating states? this guys in And But sale is states if adjusted And early some that about curious Are that how guys Thanks. of IPA thinking That’s then of on you you Great. within contracts that is, million members, I growth Okay.

Ali Parsa

we stage the the right, is members of entirety number taking absolutely tiny fraction that Ambetter of are a you of the members. a So, Ambetter that are business

are delighted take We that we contract.

demonstrate first to managed we that digital hope There can first And with to David, would situation do take you that? with start we the scalable, cash what our become this Ambetter. more was On solution, and a as contract As of these care. we those. we know in of partner a is distributed, Ambetter now supplier, primary like performing relationship value contract another our was that with well

David Humphreys

Yes. Sure.

So, mentioned, the from $XXX a cash pipe as bucks million of situation, us to since September. process, it when you takes equivalent our

in to think out I point the we had success the cost here is program. thing key our have reduction

EBITDA of adjusted equates program coming rate. loss, see million $XX full So, to our an $XX as which are And QX, already we savings for without million a getting cost the that’s run benefit monthly we through. at

target. the to a with look rate is QX, we than run adjusted good are previously feel as lower million that we an place a EBITDA as $XX So, clearly ahead in to loss exit communicated that that we we December

I just revenue was two there think on there the a a question part growth. also around

on we is so coming focused good scalable. through first are our leverage model and right. really from see extremely perspective, significant growth, revenue digital We operational our So,

making Medicare However, when new revenue mix right I striking sure think Medicaid that in about right, terms And commercial balance the are about the talked the We important. continuing revenue growth, it’s are you that is we on making right push of us growth. on deals. sure

Dev Weerasuriya

will I on you. Thank hop queue. Great. back

Ali Parsa

Thank you.

Operator

Daniel the The questions. line proceed is Instructions] with Citi. from Please of with your [Operator question next Grosslight

Ali Parsa

Hey Daniel.

Operator

is Mr. open your line Grosslight, questions. for

Daniel Grosslight

I for was the question. Sorry, Thanks taking muted.

percent next California your be offset you Is the much update able on once are curious how California you those divested? you IPA? are than is with in you market. Do MLRs launch right You once assets XXXX, now, MLRs in able assets when – thinking the going an those what IPA are then color are And to be of your to that just will are am don’t membership better Ambetter are MLRs? any commercial commercial IPA, you commercial increase provide to divested. going to year? on see given an get about I And in selling overall get the anticipate that you Can

Ali Parsa

will or commercial will second what deal that things in that you a – the we through important in that is them The will have But is Ambetter, compensates absolutely be losing and to Danielle, healthcare in more on as I the we two to think the to for commercial we more system. we right. here. that than California that so help navigate, that happened and Babylon access can agree deal. Ambetter go One are we whole, be the Daniel, now In members model order get most can allocated cases, the to results. with right

we have the access for healthcare that UK and for only those much and our to see availability where the mean go who when is very that contracts So, significantly who we who themselves. that will in cohorts just compensate of when Therefore, the healthcare qualitatively happens, improvement more the cohorts accessibility in we not us. will than What care is what seen better. us own access will they margin we will in we activate those those members. but lose we amateur commercial, hopeful of our we better members versus contract for increase members don’t, are contracts, cost a see be I savings directly significantly are

Daniel Grosslight

it. Got

Okay.

say that XXXX? to is the going with divestiture So, the you IPA in XXXX, commercial in safe of to even it see in growth re membership

Ali Parsa

will obviously, Absolutely, the contract we add and just have announced the only we that to the is not contract, XXXX.

will be looking on at this. building We

Daniel Grosslight

to ACO Okay. the to hear of the am have And just some thoughts going your program, XXXX? you attack peers program. retrenched curious on are REACH market I from on in that Any your thoughts how

Ali Parsa

our we from with Daniel, part Yes. business. IPA the of that currently program perspective, our contracts actually is have

to opportunities My is keep we opportunities of at that path being expectation eyes although we our as that, is program. space, outside our final stage on in So, will continue to for our our focus this view near-term on profitability. that to open incremental

Daniel Grosslight

Okay.

the REACH. ACO a divestiture to IPAs. after Medicare So, you over of on And we the bit little Medicare drop of advantage focus kind as PMPMs should expect

David Humphreys

right. live ‘XX, new will well. as Medicare the FY on that X went transaction Obviously, we July in full That’s get the benefit

Daniel Grosslight

Got it.

Okay. Thank you.

Operator

Parsa, floor I Thank for remarks. the you. turn back to will Dr. At this time, closing

Ali Parsa

our doing very which for time everybody for am so. your and thank grateful to to I Just attending session, today everyone

describing we been in carefully. can markets is I see listening we to the think changed. are that We capital the have fundamentally what market the have what here conditions

order first that. that at solution We that scale. care readjusting manage we in health can provision business on in strong, to the digital that is are primary know We our where focus are population and of a

many down see markets digital maybe that to and market are around that or XXXX just cost or of to will saw that, the current are we shutting of that the movie capital. the We already double we again activities, – consequence down seeing And by period. that exit on capital We before renovation one the either going be going of not services are growing of consequence is through those primary significantly is M&A that acquisitions that is shared that And care right the And be the The now. why some are in increasing. statistics, happening demand as I were serving number would the care country, the the we you anywhere. that demand show why that seeing primary are traditional that’s in falling of physicians the across departments.

and primary that and to think already ahead exist. we care scalable achieved. the see highly valuations a for network build effective the go across primary scalable States, that technologies more being You net necessary very United than care make as substantial are and We that

with to we your Thank you so we to get confident following take as to progress We there. will our in that our – focus time, time appeal our pretty going that make we we much That’s back will but but forward. us forward to continue get that up of you time the our valuation, are think It I in eventually in also long fruits for look going we clients. will quarter-after-quarter, want be in and due course. as

Operator

conclude conference. will This you. today’s Thank

you may this Thank participation. time. You disconnect at lines for your your

Babylon Holdings Limited (BBLNF) 14 Nov 222022 Q3 Earnings call transcript