Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue for the first quarter of 2024 grew approximately 29% year-over-year, indicating strong top-line growth.
- Medicare lives grew to approximately 126,800, a 23% increase year-over-year, exceeding the low end of full-year guidance.
- Operating expenses decreased by 26% year-over-year to $26.2 million, demonstrating improved operational efficiency.
- Medical expense in the quarter was approximately 12% lower sequentially, reflecting a normalizing utilization trend.
- Strategic partnership announced with Innovator to leverage their advanced AI platform for predictive modeling and improving data accessibility at the point of care.
Negative Points
- Adjusted EBITDA for the quarter was a loss of $19.8 million, roughly flat compared to the first quarter of 2023.
- The company acknowledged being overconservative in their financial estimates by $20 to $30 PMPM, indicating potential issues in financial forecasting.
- There was an $8 million impact due to a timing difference related to Part D exposure, affecting financial results.
- Despite revenue growth, the company still faces challenges in achieving a positive adjusted EBITDA, with current figures still showing a loss.
- The transition to a new CEO could bring uncertainties and challenges in maintaining the momentum and strategic direction of the company.
Q & A Highlights
Q: What are the key drivers for P3 Health Partners' pathway to profitability in 2024?
A: (Sherif Abdou, CEO and Director) The key drivers include a strong membership growth, particularly in Medicare lives, improved operational efficiencies, and strategic partnerships to enhance predictive modeling and data capabilities. The company also focuses on maintaining high member persistency and expanding into new counties.
Q: Can you discuss the financial performance in Q1 2024 compared to the previous year?
A: (Atul Kavthekar, CFO) In Q1 2024, P3 Health Partners saw a revenue increase of 29% year-over-year, with a notable improvement in medical margin and a decrease in operating expenses. However, adjusted EBITDA was a loss, roughly flat compared to Q1 2023.
Q: What impact did the Part D rebates have on the financials this quarter?
A: (Sherif Abdou, CEO and Director) The timing of recognizing Part D rebates affected the financials, as the full expense was recognized in the quarter without the corresponding rebate credit, which will be accounted for in subsequent quarters.
Q: How does the company plan to handle the reserve estimates and potential adjustments?
A: (Atul Kavthekar, CFO) The company is working with actuaries to reevaluate reserve estimates based on actual claims data from 2024, aiming to align reserves more closely with actual experience, potentially leading to favorable adjustments.
Q: What strategic partnerships has P3 Health Partners entered into recently?
A: (Sherif Abdou, CEO and Director) The company announced a partnership with Innovator to leverage their advanced AI platform, which will enhance predictive modeling and improve data accessibility at the point of care.
Q: What is the outlook for P3 Health Partners in 2024 regarding membership and financial targets?
A: (Atul Kavthekar, CFO) The company reaffirms its full-year guidance for 2024, expecting significant membership growth, revenue between $1.45 billion and $1.55 billion, and an adjusted EBITDA of $20 million to $40 million. The guidance reflects confidence in operational efficiencies and medical cost management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
