PIII

Image source: The Motley Fool. Monday, Aug. 10, 2026 at 4:30 p.m. ET CEO - Aric Coffman Investor Relations - William Hoover Operator: Good day, and welcome to the P3 Health Partners Second Quarter 26 Earnings Conference Call. All participants will be in a listen-only mode. By pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press *1 on your touch tone phone. And to withdraw your question, please press *2. Please note this event is being recorded. I would now like to turn the conference over to Mr. William Hoover of Investor Relations. Please go ahead. Thank you, operator, and thank you for joining us today. Before we proceed with the call, I would like to remind everyone that certain statements made during the call are forward-looking statements under the U.S. Federal Securities Laws. Including statements regarding our financial outlook and long term targets. These forward looking statements are only predictions and are based largely on our current expectations and projections about future events and financial trends. That we believe may affect our business and financial condition, and results of operations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in a periodic report filed with the SEC. The forward looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise these forward looking statements. We refer to certain non-GAAP financial measures on this call, including adjusted operating expense, adjusted EBITDA, adjusted EBITDA per member per month, normalized adjusted EBITDA, medical margin, medical margin per member per month, and cash flow. These non GAAP financial measures are in addition to and not a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non GAAP financial measures. For example, other companies may calculate similarly titled non GAAP financial measures differently. Please refer to the appendix of our earnings release for a reconciliation of these non GAAP financial measures to the most direct comparable GAAP measures. The information presented on this call is contained in the press release that we issued today and in our SEC filings. Which may be accessed from the Investor page of the P3 Health Partners website. I will now turn the call over to Aric Coffman, CEO of P3 Health Partners. Aric Coffman: Good afternoon, and thank you for joining us today to discuss our second quarter results. Q2 represents a continuation of the positive momentum we have built over the last 2 years and reflects sustained execution against the plan we shared with you at the outset of my tenure. None of this happens without the work of our teams across the country. Their focus, discipline, and their day to day execution are what converts strategy into results. And I want to thank them for the dedication they bring to serving our patients, our providers and payer partners. We delivered $54 million of adjusted EBITDA in the second quarter, bringing our first half total adjusted EBITDA to $80 million building on the trajectory we established in Q1. Given the strong performance and our confidence in the underlying business, we are raising our full year 2026 outlook. it is been just over 2 years since I began leading P3. The results of this quarter reflect how much the structural and operational changes we have made across our contracts, our markets and our operating model continue to compound. We remain focused on medical cost improvement, quality and burden of illness performance, disciplined growth, and continued operational improvements through people, process and technology. There are 3 things to highlight about P3's performance through the first half of 2026. First is operational execution. As we have discussed previously, our operating model is centered around medical cost management, quality execution, provider engagement and coding accuracy. Across the organization, we are expanding our point of care tools ahead of schedule, now reaching greater than 65 thousand lives across our portfolio. Allowing more accurate burden of illness capture and quality gap closures. These AI enhanced tools reduce the administrative burden for the clinicians as we are meeting our provider partners where they are to drive adoption in daily practice. Our quality performance is tracking ahead of our internal glide path towards 4 stars on HEDIS and medication adherence measures. Our impact across utilization management and payment integrity are tracking at or above plan and we will be expanding these programs as part of our contractual reset with payers. Our clinical and care management programs continue to expand with a focus on high risk, rising risk patients and transitions of care. The impact from our operating model can be seen in our Q2 MA medical expense trend and quality trajectory. Medical cost trend across our MA population to the first half 26 was 1.8% lower than full year 2025, which Leif will cover in more detail. This is a significant and sustained differentiator in the sector when compared to peers running 5% to 7% year over year. Quality remains 1 of the most important levers in Medicare Advantage, both for the patients we serve and for the strength of our payer relationships. Strong quality performance is not only linked with better patient outcomes, it directly supports better economic terms and deeper alignment with our payer partners and is an area where P3 continues to differentiate. Quality is tracking well through the first half of the year. We are ahead of our glide path to get to 4-star on HEDIS and medication adherence measures. We have also improved our process around alternative submissions driving 3x the total submissions at this point compared to the prior year. With total members impacted by quality submissions up close to 20% from Q1. This progress reflects the scale and effectiveness of our improved processes. Second is our payer partnerships. And our contract structure design work we began 18 months ago, we focused on redesigning and enhancing our risk profile funding and cost accountability with our key payer partners, including enhanced funding mechanisms, revising risk-sharing arrangements, delegation expansion, and improving alignment around medical cost accountability. As you look at the composition of this quarter's results, a portion of our Q2 performance reflects onetime nonrecurring items across multiple payer contracts. These settlements are more than a financial event. They reflect the trust our payer partners continue to place in P3 and our shared commitment to taking care of our patients and provider partners. Third is growth. Our engagement in Nebraska that we shared with you earlier this year continues to progress positively. We are executing on our expected trajectory and look forward to sharing more as it matures. We favor a deliberate glide path on geographic expansion. Understand the population, build the clinical and operational infrastructure, and validate performance before taking on full risk. This sequencing reduces downside exposure and positions us to enter full risk in a disciplined way In addition, with our existing partners, we continue to explore growth opportunities in both current and new geographies. Overall, our second quarter was strong. And reflects the compounding benefit of the work we have done over the past 2 years. We have 2 quarters remaining in 2026, and our attention remains on sustaining that execution. These results reinforce our confidence that the business has moved into a phase of durable, more predictable earnings. And that trajectory is what gives us the confidence to raise our outlook for the year. The core economic levers that drive the business our contract structure our operating model our clinical execution are increasingly within our control. Our work is never finished, but the framework for 2026 is solid. And we remain focused on executing with the same discipline that got us here. Our success is predicated on the engagement of our clinician partner. I am proud of the work we have established with the Restore program to impact clinician engagement improve practice sustainability, and bring solutions to help them succeed. To speak more about that and to discuss our clinical performance, I will turn the call over to Amir. Amir Bacchus: Thank you, Aric. I want to spend a few minutes on the clinical work driving the financial results we are delivering. Medical expense trend performance we are seeing this quarter is not accidental. It reflects deliberate clinical programs expanding point of care technology and disciplined utilization management and payment integrity execution. All built around the care enablement model. I will walk through where that work is showing up most clearly this quarter. Our point of care technology appointment is ahead of plan. Tracking to roughly 110% of our original year end goal. Where the tool is in use, the results are clear. Providers are addressing nearly 90% of care gaps at the point of care. With capture rates running several points ahead of our broader enterprise average. Todd, the tool is open in roughly half of eligible visits, and we are closing that gap through the in office training embedded directly into provider offices rather than relying on remote onboarding. Our provider network and clinical teams saw 87% of our patients through the second quarter. 2 points ahead of our internal glide path. Including 99.5% of our highest risk members enterprise wide. Well ahead of the 90% glide path for that population. Seeing members regularly is foundational to how we care for our population. Our care management team and senior wellness centers play a key role in that effort. Extending access and creating additional touch points with our highest risk patients beyond the traditional practice setting. Helping us reach and see more of our population. Together, this engagement allows us to connect patients to the right clinical programs, monitor chronic conditions proactively and intervene earlier when care is needed. It is a key driver of both quality outcomes and the overall health of our patients. Our utilization management program is built around a simple principle: patients should receive care in the right setting, delivered by the right level of provider, at the right time. We have expanded our review of prepaid hospital billing to confirm medical record support the level of care submitted. And broadened our review of appropriate site of care. Helping direct patients to home health support rather than a skilled nursing facility when that is the better clinical fit. That work has driven a 17% year to date redirect rate from skilled nursing to home. Reflecting our commitment to caring for patients in the setting that is best for their recovery and well-being, while remaining responsible stewards the health care resources we are entrusted with. We also continue to invest in our provider community through Restore, our clinician coaching program. The first half of the year, we expanded the program across 4 markets: and clinicians completing the program report meaningful improvement across measures like stress management, leadership confidence, and practice satisfaction. This work supports the stability and engagement of the provider network our model depends on. This quarter, we expanded the offering further to include asynchronous education and CME credit. Making it easier for more of our provider community to participate. In total, this work reflects a clinical foundation that is increasingly built for scale, from how we engage patients and support providers to how we manage utilization and ensure payment accuracy. It is the operating discipline that underpins the financial results you are about to hear. With that, I will turn the call over to Leif to walk you through our financials. Leif Pedersen: Thank you, Amir, and good afternoon. Q2 was another strong quarter. We delivered $54 million of adjusted EBITDA. Including approximately $9 million of underlying adjusted EBITDA, excluding favorable contractual settlements, and prior year development. Importantly, the underlying business is profitable and improved quarter over quarter. The settlements recognized in the quarter reflect the constructive resolution of legacy contractual matters and strong alignment with several of our payer partners. More broadly, our results demonstrate the cumulative impact of the foundational changes we have made across the business including improved payer economics, better medical expense performance, and disciplined clinical and operational execution. This afternoon, I will cover 3 areas. First, financial performance for the quarter. Including an update on our medical cost trend, second, our capital position and liquidity and third, our revised outlook for the remainder of 2026. Starting with membership, total at-risk at the end of Q2 was approximately 105 thousand compared to $116 thousand in Q2 2025. Consistent with what we have shared previously, the year over year decline reflects the deliberate portfolio actions we took throughout 2025 including the exit of arrangements that did not meet our economic thresholds. The membership base we are operating from today is more concentrated in relationships where our model performs best. In addition to our at-risk membership, we manage approximately 28 thousand lives through management services, bringing total lives under management approximately 133 thousand. We began reporting this metric in Q1 because it provides a more complete view of the scale of the P3 platform and reflects our ability to support payer and provider partners across different levels of risk and service. Moving to revenue. Q2 revenue was $386 million compared to $356 million in the same period of 2025. Despite a lower membership base, per member funding for our at-risk population improved approximately 15% year over year. Reflecting continued success in rate progression, contractual restructuring and further maturation of our burden of illness documentation across our network. Medical claims expense for the quarter was $269 million. The results include approximately $45 million of favorable payer settlements and prior year development. Year to date, our MA medical cost trend is 1.8% below full year 2025 baseline. When fully excluding the favorable payer settlements and adjusting for prior year development. Medical margin for the quarter was $98 million or $311 PMPM. Medical loss ratio for the quarter was 85.6% when adjusted for the favorable payer settlements and prior year development noted above. These results reflect the improved payer economics clinical execution and enhanced payment integrity workflows along with the utilization management progress previously described. Adjusted operating expense for the quarter was $32 million consistent with cost structure we have established over the prior 18 months. That total includes continued investment in professional fees supporting improved coding and documentation, as well as infrastructure costs associated with standing up our Nebraska market. We continue to direct investment towards frontline capabilities that drive medical costs, and quality performance. While remaining diligent about cost discipline across the rest of the organization. Adjusted EBITDA for Q2 was $54 million compared to a loss of $17 million in the same period of 2025. Of that result, approximately $45 million reflects the favorable payer settlements and prior year developments noted previously. Excluding those items, underlying Q2 adjusted EBITDA was approximately $9 million reflecting the core operating performance of the business. These Q2 results bring us to adjusted EBITDA of $80 million for the first half of 26. Compared to a loss of $39 million in the first half of 25. Of the $62 million in favorable payer settlements and prior year development recognized across the first half. $17 million was recognized in Q1, and $45 million in Q2. Excluding those items, underlying first half adjusted EBITDA was approximately $18 million. For us, this is an important milestone. It shows the improvement in our economics is not solely dependent on contractual settlements or prior period development. The core business itself is now generating positive adjusted EBITDA. On the balance sheet, we ended the quarter with $21 million in cash and equivalents. Consistent with the liquidity framework we have communicated, we continue to manage capital with discipline, while maintaining focus on operational execution and financial stability. Now moving to our updated 2026 outlook. We are raising our full year 2026 adjusted EBITDA outlook to a range of $80 million to $110 million with a midpoint of $95 million The revision reflects the favorable contractual settlements in prior year developments recognized in the first half. As well as continued improvement in our expectations for the remainder of the year. We are also tightening the range as we gain further visibility into the back half of the year. Our confidence is rooted in the improved economics now flowing through our results and the operating discipline we have established across the business. We remain mindful of the typical seasonal build in medical expense trends in the second half of the year and we are actively managing that dynamic through the same care management utilization management, and payment integrity programs Amir described. With that, I will turn it back to Aric for closing comments. Aric Coffman: Thanks, Leif. Before we open the line for questions, I want to leave you with 3 takeaways from the quarter. First, the structural work we set out to do 2 years ago is now fully embedded in how we run the business. Contract restructuring, network concentration and operational redesign continue to translate directly into our economics, and we are seeing that discipline compound quarter after quarter. There is more work ahead of us in the back half of the year and it remains a top priority. Second, our clinical model utilization management and payment integrity processes continue to set us apart. From the growth in our patients seen to our quality performance to the continued scaling of our point of care technology, we continue to drive down total cost of care and improve outcomes. These efforts are reflected in our MA medical cost trend this year, running nearly 2% below our 2025 baseline. We expect that gap to remain a meaningful point of differentiation as the year progresses. Third, we head into the back half of the year in a stronger position than where we started it. We are raising our full year outlook to $80 million to $110 million and our fundamentals continue to mature, our results are becoming more predictable. We are proud of the progress this business has made and we remain focused on executing with the same discipline that got us here. With that, operator, please open the line for questions. Operator: Thank you. We will now begin the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press *2. And our first question for today will come from Ryan Langston with TD Cowen. Please go ahead. Brian Langston: Thanks. Good afternoon. On the payer settlement, can you walk us through specifically what that is related to? Is that impact impacting both revenue and expense? And are you able to explicitly size the settlement in the quarter? Leif Pedersen: Hey, Ryan, it is Leif. Appreciate the question. Brian Langston: Hey, Leif. Leif Pedersen: I think the easiest way to kind of walk through that is just I will just reiterate what that bridge is, first and foremost. And so Q2 adjusted EBITDA was $54.4 million less $45 million of favorable prior period development and payer settlement. And just to let you know, Ryan, specifically, the payer settlement amount was $41 million. And that did not affect revenue. That only affected medical claims expense. Brian Langston: Got it. Okay. that is helpful. And then maybe anything I am sorry if I missed it. Maybe anything on just sort of seasonality of earnings, medical margin, EBITDA through the back half of this year? Leif Pedersen: Yes. So as you think about where we are at year to date, we were at $80 million for the 6 months ended June 30. For a reported EBITDA number. Underlying that is $18 million of embedded EBITDA. And $62 million of prior period settlements that came from Q1 and Q2. The midpoint for guidance in the back half is $95 million. So if you just took, where we are at today and you assume that we would get to a midpoint from an underlying EBITDA perspective, that would be about $15 million of additional EBITDA in the back half of the year. That takes into consideration both what we expect there to be some normal traditional industry pressure from the backside of the year in medical expense from utilization. But that is being offset by in year programmatics that are gonna drive and offset some of that cost. And just, you know, I am going to take it a step further. For you, Ryan, as well. Just as we think about it, and Aric spoke to this in his opening comments, is we are seeing a 1.8% reduction in MedEx trend if you look at full year 2025 and you compare that to the 6 months ended 36, and we are down 1.8%. And that is attributable to a number of things that include the programmatics that we have in place, Also, it is contributing to that decrease. it is some of the network curation and specific actions that we took with our membership population exiting 2025. And then there were some other factors as it relates to benefit plan reductions, our benefit reductions within our payer partner plans that they offered in 2026. Okay. Got it. Brian Langston: And just 1 last 1 for me, and then I will hop back in the queue. I guess any insight into how your plans price benefits for 2027? And then just maybe more specifically, some of the plans have talked about further market exits or further planned exits next year. Any thoughts on if those exits will actually impact your current membership? Thanks. Aric Coffman: Yes. Thanks for that. This is Aric. So I think there is some of it is a little bit early to know. We are still in August, and some of those factors will get played out as we get more insight into what the benefit design actually looks like. We have seen some of the same notifications on county exits. We do not expect that to have a major impact on our membership overall in terms of the exited counties. In terms of the benefit design, we will have a much cleaner picture when we get to next earnings call after Q3. Got it. Brian Langston: Thank you. Aric Coffman: You are welcome. Operator: Your next question will come from Benjamin Haynor with Lake Street Capital Markets. Please go ahead. Benjamin Haynor: Good afternoon, gentlemen. Thanks for taking the questions. First off, Leif, if I can kind of summarize what you said it sounds like the core EBITDA that you have generated in the first half of the year is effectively if you do the same in the back half of the year, that is what gets you to the kind of the midpoint of the guidance range. Am I hearing you right there? Leif Pedersen: I think you are directionally correct in that analysis, Ben. I do think that we have factored in some back half pressure that goes into that. As well as risk rating other opportunities inside the second half of the year. Benjamin Haynor: Got it. And then on with the Nebraska trajectory, it sounds like that is going well. Can you maybe remind us how that tracks What happens in 2027 before you move to at risk in 2028, I believe? Aric Coffman: Yes. Thanks for the question. This is Aric. So we will remain in a relationship in 2027 where we are performing services on behalf of our partner in Nebraska We will continue to build out and scale the programmatics that we put in place there. And we do not move into the full risk arrangement until 2028. Benjamin Haynor: Okay. Got it. And then it sounds like the point-of-care tools, those have seen quite the adoption thus far. You know, half of office visits, that is pretty impressive. Where do you think you can get, and is there any kind of additional feedback that you have gotten that you can share on those tools and that program? Amir Bacchus: Well, we continue to roll out the program and we get more interest from our providers all the time. Really, as we started the program because, again, as a novel program, we started really, really a year or so ago, getting the interest as the provider starts to talk more about it and understand what it is to actually make the workflow easier. Is the key. Right? So as we work through our tier 1 providers and then now looking at expanding into our tier 2 providers, and them talking about the value that it brings to improve their workflow. that is kind of the magic that allows us to get more traction within the tool. And then to drive better performance because not only can we show them you know, gaps in care opportunities, but we can show them a and better understanding from a diagnostic standpoint and the clinical diagnosis that they have had. For suspect diagnoses as well. Improve the care of the patient. Because you link those with our other team members, whether it is our high-risk management that we deal with on some of those populations within those practices, as well as our care management teams. Benjamin Haynor: And is it through all the tier 1 providers and just rolling out into tier 2? Or how far along in the process is it? Amir Bacchus: You know, almost all of our Tier 1s at the same time we are expanding into Tier 2s. So the Tier 2s are getting more traction every day. Then if you want, we can break down those numbers exactly for you as we go. But there is been a number of really good actions that we have had with FQHCs, etcetera, and how they are looking at how they utilize the information. Benjamin Haynor: Okay. Got it. Well, congrats on the progress, gentlemen, and thanks for taking the questions. Leif Pedersen: Thanks, Benjamin. Operator: This concludes our question and answer session. I would like to turn the conference back over to management for any closing remarks. Please go ahead. Aric Coffman: Thanks, everyone, for joining, and that will conclude the call. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. 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Interested in P3 Health Partners Inc.? Here are five stocks we like better. P3 Health Partners reported $54 million in second-quarter adjusted EBITDA, up from a $17 million loss a year earlier, but the result included $45 million from favorable payer settlements and prior-year development. Excluding those items, underlying quarterly EBITDA was approximately $9 million. The company said medical-cost trends remained favorable, with first-half Medicare Advantage costs running 1.8% below the 2025 baseline. Clinical initiatives also expanded, including point-of-care tools reaching more than 65,000 lives and strong engagement with high-risk members. P3 raised its 2026 adjusted EBITDA outlook to $80 million-$110 million, with a midpoint of $95 million. At-risk membership declined to about 105,000, while the company plans to continue its Nebraska partnership in 2027 and delay full-risk operations there until 2028. After Soaring 182% Is Time To Ring The Register In P3 Health? P3 Health Partners (NASDAQ:PIII) reported second-quarter adjusted EBITDA of $54 million and raised its full-year 2026 outlook, while noting that the quarterly result included $45 million of favorable payer settlements and prior-year development. Chief Executive Officer Aric Coffman said the company’s second-quarter performance reflected continued execution on contract restructuring, network concentration, medical-cost management and clinical operations. P3 reported $80 million in adjusted EBITDA for the first half of 2026, compared with a $39 million loss in the first half of 2025. → MarketBeat Week in Review – 08/03 - 08/07 “The core economic levers that drive the business, our contract structure, our operating model, and our clinical execution are increasingly within our control,” Coffman said. Revenue for the second quarter was $386 million, up from $356 million in the prior-year period, despite a lower at-risk membership base. Chief Financial Officer Leif Pedersen said per-member funding for the at-risk population increased about 15% year over year, which he attributed to rate progression, contract restructuring and improved burden-of-illness documentation. → Quantum Earnings Week: Winners and Losers Are Finally Emerging At-risk membership totaled about 105,000 at the end of the quarter, down from 116,000 a year earlier. Pedersen said the decline reflected portfolio actions taken during 2025, including exits from arrangements that did not meet P3’s economic thresholds. The company also managed approximately 28,000 lives through management-services arrangements, bringing total lives under management to about 133,000. Medical claims expense totaled $269 million. The result included approximately $45 million in favorable payer settlements and prior-year development. During the question-and-answer session, Pedersen said the payer settlement itself totaled $41 million, did not affect revenue and was recorded solely in medical claims expense. Medical margin was $98 million, or $311 per member per month. Medical loss ratio was 85.6% after adjusting for favorable settlements and prior-year development. Adjusted operating expense was $32 million, including investments in coding and documentation support as well as Nebraska-market infrastructure. Adjusted EBITDA was $54 million, versus a $17 million loss in the second quarter of 2025. → Take-Two’s Q1 Results Leave GTA 6 Bulls Stuck in the Fog of War Excluding the $45 million of favorable payer settlements and prior-year development, Pedersen said underlying second-quarter adjusted EBITDA was approximately $9 million. Across the first half, P3 recognized $62 million of favorable payer settlements and prior-year development, including $17 million in the first quarter and $45 million in the second quarter. The company said underlying first-half adjusted EBITDA was approximately negative $18 million. Management said Medicare Advantage medical-cost trend for the first half of 2026 was 1.8% below the full-year 2025 baseline, excluding favorable payer settlements and adjusting for prior-year development. Coffman contrasted that result with what he described as peers experiencing 5% to 7% year-over-year trends. Chief Medical Officer Amir Bacchus said P3’s point-of-care technology deployment was ahead of plan and on track for roughly 110% of the company’s original year-end goal. The tools had reached more than 65,000 lives across the portfolio, according to Coffman. Bacchus said providers using the tools addressed nearly 90% of care gaps at the point of care, while capture rates were several points above the broader enterprise average. The tools were open in roughly half of eligible visits, and P3 was seeking to expand adoption through in-office provider training. P3’s provider network and clinical teams saw 87% of patients through the second quarter, two percentage points ahead of the company’s internal target, Bacchus said. The company also saw 99.5% of its highest-risk members, exceeding its 90% glide path for that population. In utilization management, P3 expanded reviews of prepaid hospital billing and appropriate sites of care. Bacchus said the work resulted in a 17% year-to-date redirect rate from skilled nursing facilities to home-based care where that setting was deemed the better clinical fit. The company said quality performance was ahead of its internal glide path toward four-star HEDIS and medication-adherence measures. It also reported three times as many alternative quality submissions as at the same point a year earlier, with members affected by quality submissions up nearly 20% from the first quarter. P3 ended the quarter with $21 million in cash and equivalents. The company raised its full-year 2026 adjusted EBITDA outlook to a range of $80 million to $110 million, from its prior outlook, with a midpoint of $95 million. Pedersen said the updated outlook reflects settlements and prior-year developments recognized in the first half, as well as improved expectations for the remainder of the year. He added that the company expects the usual seasonal increase in medical expenses during the second half but plans to offset some of that pressure through care management, utilization management and payment-integrity programs. Regarding its Nebraska expansion, Coffman said P3 will continue providing services for its partner during 2027 while building and scaling its programs. The company does not expect to enter a full-risk arrangement in Nebraska until 2028. Coffman said P3 does not currently expect announced county exits by some Medicare Advantage plans to have a major impact on its membership. He said the company expects to have a clearer view of 2027 benefit design following its third-quarter results. P3 Health Partners is a healthcare technology and services company that delivers data-driven solutions to support health plans in improving quality measures, risk adjustment accuracy and operational efficiency. The company's platform integrates advanced analytics, reporting capabilities and workflow automation to help clients optimize performance across value-based care programs and regulatory requirements. The company's core offerings include quality measurement and reporting for HEDIS, STAR and other performance frameworks, risk adjustment coding and audit services, and population health analytics. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "P3 Health Partners Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributes the strong Q2 performance to the compounding effects of a two-year structural redesign of payer contracts, market concentration, and operating models. The company achieved a significant differentiator in medical cost management, with a Medicare Advantage medical cost trend 1.8% lower than the full-year 2025 baseline, contrasting with peer trends of 5% to 7%. Operational execution is being driven by the rapid deployment of AI-enhanced point-of-care tools, which now reach over 65,000 lives and facilitate more accurate burden of illness capture. Strategic portfolio actions taken in 2025, including exiting underperforming arrangements, have resulted in a more concentrated membership base where the P3 model performs most effectively. Payer partnerships have been fundamentally redesigned to enhance risk profile funding and cost accountability, moving beyond simple financial events to deep clinical alignment. Quality performance is tracking ahead of internal targets for 4-star HEDIS ratings, which management views as a critical lever for securing better economic terms with payers. Full-year 2026 adjusted EBITDA guidance was raised to a range of $80 million to $110 million, reflecting both first-half settlements and improved expectations for core business performance. The guidance assumes a midpoint of $95 million, implying approximately $15 million of additional underlying EBITDA in the second half of the year after accounting for seasonal utilization pressures. Geographic expansion, specifically in Nebraska, follows a deliberate 'glide path' where P3 validates performance and infrastructure before assuming full risk in 2028. Management expects the gap between their medical cost trend and industry averages to remain a meaningful point of differentiation throughout the remainder of the year. The business has transitioned into a phase of durable and more predictable earnings as core economic levers move increasingly within management's control. Q2 results included $45 million in favorable payer settlements and prior-year development, which management characterized as a constructive resolution of legacy matters. Excluding non-recurring items, the underlying business generated $9 million in adjusted EBITDA for Q2, marking a milestone of core operational profitability. Per-member funding for the at-risk population improved approximately 15% year-over-year, despite lower total membership, due to rate progression and better documentation. The 17% year-to-date redirect rate from skilled nursing facilities to home health reflects a strategic shift in utilization management to lower-cost, high-quality settings. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that of the $45 million in favorable items, $41 million was specifically related to payer settlements. These settlements impacted medical claims expense only and did not affect the revenue line. The midpoint guidance suggests $15 million in additional underlying EBITDA for the second half of the year. This forecast accounts for traditional year-end utilization pressure, which management plans to offset through active payment integrity and care management programs. Management does not expect announced county exits by major payers to have a significant impact on their total membership. Specifics on 2027 benefit designs remain early, with more clarity expected following the third-quarter results. Point-of-care technology deployment is at 110% of the original year-end goal, with providers addressing nearly 90% of care gaps when using the tool. The tool is currently used in roughly half of eligible visits, with expansion moving from Tier 1 providers into Tier 2 networks to improve workflow and diagnostic accuracy.

Raises Full-Year 2026 Adjusted EBITDA Guidance Management to Host Conference Call and Webcast August 10, 2026 at 4:30 PM ET HENDERSON, Nev., August 10, 2026--(BUSINESS WIRE)--P3 Health Partners Inc. ("P3" or the "Company") (NASDAQ: PIII), a patient-centered and physician-led population health management company, today announced its financial results for the second quarter ended June 30, 2026. "Q2 demonstrates that the business is now executing according to our plan. We delivered $54 million of adjusted EBITDA, with the core business driving improved profitability quarter over quarter. Our results reflect the structural improvements now embedded across our contracts, our network, and our operating model, the work I outlined at the onset of my tenure. That strength gives us the confidence to raise our full-year 2026 adjusted EBITDA outlook and to enter the second half focused on execution," said Dr. Aric Coffman, CEO of P3. Second Quarter 2026 Financial Results At-risk membership was approximately 105,000 members for the second quarter, a decrease of 10% compared to prior year, reflecting previously disclosed intentional network and payer rationalization. Total lives under management were approximately 133,000 for the quarter, including approximately 28,000 lives under management service arrangements. Total revenue was $386 million, an increase of 9% compared with the prior year quarter. Total per-member capitated revenue increased 15% from the same period in the prior year driven by improved network economics, rate progression, and burden of illness performance. Medical margin(1) for the quarter was $97.8 million, or $311 on a per-member-per-month basis. The results include the favorable impact of payer settlements and prior year development recognized in the quarter. Excluding these items, medical margin for the quarter was $52.9 million, or $168 on a per-member-per-month basis. Net income was $15.7 million compared to a net loss of $43.7 million in the prior year quarter. Adjusted EBITDA(1) for the quarter was $54.4 million, or $173 per-member-per-month, compared to a loss of $17.1 million, or negative $49 per-member-per-month in the prior year quarter. Revised Fiscal 2026 Guidance Full-year revised guidance reflects the impact of underlying first half performance, as well as the prior-year development and payer settlements recognized in the quarter. The foregoing 2026 outlook statement represents management's current estimate as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the "Cautionary Note Regarding Forward-Looking Statements" included in this release. Management does not assume any obligation to update these estimates. Management to Host Conference Call and Webcast on August 10, 2026 at 4:30 PM ET About P3 Health Partners (NASDAQ: PIII): P3 Health Partners Inc. is a leading population health management company committed to transforming healthcare by improving the lives of both patients and providers. Founded and led by physicians, P3 has an expansive network of more than 2,100 affiliated primary care providers across the country. Our local teams of health care professionals manage the care of thousands of patients in 26 counties across five states. P3 supports primary care providers with value-based care coordination and administrative services that improve patient outcomes and lower costs. Through partnerships with these local providers, the P3 care team creates an enhanced patient experience by navigating, coordinating, and integrating the patient’s care within the healthcare system. For more information, visit www.p3hp.org and follow us on LinkedIn and Facebook.com/p3healthpartners. Non-GAAP Financial Measures In addition to the financial results prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), this press release contains certain non-GAAP financial measures as defined by the SEC rules, including Adjusted EBITDA and Adjusted EBITDA PMPM, medical margin, medical margin PMPM, and adjusted operating expense. EBITDA is defined as GAAP net income (loss) before (i) interest, (ii) income taxes and (iii) depreciation and amortization. Adjusted EBITDA is defined as EBITDA, further adjusted to exclude the effect of certain supplemental adjustments, such as (i) mark-to-market warrant gain/loss, (ii) premium deficiency reserves, (iii) equity-based compensation expense, (iv) certain transaction and other related costs and (v) certain other items that we believe are not indicative of our core operating performances. Adjusted EBITDA PMPM is defined as Adjusted EBITDA divided by the number of at-risk Medicare members each month divided by the number of months in the period. We believe these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other similar companies. Medical margin represents the amount earned from capitation revenue after medical claims expenses are deducted and medical margin PMPM is defined as medical margin divided by the number of Medicare members each month divided by the number of months in the period. Medical claims expenses represent costs incurred for medical services provided to our members. As our platform grows and matures over time, we expect medical margin to increase in absolute dollars; however, medical margin PMPM may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM. Adjusted operating expense is defined as total operating expense excluding depreciation and amortization and costs that management believes are non-core to the underlying operations of the Company, consisting of (i) medical expense, (ii) premium deficiency reserves, (iii) equity-based compensation, and (iv) certain other items that we believe are not indicative of our core operating performance. We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. In addition, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. The tables at the end of this press release present a reconciliation of Adjusted EBITDA, medical margin to gross profit, medical margin PMPM to gross profit PMPM, and adjusted operating expense to operating expense, which are the most directly comparable financial measures calculated in accordance with GAAP. Key Performance Metrics In addition to our GAAP and non-GAAP financial information, the Company also monitors "at-risk members" to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. At-risk membership represents the approximate number of Medicare members for whom we receive a fixed percentage of premium under capitation arrangements as of the end of a particular period. Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "envision," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "pro-forma," "project," "seek," "should," "target," or "will," or the negative or other variations thereof, and similar words or phrases or comparable terminology, are intended to identify forward-looking statements. These forward-looking statements address various matters, including the Company’s future expected growth strategy and operating performance; and the Company’s ability to execute on its identified strategic improvement opportunities, all of which reflect the Company’s expectations based upon currently available information and data. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected or estimated and you are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, our ability to continue as a going concern; our potential need to raise additional capital to fund our existing operations or develop and commercialize new services or expand our operations; our ability to achieve or maintain profitability; our ability to maintain compliance with our debt covenants in the future, or obtain required waivers from our lenders if future operating performance were to fall below current projections, and if there are material changes to management’s assumptions, we could be required to recognize non-cash charges to operating earnings for goodwill and/or other intangible asset impairment; our ability to identify and develop successful new geographies, physician partners, payors and patients; changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to our services; our ability to fund our growth and expand our operations; changes in laws and regulations applicable to our business; our ability to maintain our relationships with health plans and other key payors; the impact of fluctuations in risk adjustments; our ability to establish and maintain effective internal controls; our ability to maintain compliance with California regulations related to financial solvency and operational performance; our ability to maintain the listing of our securities on Nasdaq; increased labor costs and medical expense; our ability to recruit and retain qualified team members and independent physicians; and the factors described under Part I, Item 1A. "Risk Factors" and Part II, Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 26, 2026, and in our subsequent filings with the SEC. All information in this press release is as of the date hereof, and we undertake no duty to update or revise this information unless required by law. You are cautioned not to place undue reliance on any forward-looking statements contained in this press release. View source version on businesswire.com: https://www.businesswire.com/news/home/20260810669897/en/ Contacts William HooverInvestor RelationsGilmartin [email protected]

Raises Full-Year 2026 Adjusted EBITDA Guidance Management to Host Conference Call and Webcast May 14, 2026 at 4:30 PM ET HENDERSON, Nev., May 14, 2026--(BUSINESS WIRE)--P3 Health Partners Inc. ("P3" or the "Company") (NASDAQ: PIII), a patient-centered and physician-led population health management company, today announced its financial results for the first quarter ended March 31, 2026. "Q1 represents a meaningful turning point for the business. The $26 million of adjusted EBITDA we delivered this quarter reflects the cumulative impact of two years of deliberate work, including contract restructuring, network concentration, and operational redesign. Based on the strength of Q1 and our confidence in the underlying trajectory, we are raising our full-year 2026 adjusted EBITDA outlook to a midpoint of $40 million," said Dr. Aric Coffman, CEO of P3. First Quarter 2026 Financial Results At-risk membership was approximately 106,000 members for the first quarter, a decrease of 10% compared to prior year. The decrease reflects previously disclosed intentional network and payer rationalization. Total lives under management were approximately 135,000 for the quarter, including the approximately 29,000 lives under management service arrangements. Total revenue was $386 million, an increase of 4% compared to the first quarter of the prior year. Total per-member revenue increased 14% from the same period in the prior year driven by contractual restructuring, rate progression, and burden of illness performance. Medical margin(1) for the quarter was $73.7 million, or $231 on a per-member basis. The results include the favorable impact of prior year development and payer settlements recognized in the quarter; excluding these items, medical margin for the quarter was $56.1 million. Net income was $3.0 million compared to a net loss of $44.2 million in the prior year quarter. Adjusted EBITDA(1) for the quarter was $25.8 million, or $81 PMPM. Revised Fiscal 2026 Guidance Full-year revised guidance reflects the impact of underlying first quarter performance, as well as the prior-year development and payer settlements recognized in the quarter. The foregoing 2026 outlook statement represents management's current estimate as of the date of this release. Actual results may differ materially depending on a number of factors. Investors are urged to read the "Cautionary Note Regarding Forward-Looking Statements" included in this release. Management does not assume any obligation to update these estimates. Management to Host Conference Call and Webcast on May 14, 2026 at 4:30 PM ET About P3 Health Partners (NASDAQ: PIII): P3 Health Partners Inc. is a leading population health management company committed to transforming healthcare by improving the lives of both patients and providers. Founded and led by physicians, P3 has an expansive network of more than 2,300 affiliated primary care providers across the country. Our local teams of health care professionals manage the care of thousands of patients in 26 counties across five states. P3 supports primary care providers with value-based care coordination and administrative services that improve patient outcomes and lower costs. Through partnerships with these local providers, the P3 care team creates an enhanced patient experience by navigating, coordinating, and integrating the patient’s care within the healthcare system. For more information, visit www.p3hp.org and follow us on LinkedIn and Facebook.com/p3healthpartners. Non-GAAP Financial Measures In addition to the financial results prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"), this press release contains certain non-GAAP financial measures as defined by the SEC rules, including Adjusted EBITDA and Adjusted EBITDA PMPM, medical margin, medical margin PMPM, and adjusted operating expense. EBITDA is defined as GAAP net income (loss) before (i) interest, (ii) income taxes and (iii) depreciation and amortization. Adjusted EBITDA is defined as EBITDA, further adjusted to exclude the effect of certain supplemental adjustments, such as (i) mark-to-market warrant gain/loss, (ii) premium deficiency reserves, (iii) equity-based compensation expense, (iv) certain transaction and other related costs and (v) certain other items that we believe are not indicative of our core operating performances. Adjusted EBITDA PMPM is defined as Adjusted EBITDA divided by the number of at-risk Medicare members each month divided by the number of months in the period. We believe these non‐GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other similar companies. Medical margin represents the amount earned from capitation revenue after medical claims expenses are deducted and medical margin PMPM is defined as medical margin divided by the number of Medicare members each month divided by the number of months in the period. Medical claims expenses represent costs incurred for medical services provided to our members. As our platform grows and matures over time, we expect medical margin to increase in absolute dollars; however, medical margin PMPM may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM. Adjusted operating expense is defined as total operating expense excluding depreciation and amortization and costs that management believes are non-core to the underlying operations of the Company, consisting of (i) medical expense, (ii) premium deficiency reserves, (iii) equity-based compensation, and (iv) certain other items that we believe are not indicative or our core operating performance. We do not consider these non‐GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non‐GAAP financial measures. In addition, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. The tables at the end of this press release present a reconciliation of Adjusted EBITDA, medical margin to gross profit, medical margin PMPM to gross profit PMPM, and adjusted operating expense to operating expense, which are the most directly comparable financial measures calculated in accordance with GAAP. Key Performance Metrics In addition to our GAAP and non-GAAP financial information, the Company also monitors "at-risk members" to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. At-risk membership represents the approximate number of Medicare members for whom we receive a fixed percentage of premium under capitation arrangements as of the end of a particular period. Cautionary Note Regarding Forward-Looking Statements This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "envision," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "pro-forma," "project," "seek," "should," "target," or "will," or the negative or other variations thereof, and similar words or phrases or comparable terminology, are intended to identify forward-looking statements. These forward-looking statements address various matters, including the Company’s future expected growth strategy and operating performance; and the Company’s ability to execute on its identified strategic improvement opportunities, all of which reflect the Company’s expectations based upon currently available information and data. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected or estimated and you are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, our ability to continue as a going concern; our potential need to raise additional capital to fund our existing operations or develop and commercialize new services or expand our operations; our ability to achieve or maintain profitability; our ability to maintain compliance with our debt covenants in the future, or obtain required waivers from our lenders if future operating performance were to fall below current projections, and if there are material changes to management’s assumptions, we could be required to recognize non-cash charges to operating earnings for goodwill and/or other intangible asset impairment; our ability to identify and develop successful new geographies, physician partners, payors and patients; changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to our services; our ability to fund our growth and expand our operations; changes in laws and regulations applicable to our business; our ability to maintain our relationships with health plans and other key payors; the impact of fluctuations in risk adjustments; our ability to establish and maintain effective internal controls; our ability to maintain compliance with California regulations related to financial solvency and operational performance; our ability to maintain the listing of our securities on Nasdaq; increased labor costs and medical expense; our ability to recruit and retain qualified team members and independent physicians; and the factors described under Part I, Item 1A. "Risk Factors" and Part II, Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 26, 2026, and in our subsequent filings with the SEC. All information in this press release is as of the date hereof, and we undertake no duty to update or revise this information unless required by law. You are cautioned not to place undue reliance on any forward-looking statements contained in this press release. View source version on businesswire.com: https://www.businesswire.com/news/home/20260514491279/en/ Contacts David Deuchler Investor Relations Gilmartin Group [email protected]

This article first appeared on GuruFocus. Release Date: May 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. P3 Health Partners Inc (NASDAQ:PIII) reported $26 million of adjusted EBITDA in Q1 2026, exceeding internal expectations. The company raised its full-year 2026 outlook due to strong Q1 performance and ongoing momentum. Significant improvements in payer contract structures have led to a 15% year-over-year increase in MA funding rates. Operational execution has improved, with a flat Q1 MA medical expense trend compared to a 7% trend in the industry. The company has strengthened its financial position by converting $250 million of debt to preferred equity, enhancing long-term balance sheet flexibility. Total at-risk membership declined from 118,000 in Q1 2025 to 106,000 in Q1 2026 due to deliberate portfolio actions. Despite improvements, the company still faces challenges in expanding delegation beyond the current 63% of membership. The company is managing a lower membership base, which could impact future revenue growth. There is ongoing variability in claims development and full-year cost expectations, which could affect financial outcomes. The company continues to face industry-wide challenges, such as the need for strong provider alignment and effective medical cost management. Warning! GuruFocus has detected 6 Warning Signs with PIII. Is PIII fairly valued? Test your thesis with our free DCF calculator. Q: Can you discuss the utilization trends observed in the first quarter, particularly regarding Parts A and B, and the expectations for Part D MLRs as the year progresses? A: Eric Kaufman, CEO, explained that they have significantly reduced Part D exposure and are continuing to do so. Leif, CFO, added that there was a notable reduction in Part B expenses, while Part A remained predominantly flat. Q: Could you break down the $18 million of positive prior year development (PYD) and payer settlements? Was any positive PYD reestablished back into reserves? A: Leif, CFO, clarified that 65% of the $17 million was related to favorable prior year development of reserves, and 35% was due to payer settlements. He confirmed that the disclosed amount flowed through the period, and they maintained consistency with their reserve methodology. Q: How do the recent financial results and conversion to preferred stock impact potential payer partnerships and expansion? A: Eric Kaufman, CEO, stated that demonstrating positive momentum and an improved balance sheet helps in growth prospects. A healthy balance sheet supports their strategy of expanding delegation, which improves cash flow and speeds up the timing of financial impacts. Q: What is the pathway to increase delegation beyond the current 63%? A: Eric Kaufman, CEO, mentioned that they have a glide path to achieve delegation with payers in certain geographies. This involves pre-delegation audits and testing, and they expect to stair-step this process over the next two years. Q: How do you plan to sustain the positive financial trajectory for the rest of 2026? A: Eric Kaufman, CEO, emphasized that the structural work, clinical model, and operational processes are producing results. They are focused on sustaining execution and have raised their full-year outlook, with improved predictability and operating fundamentals. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management characterizes Q1 2026 as a fundamental inflection point resulting from a two-year framework of contract restructuring and market optimization. Performance was driven by a 15% year-over-year improvement in Medicare Advantage funding rates, achieved through redesigned risk funding and cost accountability structures. The company reported a nearly flat medical cost trend, significantly outperforming the industry average of 7% or higher, attributed to Tier 1 provider concentration and delegated utilization management. Strategic focus has shifted toward 'delegation-oriented growth,' where P3 controls claims payment and care management to improve data transparency and cash flow timing. The organization has exited underperforming arrangements to concentrate membership in relationships where the P3 model demonstrates the highest economic performance. Management notes that the current macro environment, including CMS benchmark updates and industry-wide benefit rationalization, favors their local market operating model. Full-year 2026 adjusted EBITDA guidance was raised to a range of $20 million to $60 million, reflecting confidence in the underlying operating trajectory. The company plans to expand delegated functions beyond the current 63% of membership, targeting a two-year 'stair-stepped' glide path for markets currently under limited delegation. Future growth will prioritize markets with clear pathways toward deeper delegation and long-term partnership stability rather than pursuing scale alone. Guidance assumes continued execution against medical cost initiatives and normal variability in claims development throughout the remainder of the year. Management expects the P3 Restore program and high-risk clinical support systems to continue ramping up, further supporting quality and cost management goals. Q1 results included $17 million of favorable prior-year development and payer settlements, which accounted for a significant portion of the $26 million adjusted EBITDA. A strategic capital transaction on April 28th converted approximately $250 million of debt into preferred equity to address NASDAQ minimum stockholders' equity requirements. The company secured an agreement to issue up to $70 million in additional preferred equity, with $30 million already issued to date to strengthen the balance sheet. Total lives under management reached approximately 135,000, including 29,000 lives under new management service arrangements like the Nebraska partnership. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted a larger proactive reduction in Part B costs for 2026 compared to 2025, while Part A remained predominantly flat. The company is actively reducing its Part D exposure in all contracts beyond 2026 to mitigate risk from members hitting out-of-pocket maximums. The $17 million benefit was split approximately 65% from favorable prior-year reserve development and 35% from payer settlements. Management confirmed they did not reduce internal reserve pads or IBNR estimates, maintaining a consistent methodology despite the favorable development. CEO Aric Coffman stated that the improved balance sheet and positive momentum help attract new prospects and support the expansion of delegated functions. Delegation is viewed as a critical lever for speeding up the realization of surplus dollars and improving overall business cash flow.