Agilon Health, Inc. · NYSE:AGL
Agilon Health — Q4 2023 Earnings Presentation
18 slides from Agilon Health's earnings presentation, Feb 27, 2023
Slide 1: 4Q Earnings Presentation
4Q Earnings Presentation February 2024 Copyright © 2023 agilon health. Confidential internal document containing proprietary information. Do not distribute.
Slide 2: Disclaimers and Forward-Looking Statements
Disclaimers and Forward-Looking Statements FORWARD-LOOKING STATEMENTS AND OTHER INFORMATION Statements in this presentation that are not historical factual statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Slide 3: Key Messages
Key Messages 2023 Results and 2024 Guidance Impacted by Acceleration in Medical Costs ▪ Completed analysis of updated payor data in mid-February, including relatively complete data from largest payors. Analysis indicated medical costs for our members were higher than previous estimates. ▪ Strengthen
Slide 4: 2023 Medical Margin Bridge - Change from Jan 5 Guidance
2023 Medical Margin Bridge - Change from Jan 5 Guidance Medical Margin Guidance Bridge for Full Year 2023 $340M-360M • $38M from higher costs and • Final revenue revenue attributed to 4Q23 settlements and • $11M from higher costs and claims estimates revenue from prior periods Note: We have not reco
Slide 5: 2024 Medical Margin Bridge
2024 Medical Margin Bridge Market Classes of 2018-2023 (Yr 2+) • Medical cost PMPM now assumes 6.6% trend including clinical program impact (7.9% before programs), compared to assumed trend in prior guidance of 4.1% including clinical program impact (5.3% before programs) • Revenue PMPM trend of 6.0
Slide 6: 2022 - 2024 Adjusted EBITDA Bridge
2022 - 2024 Adjusted EBITDA Bridge • Limited YoY Medical Margin improvement in Year 2+ markets, impacted by $26M of net negative PYD ($15M Adj. EBITDA impact) and higher utilization • $32M market EBITDA loss for Class of 2023 • Modest improvement to Year 2+ Medical Margin • Class of 2024 markets exp
Slide 7: Class of 2023 and Class of 2024 Details
Class of 2023 and Class of 2024 Details Year 1 Class Performance Expected to Significantly Improve in 2024 Class of 2023 Class of 2024 (2023 Results) (2024 Guidance) • Performance driven by: • Performance driven by: ▪ Shorter implementation ▪ Longer implementation ▪ Partner mix/less VBC experience ▪
Slide 8: Actions to Improve Performance, Balance Risk Sharing, and Enhance Predictability
Actions to Improve Performance, Balance Risk Sharing, and Enhance Predictability Enhancing processes and systems to address market dynamics and drive accelerated performance in 2024 and beyond Action Timing Details / Milestones ▪ Reducing performance variability, especially for new PCPs in existing
Slide 9: Member Cohort and Market Class Margin Progression
Member Cohort and Market Class Margin Progression Member Cohorts Drive Long-term Earnings and Cash Flow Trajectory 2023 Member Cohort and Market Class Margin Progression Impacted by Elevated Costs ▪ Medical cost trends were above revenue benchmarks during 2023 and this is expected to continue in 202
Slide 10: Member Cohort Progression (Incurred Results)
Member Cohort Progression (Incurred Results) Medical Margin PMPM by Member Cohorts 2018 Members 2019 Members 2020 Members 2021 Members 2022 Members 2023 Members Elevated Medical Cost $226 Environment Relative to $198 Revenue Benchmarks $167 $188 $160 $143 $157 $131 $136 $133 $143 $142 $94 $115 $80 $
Slide 11: Market Class Margin Progression Details
Market Class Margin Progression Details Market Class Medical Margin Progression Includes Dilutive Impact from Growth: ▪ Over the past 6 years we have added >400 providers and >100,000 MA members to existing markets. New PCPs and members are typically dilutive in Year 1-2 and take time to mature on t
Slide 12: Market Class Progression (Incurred Results)
Market Class Progression (Incurred Results) Medical Margin PMPM by Market Class Class 2018 Class 2019 Class 2020 Class 2021 Class 2022 Class 2023 2018 Market Class includes one large market with significant growth and $201 Elevated Medical Cost physician performance variability. Environment Relative
Slide 13: Market Class Progression (Reported Results)
Market Class Progression (Reported Results) Medical Margin PMPM by Market Class Class 2018 Class 2019 Class 2020 Class 2021 Class 2022 Class 2023 2018 Market Class includes one large market with significant growth and $201 Elevated Medical Cost physician performance variability. Environment Relative
Slide 14: Financial Outlook for Fiscal Year 2024
Financial Outlook for Fiscal Year 2024 Year Ending December 31, 2024 540,000 – 550,000 Medicare Advantage Members 120,000 – 125,000 ACO REACH Members 660,000 – 675,000 Total Members Live on Platform 527,000 – 536,000 Avg. Medicare Advantage Members $6,350 – $6,465 Total Revenues ($M) $400 – $450 Med
Slide 15: Financial Outlook for Q1 2024
Financial Outlook for Q1 2024 Quarter Ending March 31, 2024 520,000 – 530,000 Medicare Advantage Members 125,000 – 130,000 ACO REACH Members 645,000 – 660,000 Total Members Live on Platform 516,000 – 525,000 Avg. Medicare Advantage Members $1,605 – $1,630 Total Revenues ($M) $155 – $170 Medical Marg
Slide 16: Non-GAAP Reconciliations
Non-GAAP Reconciliations 16
Slide 17: Non-GAAP Reconciliations: Medical Margin
Non-GAAP Reconciliations Medical Margin (Dollars in thousands) Year Ended December 31, 2023 2022 Gross profit(1) $ 69,670 $ 111,360 Other operating revenue (9,013) (3,331) Other medical expenses 238,034 183,000 Medical margin 298,691 291,029 1) Gross profit is defined as total revenues less medical
Slide 18: Non-GAAP Reconciliations: Adjusted EBITDA
Non-GAAP Reconciliations Adjusted EBITDA (Dollars in thousands) Year Ended December 31, 2023 2022 Net income (loss)(1) $ (262,803) $ (106,864) (Income) loss from discontinued operations, net of income taxes 67,550 14,554 Interest expense 6,658 4,484 Income tax expense (benefit) 791 1,640 Depreciatio