The following is a summary of the Astrana Health, Inc. (ASTH) Q3 2024 Earnings Call Transcript:
Financial Performance:
Astrana Health reported a Q3 2024 revenue of $478.7 million, a 37% increase from the previous year.
Adjusted EBITDA for Q3 was $45.2 million, reflecting a 13% decrease from the prior year, attributed to timing differences in incentive dollars and ACO reach performance.
Net income for Q3 was $16.1 million, down 27% from the prior year, influenced by similar timing differences.Year-to-date adjusted EBITDA grew by 15%, reaching $135.3 million from $117.6 million in the previous year.
Business Progress:
Astrana Health's membership reached approximately 1 million as of September 30, with the company adding over 200 primary care providers and over 900 specialists to its network.
Their full risk business now comprises about 61% of total capitation revenue, up from 46% in the previous year, on track to reach around two-thirds by January 1, 2025.
Acquired Collaborative Health Systems, expanding their reach to about 1.1 million patients across 12 states in value-based care setups.
Opportunities:
The acquisition and integration of Collaborative Health Systems are expected to contribute approximately $450 million in revenue for full year 2025 and reach a breakeven adjusted EBITDA by year-end 2025.
Proposition 35 in California, boosting pay for doctors serving Medi-Cal patients, is seen as a positive influence, allowing Astrana Health to continue their expansion and service enhancement in California.
Risks:
The company noted variations in medical cost trends across business lines, with Medicaid seeing a higher cost trend than expected due to a rate mismatch from Medicaid redetermination, a situation they anticipate will normalize eventually.
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