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目录
美国
证券交易委员会
华盛顿特区20549
_______________________________________________________
表格 10-Q
_______________________________________________________
（标记一）
x根据1934年证券交易法第13或15(d)条款的季度报告。
截至季度结束日期的财务报告2024年9月30日
或者
o根据1934年证券交易法第13或15(d)节的转型报告书
过渡期从           到           
佣金文件号 001-40332
_______________________________________________________
爱可隆健康公司
(根据其章程规定的注册人准确名称)
特拉华州37-1915147
（国家或其他管辖区的
公司成立或组织）
（IRS雇主
唯一识别号码）
6210 E Hwy 290, 450号套房
奥斯汀, TX 78723
，（主要行政办公地址）
(562) 256-3800
(注册人电话号码，包括区号)
（前名称、地址及财政年度，如果自上次报告以来有更改）
在法案第12(b)条的规定下注册的证券：
每一类的名称交易标的在其上注册的交易所的名称
普通股，每股面值$0.01
AGL
请使用moomoo账号登录查看New York Stock Exchange
_______________________________________________________
请勾选以下选项以指示注册人是否在过去12个月内(或在注册人需要提交此类报告的较短时间内)已提交证券交易法1934年第13或15(d)条所要求提交的所有报告，并且在过去90天内已受到此类报告提交要求的影响。Yes x 不 o
请在检查标记上指示是否在过去的12个月内（或者在注册人需要提交这些文件的更短时间内）按规定s-t法规（本章第232.405节）的第405条要求提供的每个互动数据文件都已通过电子方式提交。 Yes x 否 o
请用复选标记表示注册人是大型加速报告人、加速报告人、非加速报告人、较小的报告公司或新兴增长公司。请参阅《交易所法》第120亿.2规定中“大型加速报告人”、“加速报告人”、“较小的报告公司”和“新兴增长公司”的定义。
大型加速存取器
x加速存取器o
非加速申报人o较小报告公司o
  新兴成长公司o
如果是新兴成长型企业，请勾选复选标记，表明注册者已选择不使用延长过渡期来符合根据证券交易法第13(a)条规定提供的任何新财务会计准则。 o
用复选标记表明注册人是否为空壳公司（定义见《交易法》第 120亿条.2 条）是 o 没有 x
2024年11月1日，有 412,017,845 注册人名义价值$0.01每股普通股的股份已发行。

目录
爱可隆健康公司
指数
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
 
 
  
2
目录
第一部分 财务信息
项目1.基本报表
爱可隆健康公司
简明合并资产负债表
（以千元为单位，除每股数据外）
 九月三十日
2024		十二月 31,
2023
 （未经审计）   
资产
流动资产：
现金和现金等价物$148,161 $107,570 
限制性现金及等价物5,629 6,759 
有价证券244,766 380,773 
应收账款，净额1,368,349 942,461 
预付费用和其他流动资产，净额44,854 42,513 
流动资产总额1,811,759 1,480,076 
财产和设备，净额28,194 27,576 
无形资产，净额73,412 63,769 
善意24,133 24,133 
其他资产153,913 145,312 
总资产$2,091,411 $1,740,866 
负债和股东权益（赤字）
流动负债：
医疗索赔和相关应付账款$1,190,665 $737,724 
应付账款、应计费用和其他218,492 239,432 
流动负债总额1,409,157 977,156 
长期债务，扣除流动部分34,884 32,308 
其他负债72,498 70,381 
负债总额1,516,539 1,079,845 
承付款和意外开支
股东权益（赤字）：
普通股，$0.01 面值： 2,000,000 已获授权的股份； 411,960 和 406,387 分别已发行和流通的股份
4,120 4,064 
额外的实收资本2,051,638 1,986,899 
累计赤字(1,481,187)(1,326,826)
累计其他综合收益（亏损）301 (2,298)
agilon Health, Inc. 股东权益总额（赤字）574,872 661,839 
非控股权益— (818)
股东权益总额（赤字）574,872 661,021 
负债和股东权益总额（赤字）$2,091,411 $1,740,866 
简明综合资产负债表包括债务变量实体（“VIEs”）的资产和负债，如agilon health，inc.及其附属公司和VIEs（“公司”）是这些VIE的主要受益人。 简明综合资产负债表包括总资产，只能用于清偿公司的VIE的债务，截至2024年9月30日和2023年12月31日，分别合计$1.53亿美元和1.07十亿美元，以及公司的VIE的总负债，债权人不能追索公司的主要受益人的总信用，分别为2024年9月30日和2023年12月31日$1.39亿美元和930.6百万。 有关详细信息，请参阅附注14。
请参见附注的简明合并财务报表。
3
目录
爱可隆健康公司
简明合并利润表
（以千计，每股数据除外）
(未经审计)
 三个月结束
九月30日,		九个月结束
九月30日,
 2024202320242023
营收：
医疗服务营业收入$1,447,697 $1,133,457 $4,528,471 $3,253,810 
其他营业收入3,235 3,406 9,573 6,480 
总收入1,450,932 1,136,863 4,538,044 3,260,290 
费用：
医疗服务费用1,505,950 1,022,871 4,323,852 2,853,266 
其他医疗费用9,149 77,153 171,096 242,486 
一般和行政费用（包括非现金股权补偿费用$13,259, $20,619, $48,375在截至2024年4月30日和2023年10月31日的三个和六个月中，公司分别记录了2,055美元和4,621美元的利息费用。53,650）
63,123 72,058 209,157 221,064 
折旧和摊销6,218 4,075 17,969 11,308 
总支出1,584,440 1,176,157 4,722,074 3,328,124 
营业收支（亏损）(133,508)(39,294)(184,030)(67,834)
其他收入（支出）：
股权法投资收益（损失）2,047 14,659 17,686 24,507 
其他收入（费用）净额16,061 5,423 26,794 20,402 
利息支出(1,622)(1,617)(4,603)(4,665)
税前收益（亏损）(117,022)(20,829)(144,153)(27,590)
所得税效益(费用)590 (1,210)306 (524)
持续经营利润（损失）(116,432)(22,039)(143,847)(28,114)
终止经营：
销售获利（损失）前的收入（亏损）(1,183)(9,444)(1,701)(4,205)
资产销售盈(损)净额— — (8,763)— 
停止经营的总计(1,183)(9,444)(10,464)(4,205)
(117,615)(31,483)(154,311)(32,319)
非控制利益在收益（亏损）中的份额— 47 (50)156 
净利润（亏损）归属于普通股$(117,615)$(31,436)$(154,361)$(32,163)
 
普通股每股净收益（亏损）基本和摊薄
持续经营业务$(0.29)$(0.06)$(0.35)$(0.07)
已停止运营的业务$— $(0.02)$(0.03)$(0.01)
加权平均股数
Basic411,591405,787410,604412,077
Diluted411,591405,787410,604412,077
请参见附注的简明合并财务报表。
4
目录
爱可隆健康公司
基本报表综合损益表
（以千为单位）
(未经审计)
 三个月截止
9月30日,		九个月结束
9月30日,
 2024202320242023
$(117,615)$(31,483)$(154,311)$(32,319)
其他全面收益（损失）：  
可变现证券市场未实现收益（损失），税后净额2,736 114 2,604 (758)
外币翻译调整12 25 (5)88 
总综合收益（损失）(114,867)(31,344)(151,712)(32,989)
归属于非控股权益的综合收益（损失）— 47 (50)156 
归属于agilon health, inc.的综合收益（损失）总额。$(114,867)$(31,297)$(151,762)$(32,833)
请参见附注的简明合并财务报表。
5
目录
爱可隆健康公司
股东权益（赤字）基本汇总报表
（以千为单位）
(未经审计)
在截至 2024 年 9 月 30 日的三个月中：
基本报表中的总股东权益（赤字）
普通股共计
实收资本
资本 		累计
赤字		累计其他综合收益
税前 		在附属公司中的非控制利益
利息 		总计
股东的
股东权益
(赤字)
假设本说明书所涵盖的所有普通股均已出售完成，在2023年11月29日发行和流通的普通股数量的基础之上，假设所有股票均购买，假定销售股东将拥有的所有已发行普通股的百分比金额
2024年7月1日411,447$4,114 $2,038,540 $(1,363,572)$(2,447)$(768)$675,867 
— — — (117,615)— — (117,615)
其他综合收益（损失）— — — — 2,748 — 2,748 
行使股票期权32— 132 — — — 132 
受限制股票单位解除限制5497 (7)— — — — 
与净股份结算相关的股份被扣留(68)(1)(286)— — — (287)
股票补偿费用—— 13,259 — — — 13,259 
部分拥有实体的解散—— — — — 768 768 
2024年9月30日411,960$4,120 $2,051,638 $(1,481,187)$301 $— $574,872 
截至2023年9月30日三个月的情况：
股东权益总额（赤字）
普通股额外
付费
资本		累积的
赤字 		累积其他综合版
收入（亏损） 		非控制性
兴趣爱好 		总计
股东
股权
（赤字）
股票金额
2023年7月1日405,427$4,054 $1,947,438 $(1,064,957)$(6,369)$(720)$879,446 
净收益（亏损）— — — (31,436)— (47)(31,483)
其他综合收益（亏损）— — — — 139 — 139 
行使股票期权4245 2,718 — — — 2,723 
限制性股票单位的归属1321 (1)— — — — 
与净股份结算相关的扣留股份(3)— (63)— — — (63)
普通股回购—— 102 — — — 102 
股票薪酬支出—— 20,736 — — — 20,736 
2023 年 9 月 30 日405,980$4,060 $1,970,930 $(1,096,393)$(6,230)$(767)$871,600 

6
目录
爱可隆健康公司
股东权益（赤字）基本汇总报表
（以千为单位）
(未经审计)
截至2024年9月30日的九个月：
股东权益总额（赤字）
普通股额外
付费
资本 		累积的
赤字 		累积其他综合版
收入（亏损） 		非控制性
利息 		总计
股东
公平
（赤字）
股份 金额
2024年1月1日406,387$4,064 $1,986,899 $(1,326,826)$(2,298)$(818)$661,021 
净收益（亏损）— — — (154,361)— 50 (154,311)
其他综合收益（亏损）— — — — 2,599 — 2,599 
行使股票期权1,50815 2,743 — — — 2,758 
限制性股票单位的归属2,40924 (24)— — — — 
与净股份结算相关的扣留股份(318)(3)(1,565)— — — (1,568)
普通股的发行1,97420 15,210 — — — 15,230 
股票薪酬支出—— 48,375 — — — 48,375 
解散部分拥有的实体—— — — — 768 768 
2024 年 9 月 30 日411,960$4,120 $2,051,638 $(1,481,187)$301 $— $574,872 
截至2023年9月30日的九个月：
股东权益总额（赤字）
普通股额外
付费
资本 		累积的
赤字 		累积其他综合版
收入（亏损） 		非控制性
利息 		总计
股东
公平
（赤字）
股份 金额
2023年1月1日412,385$4,124 $2,106,886 $(1,064,230)$(5,560)$(611)$1,040,609 
净收益（亏损）— — — (32,163)— (156)(32,319)
其他综合收益（亏损）— — — — (670)— (670)
行使股票期权2,69127 13,241 — — — 13,268 
限制性股票单位的归属5846 (6)— — — — 
与净股份结算相关的扣留股份(65)(1)(1,805)— — — (1,806)
普通股回购(9,615)(96)(201,366)— — — (201,462)
股票薪酬支出—— 53,980 — — — 53,980 
2023 年 9 月 30 日405,980$4,060 $1,970,930 $(1,096,393)$(6,230)$(767)$871,600 
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目录
爱可隆健康公司
现金流量表简明综合报表
（以千为单位）
(未经审计)
 截至9月30日的九个月
 20242023
来自经营活动的现金流：
净收益（亏损）$(154,311)$(32,319)
为将净收益（亏损）与经营活动中使用的净现金进行对账而进行的调整：
折旧和摊销17,969 15,014 
股票薪酬支出48,375 53,980 
权益法投资的损失（收益）(17,686)(24,507)
权益法投资收益的分配3,340 — 
出售资产（收益）亏损，净额3,784 — 
其他非现金物品(491)(1,511)
运营资产和负债的变化：24,824 (105,690)
由（用于）经营活动提供的净现金(74,196)(95,033)
来自投资活动的现金流：
购买财产和设备(9,985)(11,898)
购买无形资产(18,877)(3,535)
投资应收贷款和其他贷款(9,742)(8,778)
对有价证券的投资(12,006)(107,020)
有价证券和其他证券到期的收益166,828 133,894 
企业合并中支付的净现金— (44,479)
由（用于）投资活动提供的净现金116,218 (41,816)
来自融资活动的现金流：
股票发行的收益，净额1,189 11,462 
普通股回购— (200,000)
偿还长期债务(3,750)(3,750)
由（用于）融资活动提供的净现金(2,561)(192,288)
现金、现金等价物和限制性现金及等价物的净增加（减少）39,461 (329,137)
来自持续经营业务的现金、现金等价物和限制性现金及等价物，期初114,329 475,912 
期初来自已终止业务的现金、现金等价物和限制性现金及等价物— 31,768 
现金、现金等价物和限制性现金及等价物，期初114,329 507,680 
来自持续经营业务的现金、现金等价物和限制性现金及等价物，期末153,790 169,660 
来自已终止业务的现金、现金等价物和限制性现金及等价物，期末— 8,883 
现金、现金等价物和限制性现金及等价物，期末$153,790 $178,543 
请参见附注的简明合并财务报表。
8
目录
爱可隆健康公司
简明财务报表注解
(未经审计)
注意 1. 业务
业务描述
Agilon Health, Inc. 通过其伙伴关系和平台，为现有的医生集团提供了必要的能力、资本和业务模式，以创建一个以医疗保险为中心、全球性的事业线。截至2024年9月30日，该公司通过其签约的医生网络，向约$ Medicare Advantage会员提供护理。 525,200 2024年1月1日起，该公司将其业务拓展至：(i) 肯塔基州列克星敦和 (ii) 乔治亚州奥古斯塔，并与该公司现有的德克萨斯州、宾夕法尼亚州和密西根州市场进行了额外的合作伙伴关系。此外，从2024年1月1日开始，该公司开始参与美国康哲（CMS）的医疗保险共享储蓄计划（“MSSP”），并通过其权益法投资参与了责任护理组织实现权益、获得准入和社区健康（“ACO REACH”）模式，（统称为“CMS ACO模式”）
有关公司与VIEs有关的更多讨论，请参阅附注14。
公司最大的股东是与Clayton Dubilier & Rice, LLC（“CD&R”）关联的投资基金。所有与CD&R有关的基金被视为关联方。
注2. 重大会计政策摘要
报告范围
附注的简明合并基本报表是由管理层按照美国通用会计准则（"U.S. GAAP"）编制的。简明合并基本报表包括agilon health, inc.及其全资子公司，以及通过表决权或其他方式控制的合营企业和VIEs的账户。合并时已消除企业间的交易和余额。所做的所有调整（一般性递延调整除外，除非另有说明）已包括在内，公司认为这是必要的，以公平呈现其财务状况、经营业绩和现金流量。 2024年9月30日结束的三个月和九个月的营运结果并不能作为2024年12月31日终了年度可能预期结果的指标。附注的简明合并财务信息应与2023年12月31日终了年度的合并财务报表和相关说明一起阅读，这些信息包含在公司向证券交易委员会提交的10-k表格中。
使用估计
管理层在编制财务报表时需要进行估计和假设。这些估计和假设会影响在编制简明综合财务报表日期时资产和负债的申报金额，以及披露的或存在的资产和负债，以及在报告期间收入和费用的申报金额。重要的估计包括，但不限于，用于确定营业收入及相关应收款、医疗服务费用及相关应付款（包括计提但尚未报告的索赔准备金），以及长期资产、商誉和无形资产（在企业合并中获取和减值分析）的估值。 管理层对营业收入确认、医疗服务费用和其他估计、判断和假设的估计结果可能与实际结果有重大和不利的差异。 这些估计是基于当前事件和预期未来事件的知识，因此，实际结果最终可能会与这些估计有重大不同。
Property and Equipment
As of September 30, 2024 and December 31, 2023, the Company’s gross carrying amount of property and equipment was $50.1 million and $41.9 million, with accumulated depreciation of $21.9 million and $14.3 million, respectively. For the three months ended September 30, 2024 and 2023, the Company recognized $3.1 million and $2.1 million, respectively, in depreciation expense, which is included in depreciation and amortization expense in the condensed
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consolidated statements of operations. For the nine months ended September 30, 2024 and 2023, the Company recognized $8.9 million and $5.6 million, respectively, in depreciation expense, which is included in depreciation and amortization expense in the condensed consolidated statements of operations.
Income Taxes
The Company determines the income tax provision for interim periods using an estimate of the Company’s annual effective tax rate, applied to year-to-date results, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimated annual effective tax rate, and if the estimated annual effective tax rate changes, a cumulative catch-up adjustment is recorded in that quarter. The Company applied the intra-period tax allocation rules to allocate income taxes between continuing operations and discontinued operations as prescribed in U.S. GAAP, where the tax effect of income (loss) before income taxes from continuing operations is computed without regard to the tax effects of income (loss) before income taxes from the other categories.
Recent Accounting Pronouncements
In November of 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which amends certain reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. Additionally, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendments in ASU 2023-07 are required to be applied retrospectively to all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of ASU 2023-07 on the disclosures in its condensed consolidated financial statements.
In December of 2023, the FASB issued ASU 2023-09, Income Taxes—Improvements to Income Tax Disclosures (“ASU 2023-09”), which amends certain disclosure requirements related to income taxes. The amendments in ASU 2023-09 require public business entities on an annual basis to: (i) disclose specific categories in the rate reconciliation and (ii) provide additional information for reconciling items that meet a quantitative threshold. The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. The amendments in ASU 2023-09 can be applied on a prospective basis or retrospective application. Early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of ASU 2023-09 on the disclosures in its condensed consolidated financial statements.
NOTE 3. Revenue, Receivables, and Concentration of Credit Risk
Medical Services Revenue
Medical services revenue consists of capitation fees under contracts with various Medicare Advantage payors (“payors”). Under the typical capitation arrangement, the Company is entitled to monthly per-member, per-month (“PMPM”) fees to provide a defined range of healthcare services for Medicare Advantage health plan members (“members”) attributed to the Company’s contracted primary care physicians. PMPM fees are determined as a percent of the premium payors receive from CMS for these members. The Company generally accepts full financial risk for members attributed to its contracted primary care physicians and therefore is responsible for the cost of all healthcare services required by those members. Fees are generally recorded gross in revenue because the Company is acting as a principal in coordinating and controlling the range of services provided (other than clinical decisions) under its capitation contracts with payors. Capitation contracts with payors are generally multi-year arrangements and have a single performance obligation that constitutes a series, as defined by Accounting Standards Codification (“ASC”) 606, Revenue From Contracts With Customers (“ASC 606”), to stand ready on a monthly basis to provide all aspects of necessary medical care to members for the contracted period. The Company recognizes revenue in the month in which eligible members are entitled to receive healthcare benefits during the contract term.
The transaction price for the Company’s capitation contracts is variable, as the PMPM fees to which the Company is entitled are subject to periodic adjustment under CMS’s risk adjustment payment methodology. CMS deploys a risk adjustment model that determines premiums paid to all payors according to each member’s health status and certain demographic factors. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using
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diagnosis data from various settings. The Company and healthcare providers collect and submit the necessary and available diagnosis data to payors and such data is utilized by the Company to estimate risk adjustment payments to be received in subsequent periods. Risk adjustment-related revenues are estimated using the most likely amount methodology and amounts are only included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. PMPM fees are also subject to adjustment for incentives or penalties based on the achievement of certain quality metrics defined in the Company’s contracts with payors. The Company recognizes incentive revenue as earned using the most likely amount methodology and only to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved.
Neither the Company nor any of its affiliates is a registered insurance company because state law in the states in which it operates does not require such registration for risk-bearing providers.
Receivables
Receivables primarily consist of amounts due under capitation contracts with various payors. Receivables due under capitation contracts are recorded monthly based on reports received from payors and management’s estimate of risk adjustment payments to be received in subsequent periods for open performance years. Receivables are recorded at the amount expected to be realized.
Concentration
The Company contracts with various payors whereby the Company is entitled to monthly PMPM fees to provide a defined range of healthcare services for members attributed to its contracted primary care physicians. The Company generally accepts full financial risk for such members and therefore is responsible for the cost of all healthcare services required by them. Substantially all of the Company’s receivable balances are from a small number of payors. Revenue from Medicare Advantage payors constitutes substantially all of the Company’s total revenue for the three and nine months ended September 30, 2024 and 2023.
The following table provides the Company’s revenue concentration with respect to major payors as a percentage of the Company’s total revenues:
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2024202320242023
Payor A20 %22 %21 %21 %
Payor B20 %15 %18 %16 %
Payor C11 %15 %10 %14 %
Payor D*11 %*11 %
___________________________________________
*Less than 10% of total revenues.
The following table provides the Company’s concentration of credit risk with respect to major payors as a percentage of receivables, net:
 September 30,
2024		December 31,
2023
Payor A*13 %
Payor B16 %11 %
Payor C10 %*
Payor D12 %21 %
___________________________________________
*Less than 10% of total receivables.

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NOTE 4. Marketable Securities and Fair Value Measurements
Marketable Securities
The following table summarizes the Company’s marketable securities (in thousands):
 September 30, 2024December 31, 2023
 Amortized CostGross Unrealized GainsGross Unrealized Losses Fair ValueAmortized CostGross Unrealized GainsGross Unrealized Losses Fair Value
Marketable securities:
Corporate debt securities$131,082 $186 $(399)$130,869 $234,821 $180 $(1,604)$233,397 
U.S. Treasury notes113,457 622 (182)113,897 138,329 261 (1,206)137,384 
Other— — — — 10,000 — (8)9,992 
 $244,539 $808 $(581)$244,766 $383,150 $441 $(2,818)$380,773 
For the three months ended September 30, 2024, the Company recognized total interest income of $4.6 million, of which $3.1 million was related to its marketable securities investments and $1.5 million was related to interest on cash and cash equivalent balances. For the three months ended September 30, 2023, the Company recognized total interest income of $6.1 million, of which $4.9 million was related to its marketable securities investments and $1.2 million was related to interest on cash and cash equivalent balances. For the nine months ended September 30, 2024, the Company recognized total interest income of $14.9 million, of which $10.3 million was related to its marketable securities investments and $4.6 million was related to interest on cash and cash equivalent balances. For the nine months ended September 30, 2023, the Company recognized total interest income of $21.3 million, of which $14.6 million was related to its marketable securities investments and $6.7 million was related to interest on cash and cash equivalent balances.
The following table summarizes the Company’s marketable securities maturity as of September 30, 2024 (in thousands):
YearAmortized CostFair Value
2024$12,940 $12,905 
2025177,628 177,224 
202653,971 54,637 
 $244,539 $244,766 
The following table summarizes the Company’s marketable securities with gross unrealized losses by security type aggregated by the length of time the investments have been in a continuous unrealized loss position as of September 30, 2024 (in thousands):
Less Than 12 Months12 Months or Greater
Fair ValueGross Unrealized Losses Fair ValueGross Unrealized Losses
Marketable securities:
Corporate debt securities$— $— $86,291 $399 
U.S. Treasury notes12,417 6 51,580 176 
$12,417 $6 $137,871 $575 

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The following table summarizes the Company’s marketable securities with gross unrealized losses by security type aggregated by the length of time the investments have been in a continuous unrealized loss position as of December 31, 2023 (in thousands):
Less Than 12 Months12 Months or Greater
Fair ValueGross Unrealized Losses Fair ValueGross Unrealized Losses
Marketable securities:
Corporate debt securities$55,343 $167 $126,189 $1,437 
U.S. Treasury notes37,486 303 75,980 903 
Other9,992 8 — — 
$102,821 $478 $202,169 $2,340 
The Company’s unrealized losses from marketable securities as of September 30, 2024 and December 31, 2023 were caused primarily by interest rate increases. The Company does not intend to sell marketable securities that are in an unrealized loss position, and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity. There was no allowance for credit losses on available-for-sale marketable securities at September 30, 2024 or December 31, 2023.
Fair Value Measurements
The Company’s financial instruments consist of cash and cash equivalents, restricted cash and cash equivalents, marketable securities, receivables, other liabilities, accounts payable, certain accrued expenses, and borrowings which consist of a term loan and a revolving credit facility. The carrying values of the financial instruments classified as current in the consolidated balance sheets approximate their fair values due to their short-term maturities. The Company's cash and cash equivalents are classified within Level 1 of the fair value hierarchy. The Company may be required, from time to time, to measure its loans to physician partner groups, primarily in connection with taxes payable on shares distributed to them upon completion of the Company's initial public offering ("IPO"), at fair value on a nonrecurring basis. Such measurements are classified within Level 2 of the fair value hierarchy. The carrying values of the term loan and revolving credit facility are a reasonable estimate of fair value because the interest rates on such borrowings approximate market rates as of the reporting date. Such borrowings are classified within Level 2 of the fair value hierarchy. During the three and nine months ended September 30, 2024 and 2023, there were no material transfers of financial assets or liabilities within the fair value hierarchy.
The Company measures and discloses the fair value of nonfinancial and financial assets and liabilities utilizing a hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy:
•Level 1—quoted prices for identical instruments in active markets;
•Level 2—quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
•Level 3—fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
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The table below summarizes the Company’s financial instruments measured at fair value on a recurring basis (in thousands):
 September 30, 2024December 31, 2023
 Level 1Level 2Level 3Level 1Level 2Level 3
Marketable securities:
Corporate debt securities$— $130,869 $— $— $233,397 $— 
U.S. Treasury notes113,897 — — 137,384 — — 
Other— — — 9,992 — — 
 $113,897 $130,869 $— $147,376 $233,397 $— 
NOTE 5. Other Assets
The following table summarizes the Company’s other assets (in thousands):
 September 30,
2024		December 31,
2023
Loans to physician partners$70,852 $71,862 
Health plan deposits2,051 2,051 
Equity method investments(1)
53,945 44,753 
Right-of-use lease assets11,497 13,411 
Other15,568 13,235 
 $153,913 $145,312 
___________________________________________
(1)See Note 14 for additional discussion related to the Company's equity method investments.
Loans to Physician Partners
Loans to physician partners primarily represent loans in connection with taxes payable on shares distributed to them in connection with the IPO. These loans mature between 2026 and 2031 with nominal interest compounding annually and no prepayment penalties. Such loans are stated at the amount expected to be collected.
NOTE 6. Medical Claims and Related Payables
Medical services expense represents costs incurred for medical services provided to members by physicians, hospitals and other ancillary providers for which the Company is financially responsible and are paid by payors with whom the Company has contracted. Medical services expenses are recognized in the period in which services are provided and include estimates of claims that have been incurred but have either not yet been received, processed, or paid and as such, not reported.
Such estimates are developed using actuarial methods commonly used by health insurance actuaries that include a number of factors and assumptions including medical service utilization trends, changes in membership, observed medical cost trends, historical claim payment patterns and other factors. Generally, for the most recent months, the Company estimates claim costs incurred by applying observed medical cost trend factors to the average PMPM medical costs incurred in prior months for which more complete claims data are available.
Each period, the Company re-examines previously established medical claims payable estimates based on actual claim submissions and other changes in facts and circumstances. As more complete claims information becomes available, the Company adjusts its estimates and recognizes those changes in estimates in the period in which the change is identified. The difference between the estimated liability and the actual settlements of claims is recognized in the period the claims are settled. The Company’s medical claims payable balance represents management’s best estimate of its liability for unpaid medical costs as of September 30, 2024 and 2023. The Company uses judgment to determine the appropriate assumptions for developing the required estimates.
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The following table presents the components of changes in medical claims and related payables (in thousands):
 September 30,
 20242023
Medical claims and related payables, beginning of the year$723,071 $339,748 
Components of incurred costs related to:
Current year4,291,930 2,805,538 
Prior years31,922 47,728 
Discontinued operations - current year— 226,963 
Discontinued operations - prior years— 5,728 
 4,323,852 3,085,957 
Claims paid related to:
Current year(3,158,273)(1,860,249)
Prior years(709,936)(338,045)
Discontinued operations - current year— (185,755)
Discontinued operations - prior years— (49,116)
 (3,868,209)(2,433,165)
Medical claims and related payables, end of the period$1,178,714 $992,540 
Medical claims and related payables also include $12.0 million and $14.7 million, as of September 30, 2024 and December 31, 2023, respectively, that is recoverable from other parties under risk sharing arrangements and is presented as prepaid expenses and other current assets, net in the condensed consolidated balance sheets.
NOTE 7. Other Liabilities
The following table summarizes the Company’s other liabilities (in thousands):
 September 30,
2024		December 31,
2023
Other long-term contingencies$49,000 $49,000 
Lease liabilities, long-term9,018 10,905 
Equity method liabilities – CMS ACO Models5,784 1,199 
Other8,696 9,277 
 $72,498 $70,381 
As of both September 30, 2024 and December 31, 2023, the Company’s accruals for contingent liabilities related to unasserted claims were $49.0 million. The accrued amounts represent the Company’s estimate of probable losses in accordance with ASC Topic 450, Contingencies.
See Note 14 for equity method liabilities related to the Company's CMS ACO Models investments.
NOTE 8. Debt
On February 18, 2021, the Company executed a credit facility agreement (as amended by the First Amendment to Credit Agreement, dated as of March 1, 2021 and the Second Amendment to Credit Agreement, dated as of May 25, 2023, the “Credit Facility”). The Credit Facility includes: (i) a $100.0 million secured term loan (the “Secured Term Loan Facility”) and (ii) a $100.0 million senior secured revolving credit facility (the “Secured Revolving Facility”) with a capacity to issue standby letters of credit in certain circumstances up to a maximum of $100.0 million. Subject to specified conditions and receipt of commitments, the Secured Term Loan Facility may be expanded (or a new term loan facility, revolving credit facility or letter of credit facility added) by up to (i) $50.0 million plus (ii) an additional amount
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determined in accordance with a formula tied to repayment of certain of the Company’s indebtedness. The maturity date of the Credit Facility is February 18, 2026.
As of September 30, 2024, the Company had $35.0 million outstanding under the Secured Term Loan Facility and availability under the Secured Revolving Facility was $37.3 million, as the Company had outstanding letters of credit totaling $62.7 million. The standby letters of credit are automatically extended without amendment for one-year periods, unless the Company notifies the institution in advance of the expiration date that the letter will be terminated. No amounts have been drawn on the outstanding letters of credit as of September 30, 2024.
Effective with the Second Amendment to Credit Agreement on May 25, 2023, the Company transitioned to the Secured Overnight Financing Rate ("SOFR") as a benchmark interest rate used in the Credit Agreement. At the Company’s option, borrowings under the Credit Agreement can be either: (i) SOFR Rate Loans, (ii) Daily Simple SOFR Rate Loans, or (iii) Base Rate Loans. Daily Simple SOFR Rate Loans and SOFR Rate Loans bear interest at a rate equal to the sum of 3.50% and the higher of (a) SOFR, as defined in the credit agreement, and (b) 0%. Base Rate Loans bear interest at a rate equal to the sum of 2.50% and the highest of: (a) 0.50% in excess of the overnight federal funds rate, (b) the prime rate established by the administrative agent from time to time, (c) the one-month SOFR rate (adjusted for maximum reserves) plus 1.00% and (d) 0%. Additionally, the Company pays a commitment fee on the unfunded Secured Revolving Facility amount of 0.375%. The Company must also pay customary letter of credit fees. As of September 30, 2024, the effective interest rate on the Secured Term Loan Facility was 9.356%.
The Credit Facility is guaranteed by certain of the Company’s subsidiaries, including those identified as VIEs, and contain customary covenants including, among other things, limitations on restricted payments including: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios. Failure to meet any of these covenants could result in an event of default under the Credit Agreement. If an event of default occurs, the lenders could elect to declare all amounts outstanding under the Credit Agreement to be immediately due and payable. The Company was in compliance with all covenants under the Credit Facilities.
As of both September 30, 2024 and December 31, 2023, the Company had $25.1 million outstanding surety bonds related to health plan payor risk-bearing capital contributions.
NOTE 9. Commitments and Contingencies
Legal Proceedings
From time to time, the Company is a party to, or has a significant relationship to, legal proceedings, lawsuits, and other claims that arise in the ordinary course of the Company's business. Except as described in this Note 9, the Company is not aware of any other legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company's business, prospects, financial condition, results of operations or cash flows. The Company’s policy is to expense legal costs as they are incurred.
In February and March 2024, three class action lawsuits were filed and later consolidated as one matter captioned In re agilon health, inc. Securities Litigation, 1:24-cv-00297 (W.D. Tex.) (the “Consolidated Securities Matter”). The Consolidated Securities Matter names the Company and certain current and former members of the Company’s executive team and Board of Directors as defendants, among others. The Consolidated Securities Matter generally asserts securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended and under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, as amended, in connection with statements made between April 2021 and February 2024 in the Company’s annual and quarterly reports and earnings releases related to, among other things, the Company’s financial guidance, medical margin and Adjusted EBITDA results, growth strategy, and data management. The Consolidated Securities Matter seeks compensatory damages, judgment interest, attorney’s fees and costs, and other unspecified equitable and/or injunctive relief. The Company is unable to estimate any ultimate individual or aggregate amount of monetary liability or financial impact due to the early stages of the litigation.
In May and October 2024, two putative stockholder derivative class action lawsuits were filed: (1) Douglas v. Steven J. Sell et al., 1:24-cv-00531 (W.D. Tex.) and (2) Bingham v. Steven J. Sell et al., 1:24-cv-01181 (W.D. Tex.) (the “Derivative Matters”). The Derivative Matters name the Company and certain current and former members of the Company’s executive team and Board of Directors as defendants. The Derivative Matters generally assert claims under Sections 14(a) and 10(b) of the Securities Exchange Act of 1934, as well as common law claims including breach of fiduciary duty. The Douglas lawsuit also asserts claims under Section 20(a) of the Exchange Act and seeks contribution
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under Section 11(f) of the Securities Act of 1933 and Section 21D of the Exchange Act. The Derivative Matters seek compensatory damages, restitution, punitive damages, attorney’s fees and costs, and other relief. The plaintiff in the Douglas action also seeks corporate governance reforms. The Company is unable to estimate any ultimate individual or aggregate amount of monetary liability or financial impact due to the early stages of the litigation.
NOTE 10. Common Stock
Common Stock
2024. During the three months ended September 30, 2024, the Company issued approximately 0.5 million shares of common stock primarily in connection with exercises and vesting of stock-based awards. During the nine months ended September 30, 2024, the Company issued approximately 3.6 million shares of common stock primarily in connection with exercises and vesting of stock-based awards. Additionally, during the nine months ended September 30, 2024, the Company issued approximately 2.0 million shares of common stock to settle liabilities related to the exchange of common stock for reduced physician partner compensation percentage in certain ACO REACH entities.
2023. During the three months ended September 30, 2023, the Company issued approximately 0.6 million shares of common stock primarily in connection with exercises and vesting of stock-based awards. During the nine months ended September 30, 2023, the Company issued approximately 3.2 million shares of common stock primarily in connection with exercises and vesting of stock-based awards.
On May 18, 2023, the Company repurchased and retired approximately 9.6 million shares of common stock pursuant to an underwritten secondary public offering of approximately 94.6 million shares of its common stock sold by CD&R. The Company paid approximately $20.80 per share, which is the same per share price paid by the underwriters to CD&R in the offering.
NOTE 11. Net Income (Loss) Per Common Share
Basic net income (loss) per common share (“EPS”) is computed based upon the weighted average number of common shares outstanding. Diluted net income (loss) per common share is computed based upon the weighted average number of common shares outstanding plus the impact of common shares issuable from the assumed conversion of stock options, certain performance restricted stock units, and unvested restricted stock units. Only those instruments having a dilutive impact on basic net income (loss) per share are included in diluted net income (loss) per share during the periods presented.
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The following table illustrates the computation of basic and diluted EPS (in thousands, except per share amounts):
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2024202320242023
Numerator
Income (loss) from continuing operations$(116,432)$(22,039)$(143,847)$(28,114)
Noncontrolling interests’ share in (earnings) loss from continuing operations— 47 (50)156 
Net income (loss) attributable to common stockholders before discontinued operations(116,432)(21,992)(143,897)(27,958)
Income (loss) from discontinued operations(1,183)(9,444)(10,464)(4,205)
Net income (loss) attributable to common stockholders$(117,615)$(31,436)$(154,361)$(32,163)
Denominator
Weighted average shares outstanding – basic411,591405,787410,604412,077
Weighted average shares outstanding – diluted411,591405,787410,604412,077
Net income (loss) per share attributable to common stockholders
Net income (loss) per common share from continuing operations, basic and diluted$(0.29)$(0.06)$(0.35)$(0.07)
Net income (loss) per common share from discontinued operations, basic and diluted$— $(0.02)$(0.03)$(0.01)
The following table provides the weighted-average potential shares of common stock that were excluded from the calculation of diluted net income (loss) per share attributable to common stockholders because their effect would have been anti-dilutive (in thousands):
 September 30,
 20242023
Stock options16,69017,424
Restricted stock units18,6959,183
NOTE 12. Goodwill and Amortizable Intangible Assets
As of both September 30, 2024 and December 31, 2023, the Company’s goodwill balance was $24.1 million. There were no events or circumstances that warranted an interim impairment test for goodwill during the nine months ended September 30, 2024.
As of September 30, 2024 and December 31, 2023, the Company’s gross carrying amount of amortizable intangible assets was $126.2 million and $108.0 million, with accumulated amortization of $52.8 million and $44.2 million, respectively. For the three months ended September 30, 2024 and 2023, the Company recognized $3.1 million and $2.0 million, respectively, in amortization expense, which is included in depreciation and amortization expense in the condensed consolidated statements of operations. For the nine months ended September 30, 2024 and 2023, the Company recognized $9.1 million and $5.7 million, respectively, in amortization expense, which is included in depreciation and amortization expense in the condensed consolidated statements of operations.
Acquisition
On February 28, 2023, the Company completed the acquisition of My Personal Health Record Express, Inc. (the “Acquisition”), a leading provider of value-based care technology and interoperability solutions for cash consideration of $45.3 million, net of cash acquired and subject to certain post-closing adjustments. The Company accounted for the Acquisition utilizing the acquisition method of accounting, which requires assets and liabilities to be recognized based on
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estimates of their acquisition date fair values. The determination of the values of the acquired assets and assumed liabilities, including other intangible assets and deferred taxes, requires significant judgment. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, the Company estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Measurement period adjustments are recorded in the period in which they are determined, as if they had been completed at the acquisition date. Upon the conclusion of the final determination of the values of assets acquired or liabilities assumed, or one year after the date of acquisition, whichever comes first, any subsequent adjustments are recorded within the Company's consolidated results of operations. The following allocation of the purchase price related to the Acquisition based upon the fair value of assets, which included developed technology of $27.5 million, and assumed net liabilities of $3.8 million, with the residual amount being recorded as goodwill of $21.6 million. The intangible assets acquired have a weighted-average life of 10 years.
NOTE 13. Supplemental Cash Flow Information
The following table provides supplemental cash flow information (in thousands):
 Nine Months Ended
September 30,
 20242023
Supplemental cash flow information:
Interest paid$3,263 $4,519 
Income taxes paid548 5,156 
Supplemental disclosure of non-cash investing and financing activities:  
Right-of-use asset obtained in exchange for new operating lease liability326 3,612 
Settlement of liabilities through issuance of stock15,230 — 
The following table summarizes cash, cash equivalents and restricted cash equivalents (in thousands):
 September 30,
2024		December 31,
2023
Cash and cash equivalents$148,161 $107,570 
Restricted cash and equivalents(1)
5,629 6,759 
Cash, cash equivalents and restricted cash equivalents$153,790 $114,329 
___________________________________________
(1)Restricted cash and equivalents primarily consist of amounts used as collateral to secure letters of credit that the Company is required to maintain pursuant to contracts with payors.
NOTE 14. Variable Interest Entities
Consolidated Variable Interest Entities
agilon health, inc.’s consolidated assets and liabilities as of September 30, 2024 and December 31, 2023 include certain assets of VIEs that can only be used to settle the liabilities of the related VIE. The VIE creditors do not have recourse to agilon health, inc.
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agilon health, inc.’s consolidated assets and liabilities include VIE assets and liabilities as follows (in thousands):
 September 30,
2024		December 31,
2023
Assets
Cash and cash equivalents$82,004 $62,154 
Restricted cash equivalents5,627 6,757 
Receivables, net1,366,412 940,618 
Prepaid expenses and other current assets, net20,127 21,907 
Property and equipment, net1,387 1,754 
Intangible assets, net49,336 25,561 
Other assets, net4,929 6,334 
Liabilities
Medical claims and related payables1,190,665 737,724 
Accounts payable and accrued expenses193,238 188,671 
Other liabilities3,259 4,184 
Risk-bearing Entities. At September 30, 2024, the Company operates 34 wholly-owned risk-bearing entities (“RBEs”) for the purpose of entering into risk-bearing contracts with payors. Each RBE’s equity at risk is considered insufficient to finance its activities without additional support, and, therefore, each RBE is considered a VIE. The Company consolidates the RBEs as it has determined that it is the primary beneficiary because it has: (i) the ability to control the activities that most significantly impact the RBEs’ economic performance; and (ii) the obligation to absorb losses or right to receive benefits that could potentially be significant to the RBEs. Specifically, the Company has the unilateral ability and authority, through the RBE governance and management agreements, to make significant decisions about strategic and operating activities of the RBEs, including negotiating and entering into risk-bearing contracts with payors, and approving the RBEs’ annual operating budgets. The Company also has the obligation to fund losses of the RBEs and the right to receive a significant percentage of any financial surplus generated by the RBEs. The assets of the RBEs primarily consist of cash and cash equivalents, receivables, net, intangible assets, net, and other assets. Its obligations primarily consist of medical claims and related payables as well as operating expenses of the RBEs (accounts payable and accrued expenses), including incentive compensation obligations to the Company’s physician partners. On February 18, 2021, the Company executed the Credit Facility, which is guaranteed by certain of the Company’s VIEs. Assets generated by the RBEs (primarily from medical services revenues) may be used, in certain limited circumstances, to settle the Company’s contractual debt obligations.
Unconsolidated Variable Interest Entities
As of September 30, 2024, the Company had 11 equity method investees, including 10 wholly-owned CMS ACO Models entities discussed below, that were deemed to be VIEs. The Company has determined that the activities that most significantly impact the performance of these VIEs consist of the allocation of resources to and other decisions related to clinical activities and provider contracting decisions. Because the Company does not have the ability to control these activities due to another party’s control of the VIEs’ board of directors, the Company has determined that it is not the primary beneficiary of and therefore does not consolidate these VIEs. The Company provided support to assist its CMS ACO Models investments in obtaining surety bonds related to risk-bearing capital contributions to CMS. As of September 30, 2024 and December 31, 2023, the ACOs had $65.2 million and $38.5 million outstanding surety bonds. The Company's maximum loss exposure as a result of the Company’s involvement with the VIEs cannot be quantified as the Company has the obligation to provide ongoing operational support to the unconsolidated VIEs, as needed.
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Equity Method Investments
The following table summarizes the Company’s equity method investees (in thousands):
 September 30,
2024		December 31,
2023
Equity method investments - Other(1)
$9,545 $9,148 
Equity method investments - CMS ACO Models(1)
44,400 35,605 
Equity method liabilities - CMS ACO Models(2)
(5,784)(1,199)
___________________________________________
(1)Included in Other assets, net in the condensed consolidated balance sheets.
(2)Included in Other liabilities in the condensed consolidated balance sheets.
The Company is a partner in 10 wholly-owned CMS ACO Models entities in collaboration with 15 of its physician group partners operating in 13 geographies. The combined summarized operating results of the Company’s CMS ACO Models entities are as follows (in thousands):
 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2024202320242023
Medical services revenue$454,410 $296,937 $1,341,484 $858,286 
Medical services expense(413,189)(242,431)(1,218,902)(741,752)
Other medical expenses(1)
(23,817)(31,970)(71,490)(71,138)
Income (loss) from operations(2)
3,786 18,330 24,643 31,515 
Net income (loss)(3)
2,014 14,628 17,566 24,388 
___________________________________________
(1)The three months ended September 30, 2024 and 2023, includes physician incentive expenses of $16.5 million and $25.1 million, respectively. For the nine months ended September 30, 2024 and 2023, includes physician incentive expenses of $47.0 million and $51.4 million, respectively.
(2)The three months ended September 30, 2024 and 2023, includes operating expenses for services provided by the Company of $9.1 million and $0.7 million, respectively. For the nine months ended September 30, 2024 and 2023, includes operating expenses for services received from the Company of $11.7 million and $2.2 million, respectively.
(3)Included in Income (loss) from equity method investments in the condensed consolidated statements of operations.
The combined summarized balance sheet of the Company’s CMS ACO Models entities are as follows (in thousands):
 September 30,
2024		December 31,
2023
Current assets$399,318 $174,967 
Noncurrent assets3,342 3,341 
Total assets402,660 178,308 
Current and total liabilities364,044 142,027 
NOTE 15. Discontinued Operations
Discontinued operations is a component of an entity that has either been disposed of or is deemed held-for-sale and, (i) the operations and cash flows of the component have been or will be eliminated from ongoing operations as a result of the disposal transaction, and (ii) the entity will not have any significant continuing involvement in the operations of the component after the disposal transaction. On October 31, 2023, the Company completed the disposition of MDX Hawaii, Inc. and its related operations. The Company’s decision to exit Hawaii and the Independent Practice Association line of business represents a strategic shift that will have a major effect on its operations and financial results. As such, the Company’s Hawaii operations are reflected in the consolidated financial statements as discontinued operations for all periods presented.
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The results of discontinued operations are as follows (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Revenues:
Medical services revenue$— $78,675 $— $240,196 
Other operating revenue— 122 — 373 
Total revenues— 78,797 — 240,569 
Expenses:
Medical services expense— 81,525 — 232,691 
Other medical expenses1,420 3,634 1,420 7,450 
General and administrative(237)2,080 281 1,419 
Depreciation and amortization— 1,235 — 3,706 
Income (loss) from operations(1,183)(9,677)(1,701)(4,697)
Other income (expense), net— 267 — 599 
Gain (loss) on sales of assets, net— — (8,763)— 
Interest expense— (34)— (107)
Net income (loss) from discontinued operations attributable to common shares$(1,183)$(9,444)$(10,464)$(4,205)
The following table provides significant non-cash operating items for discontinued operations that are included in the consolidated statements of cash flows for the nine months ended September 30, 2023 (in thousands):
Non-cash operating activities from discontinued operations:
Depreciation and amortization$3,706 
Stock-based compensation expense330 


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
All references in this report to “agilon,” “the Company”, “we,” “us” or “our” mean agilon health, inc., together with its consolidated subsidiaries. Unless the context suggests otherwise, references to “agilon health, inc.” mean the parent company without its subsidiaries.
Cautionary Language Regarding Forward-Looking Statements
Statements in this Quarterly Report on Form 10-Q (the “Report”) 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”). Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or the negative versions of these words or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. They appear in a number of places throughout this Report and include, without limitation, statements regarding our intentions, beliefs, assumptions or current expectations concerning, among other things, our financial position, results of operations, cash flows, prospects, and growth strategies.
Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be outside our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this Report. In addition, even if our results of operations, financial condition, and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors, including, without limitation, the risks and uncertainties discussed under Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. As explained in greater detail under Item 9A. “Controls and Procedures” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, we are undertaking a broad range of remedial procedures to address the material weaknesses in our internal control over financial reporting identified as of December 31, 2023. Our efforts to improve our internal controls are ongoing. Furthermore, new risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Report. Factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:
•our history of net losses and the expectation that our expenses will increase in the future;
•failure to identify and develop successful new geographies, physician partners and payors, or execute upon our growth initiatives;
•success in executing our operating strategies or achieving results consistent with our historical performance;
•medical expenses incurred on behalf of our members may exceed revenues we receive;
•our ability to maintain and secure additional contracts with Medicare Advantage (“MA”) payors on favorable terms, if at all;
•our ability to grow new physician partner relationships sufficient to recover startup costs;
•availability of additional capital, on acceptable terms or at all, to support our business in the future;
•significant reduction in our membership;
•transition to a Total Care Model may be challenging for physician partners;
•public health crises, such as COVID-19, could adversely affect us;
•inaccuracy in estimates of our members’ risk adjustment factors, medical services expense, incurred but not reported claims, and earnings pursuant to payor contracts;
•the impact of restrictive clauses or exclusivity provisions in some of our contracts with physician partners;
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•our ability to hire and retain qualified personnel;
•our ability to realize the full value of our intangible assets;
•security breaches, cybersecurity attacks, loss of data and other disruptions to our information systems;
•our ability to protect the confidentiality of our know-how and other proprietary and internally developed information;
•reliance on our subsidiaries to perform and fund their operations;
•environmental, social, and governance issues;
•our reliance on a limited number of key payors;
•the limited terms of contracts with our payors and our ability to renew them upon expiration;
•our ability to navigate the changing healthcare payor market;
•reliance on our payors, physician partners and other providers to operate our business;
•our ability to obtain accurate and complete diagnosis data;
•reliance on third-party software, data, infrastructure and bandwidth;
•consolidation and competition in the healthcare industry;
•the impact of changes to, and dependence on, federal government healthcare programs;
•uncertain or adverse economic and macroeconomic conditions, including a downturn or decrease in government expenditures;
•regulation of the healthcare industry and our physician partners’ ability to comply with such laws and regulations;
•federal and state investigations, audits and enforcement actions;
•repayment obligations arising out of payor audits;
•negative publicity regarding the managed healthcare industry generally;
•our use, disclosure and processing of personally identifiable information, protected health information, and de-identified data;
•our failure to obtain or maintain an insurance license, a certificate of authority or an equivalent authorization;
•lawsuits not covered by insurance;
•changes in tax laws and regulations, or changes in related judgments or assumptions;
•our indebtedness and our potential to incur more debt;
•dependence on our subsidiaries for cash to fund all of our operations and expenses;
•provisions in our governing documents;
•ability to achieve a return on investment depends on appreciation in the price of our common stock;
•the material weakness in our internal control over financial reporting and our ability to remediate such material weakness; and
•risks related to other factors discussed under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Except as required by law, we do not undertake, and hereby disclaim, any obligation to update any forward-looking statements, which speak only as of the date on which they are made.
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The information set forth in this Item 2 is intended to provide readers with an understanding of our financial condition, changes in financial condition, and results of operations and should be read in connection with the accompanying Condensed Consolidated Financial Statements and notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Report. We will discuss and provide our analysis in the following order:
•Overview and Recent Developments
•Key Financial and Operating Metrics
•Key Components of Our Results of Operations
•Results of Operations
•Non-GAAP Financial Measures
•Liquidity and Capital Resources
•Critical Accounting Policies and Estimates
•Recent Accounting Pronouncements
Overview and Recent Developments
Our business is transforming healthcare by empowering the primary care physicians (“PCPs”) to be the agent for change in the communities they serve. We believe that PCPs, with their intimate patient-physician relationships, are best positioned to drive meaningful change in quality, cost, and patient experience when provided with the right infrastructure and payment model. Through our combination of the agilon platform, a long-term partnership model with existing physician groups and a growing network of like-minded physicians, we are poised to revolutionize healthcare for seniors across communities throughout the United States. Our purpose-built model provides the necessary capabilities, capital, and business model for existing physician groups to create a Medicare-centric, globally capitated line of business. Our model operates by forming risk-bearing entities (“RBEs”) within local geographies, that enter into arrangements with payors providing for monthly payments to manage the total healthcare needs of our physician partners’ attributed patients (or, global capitation arrangements). The RBEs also contract with agilon to perform certain functions and enter into long-term professional service agreements with one or more anchor physician groups pursuant to which the anchor physician groups receive a base compensation rate and share in the savings from successfully improving quality of care and reducing costs.
Our business model is differentiated by its focus on existing community-based physician groups and is built around three key elements: (1) agilon’s platform; (2) agilon’s long-term physician partnership approach; and (3) agilon’s network. With our model, our goal is to remove the barriers that prevent community-based physicians from evolving to a Total Care Model, where the physician is empowered to manage health outcomes and the total healthcare needs of their attributed Medicare patients.
Third Quarter 2024 Results:
•Medicare Advantage members of approximately 525,200 as of September 30, 2024 increased 37% from September 30, 2023.
•CMS ACO Models (defined below) attributed beneficiaries of approximately 132,200 as of September 30, 2024 increased 51% from September 30, 2023.
•Total revenue of $1.5 billion increased 28% from the third quarter of 2023.
•Gross profit of negative $(64) million, compared to positive $37 million in the third quarter of 2023.
•Medical margin loss of $(58) million, compared to earnings of $111 million in the third quarter of 2023.
•Net loss of $118 million, compared to $31 million in the third quarter of 2023.
•Adjusted EBITDA loss of $96 million, compared to earnings of $6 million in the third quarter 2023.
Year to Date 2024 Results as of September 30, 2024:
•Total revenue of $4.5 billion increased 39% from 2023.
•Gross profit of $43 million, compared to $165 million in 2023.
•Medical margin of $205 million, compared to $401 million in 2023.
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•Net loss of $154 million, compared to $32 million in 2023.
•Adjusted EBITDA loss of $70 million, compared to earnings of $42 million in 2023.
Membership Details
Medicare Advantage members increased 37% from September 30, 2023, which includes contributions from new geographies and growth within geographies existing prior to 2023. Total members live on the platform includes 525,200 Medicare Advantage members and 132,200 attributed CMS ACO Models beneficiaries.
Average Medicare Advantage membership was 535,400 during the third quarter of 2024.
Key Financial and Operating Metrics
All of our key metrics exclude historical results from our Hawaii operations (which are included as discontinued operations in our condensed consolidated financial statements).
We monitor the following key financial and operating metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. We believe the following key metrics are useful in evaluating our business (dollars in thousands):
As of and For theAs of and For the
Three Months Ended September 30,Nine Months Ended September 30,
20242023% Change20242023% Change
MA members525,200384,20037 525,200384,20037 
Medical services revenue$1,447,697 $1,133,457 28 $4,528,471 $3,253,810 39 
Gross profit$(64,167)$36,839 (274)$43,096 $164,538 (74)
Medical margin(1)
$(58,253)$110,586 (153)$204,619 $400,544 (49)
Platform support costs$42,353 $41,590 2 $129,752 $126,923 2 
Net income (loss)$(117,615)$(31,483)274 $(154,311)$(32,319)377 
Adjusted EBITDA(1)
$(96,469)$5,553 (1,837)$(70,245)$42,060 (267)
___________________________________________
(1)Medical margin and Adjusted EBITDA are non-GAAP financial measures. Gross profit is the most directly comparable financial measure calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to medical margin. Net income (loss) is the most directly comparable financial measure calculated in accordance with U.S. GAAP to Adjusted EBITDA. See “—Non-GAAP Financial Measures" below for additional information.
Medicare Advantage Members
Our MA members include all individuals enrolled in an MA plan that are attributed to the PCPs on our platform at the end of a given period.
Medical Services Revenue
Our medical services revenue consists of capitation revenue under contracts with various payors. Under the typical capitation arrangement, we are entitled to per member per month ("PMPM") fees to provide a defined range of healthcare services for MA health plan members through our contracted physician partners and affiliated PCPs. Such fees are typically based on a defined percentage of corresponding premium that payors receive from the Centers for Medicare & Medicaid Services' (“CMS”). We recognize capitation revenue over the period eligible members are entitled to receive healthcare services.
Gross Profit
Gross profit represents the amount earned from total revenues less medical services expense and other medical expenses. Total revenues include medical services revenue and other operating revenue. The Company’s costs of revenues consist of medical services expense and other medical expenses, which represents the costs that are directly related to providing the services that generate revenue.
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The following table presents our gross profit (dollars in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Total revenues$1,450,932 $1,136,863 $4,538,044 $3,260,290 
Medical services expense(1,505,950)(1,022,871)(4,323,852)(2,853,266)
Other medical expenses(1)
(9,149)(77,153)(171,096)(242,486)
Gross profit$(64,167)$36,839 $43,096 $164,538 
___________________________________________
(1)Represents physician compensation expense related to surplus sharing and other care management expenses that help to create medical cost efficiency. Includes costs in geographies that are in implementation and are not yet generating revenue and investments to grow existing markets. For the three months ended September 30, 2024 and 2023, costs incurred in implementing geographies were $1.4 million and $10.3 million, respectively. For the nine months ended September 30, 2024 and 2023, costs incurred in implementing geographies were $2.0 million and $20.3 million, respectively.
Medical Margin
We define medical margin as medical services revenue after medical services expense is deducted. Medical services expense represents costs incurred for medical services provided to our members. As our platform 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.
See “—Non-GAAP Financial Measures” for information regarding our use of medical margin and a reconciliation of gross profit to medical margin.
Platform Support Costs
Our platform support costs, which include regionally-based support personnel and other operating costs to support our geographies, are expected to decrease over time as a percentage of revenue as our physician partners add members and our revenue grows. Our operating expenses at the enterprise level include resources and technology to support payor contracting, clinical program development, quality, data management, finance, and legal and compliance functions.
The table below represents costs to support our live geographies and enterprise functions, which are included in general and administrative expenses (dollars in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Platform support costs$42,353 $41,590 $129,752 $126,923 
% of Revenue3 %4 %3 %4 %
Net Income (Loss) and Adjusted EBITDA
Net income (loss) is the most directly comparable U.S. GAAP measure to Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) stock-based compensation expense, (vi) severance and related costs, and (vii) certain other items that are not considered by us in the evaluation of ongoing operating performance. We reflect our share of Adjusted EBITDA for equity method investments by applying our actual ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis.
See “—Non-GAAP Financial Measures” for information regarding our use of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA.
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Key Components of Our Results of Operations
Revenues
Medical Services Revenue
Our medical services revenue consists of capitation revenue under contracts with various payors. Under the typical capitation arrangement, we are entitled to PMPM fees to provide a defined range of healthcare services for MA health plan members through our contracted physician partners and affiliated PCPs. Such fees are typically based on a defined percentage of corresponding premium that payors receive from CMS. We recognize capitation revenue over the period eligible members are entitled to receive healthcare services.
Medical services revenue constitutes substantially all of our total revenue for the three and nine months ended September 30, 2024 and 2023.
Operating Expenses
Medical Services Expense
In each of our geographies, a network of physicians, hospitals, and other healthcare providers provide care to our members. Medical services expense represents costs incurred for medical services provided to our members. Our medical services expense trends primarily relate to changes in per visit costs incurred by our members, along with changes in health system and provider utilization of services. Medical services expenses are recognized in the period in which services are provided and include estimates of our obligations for medical services that have been rendered by third parties but for which claims have either not yet been received, processed, or paid.
Other Medical Expenses
Other medical expenses include: (i) partner physician compensation expense and (ii) other provider costs. Partner physician compensation expense represents obligations to our physician partners corresponding to a portion of the surplus generated in our geographies, which is a function of medical services revenues less the sum of medical services expenses, other provider costs and market operating costs, for the respective geography. Physician payment obligations are reconciled quarterly, and settlement payments are typically issued to providers on an annual basis in arrears, with interim payments issued periodically. Other provider costs include payments to support physician-patient engagement, certain other medical costs, and other care management expenses that help to create medical cost efficiency. Other provider costs include costs incurred for geographies that are in implementation and are not yet generating revenue.
General and Administrative
General and administrative expenses consist of market-based support personnel and other operating costs to support our geographies, personnel and other operating costs to support our enterprise functions, and investments to support development and expansion of our physician partners. Our enterprise functions include salaries and related expenses, stock-based compensation (including shares issued under partner physician group equity agreements), operational support expenses, technology infrastructure, finance, and legal, as well as other costs associated with the continued growth of our platform. For the purposes of calculating physician partner incentive expense, we allocate a portion of our enterprise general and administrative expenses to our geographies. General and administrative expenses also include severance and accruals for unasserted claims.
Depreciation and Amortization
Depreciation and amortization expenses are associated with our property and equipment and acquired intangible assets. Depreciation includes expenses associated with computer equipment and software, furniture and fixtures, and leasehold improvements. Amortization primarily includes expenses associated with acquired intangible assets.
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Other Income (Expense)
Income (loss) from equity method investments
Income (loss) from equity method investments consists primarily of income associated with our participation in the CMS Shared Savings Program (“MSSP”), along with its existing participation in the Accountable Care Organization Realizing Equity, Access, and Community Health (“ACO REACH”) Model, (collectively, “CMS ACO Models”).
Other Income (Expense), Net
Other income (expense), net includes interest income, which consists primarily of interest earned on our cash and cash equivalents, restricted cash and cash equivalents, and marketable securities, including amortization/accretion of discount/premium.
Interest Expense
Interest expense consists primarily of interest expense associated with our outstanding debt, including amortization of debt discounts and costs.
Income Tax Benefit (Expense)
We are subject to corporate U.S. federal, state, and local income taxation. Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management makes estimates and judgments about future taxable income based on assumptions that are consistent with our plans and estimates.
Total Discontinued Operations
Total discontinued operations primarily consist of the results of our Hawaii operations. For certain of our divestiture transactions, we continue to be responsible for any liabilities arising from the business that were incurred prior to the closing date of such transaction, including any fines, penalties, and other sanctions, the payment of claims for medical services incurred prior to the effective date of each transaction, a liability for unrecognized tax benefits for which we are indemnified, and other contingent liabilities that we currently believe are remote. For additional discussion, see Note 15 to the Condensed Consolidated Financial Statements.
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Results of Operations
The following table summarizes key components of our results of operations (dollars in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Revenues:
Medical services revenue$1,447,697 $1,133,457 $4,528,471 $3,253,810 
Other operating revenue3,235 3,406 9,573 6,480 
Total revenues1,450,932 1,136,863 4,538,044 3,260,290 
Expenses:
Medical services expense1,505,950 1,022,871 4,323,852 2,853,266 
Other medical expenses9,149 77,153 171,096 242,486 
General and administrative (including noncash stock-based compensation expense of $13,259, $20,619, $48,375 and $53,650, respectively)
63,123 72,058 209,157 221,064 
Depreciation and amortization6,218 4,075 17,969 11,308 
Total expenses1,584,440 1,176,157 4,722,074 3,328,124 
Income (loss) from operations(133,508)(39,294)(184,030)(67,834)
Other income (expense):
Income (loss) from equity method investments2,047 14,659 17,686 24,507 
Other income (expense), net16,061 5,423 26,794 20,402 
Interest expense(1,622)(1,617)(4,603)(4,665)
Income (loss) before income taxes(117,022)(20,829)(144,153)(27,590)
Income tax benefit (expense)590 (1,210)306 (524)
Income (loss) from continuing operations(116,432)(22,039)(143,847)(28,114)
Discontinued operations:
Income (loss) before gain (loss) on sales(1,183)(9,444)(1,701)(4,205)
Gain (loss) on sales of assets, net— — (8,763)— 
Total discontinued operations(1,183)(9,444)(10,464)(4,205)
Net income (loss)(117,615)(31,483)(154,311)(32,319)
Noncontrolling interests’ share in (earnings) loss— 47 (50)156 
Net income (loss) attributable to common shares$(117,615)$(31,436)$(154,361)$(32,163)
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The following table summarizes our results of operations as a percentage of total revenues:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Revenues:
Medical services revenue100 %100 %100 %100 %
Other operating revenue— — — — 
Total revenues100 100 100 100 
Expenses:
Medical services expense104 90 95 88 
Other medical expenses1 7 4 7 
General and administrative (including noncash stock-based compensation expense of 1%, 2%, 1% and 2%, respectively)
4 6 5 7 
Depreciation and amortization— — — — 
Total expenses109 103 104 102 
Income (loss) from operations(9)(3)(4)(2)
Other income (expense):
Income (loss) from equity method investments— 1 — 1 
Other income (expense), net1 — 1 1 
Interest expense— — — — 
Income (loss) before income taxes(8)(2)(3)(1)
Income tax benefit (expense)— — — — 
Income (loss) from continuing operations(8)(2)(3)(1)
Discontinued operations:
Income (loss) before gain (loss) on sales— (1)— — 
Gain (loss) on sales of assets, net— — — — 
Total discontinued operations— (1)— — 
Net income (loss)(8)(3)(3)(1)
Noncontrolling interests’ share in (earnings) loss— — — — 
Net income (loss) attributable to common shares(8)%(3)%(3)%(1)%
Comparison of the Three and Nine Months Ended September 30, 2024 to the Three and Nine Months Ended September 30, 2023
Medical Services Revenue
Three Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Medical services revenue$1,447,697 $1,133,457 $314,240 28 %
% of total revenues100 %100 %
Medical services revenue increased for the three months ended September 30, 2024 due primarily to growth in average membership of 38%, which was attributable to seven new geographies that began to generate revenue in 2024 and growth in our existing geographies. The increase in medical services revenue for the three months ended September 30, 2024 was partially offset by a decrease in PMPM capitation rates of 7%. Medical services revenue also decreased as a
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result of higher costs associated with prescription drug benefits provided under the Medicare Part D program and lower risk adjustment revenue, including unfavorable prior period development.
Nine Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Medical services revenue$4,528,471 $3,253,810 $1,274,661 39 %
% of total revenues100 %100 %
Medical services revenue increased for the nine months ended September 30, 2024 due primarily to growth in average membership of 39%, which was attributable to seven new geographies that began to generate revenue in 2024 and growth in our existing geographies. The increase in medical services revenue was partially offset by higher costs associated with prescription drug benefits provided under the Medicare Part D program and lower risk adjustment revenue related to unfavorable prior period development.
Medical Services Expense
Three Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Medical services expense$1,505,950 $1,022,871 $483,079 47 %
% of total revenues104 %90 %
Medical services expense increased for the three months ended September 30, 2024 due primarily to growth in average membership of 38%, which was attributable to seven new geographies that became operational in 2024 and growth in our existing geographies. The increase in medical services expense for the three months ended September 30, 2024 was also driven by an increase in average medical services expense per member of 7%, which was primarily due to the continued impact of elevated medical cost trends and unfavorable prior period reserve development.
Nine Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Medical services expense$4,323,852 $2,853,266 $1,470,586 52 %
% of total revenues95 %88 %
Medical services expense increased for the nine months ended September 30, 2024 due primarily to growth in average membership of 39%, which was attributable to seven new geographies that became operational in 2024 and growth in our existing geographies. The increase in medical services expense for the nine months ended September 30, 2024 was also driven by an increase in average medical services expense per member of 9%, which was primarily due to the continued impact of elevated medical cost trends and unfavorable prior period reserve development.
Other Medical Expenses
Three Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Other medical expenses$9,149 $77,153 $(68,004)(88)%
% of total revenues1 %7 %
Other medical expenses decreased by $68.0 million, or 88%, for the three months ended September 30, 2024 compared to the same period in 2023. Partner physician incentive expense decreased by $63.9 million to $(25.4) million in 2024 compared to $38.5 million in the same period in 2023 as a result of the recent losses generated in our geographies, which is a function of medical services revenues less the sum of medical services expenses, other provider costs and market operating costs, for the respective geography. Other provider costs decreased by $4.2 million to $34.5 million in 2024 compared to $38.7 million in the same period in 2023, resulting from the increase in the number of geographies and
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members on our platform. Other provider costs for the three months ended September 30, 2023 include $10.3 million of costs related to geographies that became operational in 2024.
Nine Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Other medical expenses$171,096 $242,486 $(71,390)(29)%
% of total revenues4 %7 %
Other medical expenses decreased by $71.4 million, or 29%, for the nine months ended September 30, 2024 compared to the same period in 2023. Partner physician incentive expense decreased by $86.1 million to $54.8 million in 2024 compared to $140.9 million in the same period in 2023 as a result of the recent losses generated in our geographies, which is a function of medical services revenues less the sum of medical services expenses, other provider costs and market operating costs, for the respective geography. Other provider costs increased by $14.7 million to $116.3 million in 2024 compared to $101.6 million in 2023, resulting from the increase in the number of geographies and members on our platform. Other provider costs for the nine months ended September 30, 2024 and 2023 include $2.0 million and $20.3 million, respectively, of costs related to geographies that became operational in the following year.
General and Administrative
Three Months Ended
September 30,		Change
(dollars in thousands)20242023$%
General and administrative$63,123 $72,058 $(8,935)(12)%
% of total revenues4 %6 %
General and administrative expenses decreased $8.9 million, or 12%, for the three months ended September 30, 2024 compared to the same period in 2023. Operating costs to support our live geographies and enterprise functions (platform support costs) of $42.4 million in 2024 remained relatively flat compared to $41.6 million in the same period in 2023. Operating costs to support our live geographies and enterprise functions as a percentage of revenue decreased to 3% for the three months ended September 30, 2024 compared to 4% for the same period in 2023. Investments to support geography entry decreased to $5.8 million in 2024, compared to $8.0 million in the same period in 2023 due to decreased costs associated with our geographies that are expected to become operational in the following calendar year and expansion into existing geographies. Stock-based compensation expense decreased $7.3 million in 2024 primarily due to the cancellation of stock-based instruments during 2024.
Nine Months Ended
September 30,		Change
(dollars in thousands)20242023$%
General and administrative$209,157 $221,064 $(11,907)(5)%
% of total revenues5 %7 %
General and administrative expenses decreased $11.9 million, or 5%, for the nine months ended September 30, 2024 compared to the same period in 2023. Operating costs to support our live geographies and enterprise functions (platform support costs) increased by $2.9 million to $129.8 million in 2024 compared to $126.9 million in the same period in 2023 due primarily to growth in operating costs incurred to support geographies that became operational in 2024. Operating costs to support our live geographies and enterprise functions as a percentage of revenue decreased to 3% for the nine months ended September 30, 2024 compared to 4% for the same period in 2023. Investments to support geography entry decreased to $21.2 million in 2024, compared to $28.6 million in the same period in 2023 due to decreased costs associated with our geographies that are expected to become operational in the following calendar year and expansion into existing geographies. Stock-based compensation expense decreased $5.3 million in 2024 primarily due to the cancellation of stock-based instruments during 2024.
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Income (loss) from equity method investments
Three Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Income (loss) from equity method investments$2,047 $14,659 $(12,612)(86)%
% of total revenues— %1 %
Income (loss) from equity method investments decreased $12.6 million, or 86%, for the three months ended September 30, 2024 compared to the same period in 2023 primarily from increases in operating expenses, of which $7.9 million was recognized in the third quarter of 2024, and to a lesser extent, by a decrease in gross profit from our CMS ACO Models investments.
Nine Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Income (loss) from equity method investments$17,686 $24,507 $(6,821)(28)%
% of total revenues— %1 %
Income (loss) from equity method investments decreased $6.8 million, or 28%, for the nine months ended September 30, 2024 compared to the same period in 2023 primarily from increases in operating expenses from our CMS ACO Models investments.
Other income (expense), net
Three Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Other income (expense), net$16,061 $5,423 $10,638 196 %
% of total revenues1 %— %
Other income (expense), net increased $10.6 million, or 196%, for the three months ended September 30, 2024 compared to the same period in 2023 primarily from $11.7 million of income related to services rendered to our CMS ACO Models investments that was recognized in the third quarter of 2024.
Nine Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Other income (expense), net$26,794 $20,402 $6,392 31 %
% of total revenues1 %1 %
Other income (expense), net increased $6.4 million, or 31%, for the nine months ended September 30, 2024 compared to the same period in 2023 primarily from $11.7 million of income related to services rendered to our CMS ACO Models investments, partially offset by decline in interest income as a result of the maturities of various marketable securities investments.
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Total Discontinued Operations
Three Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Total discontinued operations$(1,183)$(9,444)$8,261 87 %
% of total revenues— %(1)%
Total discontinued operations is related to the sale of our Hawaii operations in October 2023. Total discontinued operations for the three months ended September 30, 2024 is related to various remaining obligations from our Hawaii operations compared to losses from discontinued operations for the three months ended September 30, 2023.
Nine Months Ended
September 30,		Change
(dollars in thousands)20242023$%
Total discontinued operations$(10,464)$(4,205)$(6,259)(149)%
% of total revenues— %— %
Total discontinued operations is related to the sale of our Hawaii operations in October 2023. Total discontinued operations for the nine months ended September 30, 2024 is primarily related to various remaining obligations from our Hawaii operations compared to losses from discontinued operations for the nine months ended September 30, 2023.
Non-GAAP Financial Measures
In addition to providing results that are determined in accordance with U.S. GAAP, we present medical margin and Adjusted EBITDA, which are non-GAAP financial measures.
We define medical margin as medical services revenue after medical services expense is deducted. Medical services expense represents costs incurred for medical services provided to our members. As our platform 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. We believe this metric provides insight into the economics of our capitation arrangements as it includes all medical services expense directly associated with our members’ care.
We define Adjusted EBITDA as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) stock-based compensation expense, (vi) severance and related costs, and (vii) certain other items that are not considered by us in the evaluation of ongoing operating performance. We reflect our share of Adjusted EBITDA for equity method investments by applying our actual ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis.
Gross profit is the most directly comparable U.S. GAAP measure to medical margin. Net income (loss) is the most directly comparable U.S. GAAP measure to Adjusted EBITDA.
We believe medical margin and Adjusted EBITDA help identify underlying trends in our business and facilitate evaluation of period-to-period operating performance of our operations by eliminating items that are variable in nature and not considered by us in the evaluation of ongoing operating performance, allowing comparison of our recurring core business operating results over multiple periods. We also believe medical margin and Adjusted EBITDA provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics we use for financial and operational decision-making. We believe medical margin and Adjusted EBITDA or similarly titled non-GAAP measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance. Other companies may calculate medical margin and Adjusted EBITDA or similarly titled non-GAAP measures differently from the way we calculate these metrics. As a result, our presentation of medical margin and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, limiting their usefulness as comparative measures.
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Adjusted EBITDA is not considered a measure of financial performance under U.S. GAAP, and the items excluded therefrom are significant components in understanding and assessing our financial performance. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as an alternative to such U.S. GAAP measures as net income (loss), cash flows provided by or used in operating, investing, or financing activities or other financial statement data presented in our consolidated financial statements as an indicator of financial performance or liquidity. Some of these limitations are:
•Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs;
•Adjusted EBITDA does not reflect interest expense or the requirements necessary to service interest or principal payments on debt;
•Adjusted EBITDA does not reflect income tax expense (benefit) or the cash requirements to pay taxes;
•Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
•Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
•The expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from similarly titled non-GAAP financial measures.
The following table sets forth a reconciliation of gross profit to medical margin using data derived from our condensed consolidated financial statements for the periods indicated (dollars in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Gross profit(1)
$(64,167)$36,839 $43,096 $164,538 
Other operating revenue(3,235)(3,406)(9,573)(6,480)
Other medical expenses9,149 77,153 171,096 242,486 
Medical margin$(58,253)$110,586 $204,619 $400,544 
___________________________________________
(1)Gross profit is defined as total revenues less medical services expense and other medical expenses.
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The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA using data derived from our condensed consolidated financial statements for the periods indicated (dollars in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
Net income (loss)$(117,615)$(31,483)$(154,311)$(32,319)
(Income) loss from discontinued operations, net of income taxes1,183 9,444 10,464 4,205 
Interest expense1,622 1,617 4,603 4,665 
Income tax expense (benefit)(590)1,210 (306)524 
Depreciation and amortization6,218 4,075 17,969 11,308 
Severance and related costs1,453 — 4,736 188 
Stock-based compensation expense13,259 20,619 48,375 53,650 
EBITDA adjustments related to equity method investments(1)9,719 3,702 15,025 8,426 
Other(2)
(11,718)(3,631)(16,800)(8,587)
Adjusted EBITDA$(96,469)$5,553 $(70,245)$42,060 
___________________________________________
(1)Includes elimination of certain administrative services provided by agilon health, inc. to equity method investments.
(2)Includes interest income, transaction-related costs and elimination of certain administrative services provided by agilon health, inc. to equity method investments.

Liquidity and Capital Resources
We have historically financed our operations primarily through funds generated from our capitation arrangements with payors, issuances of equity securities, and borrowings under credit agreements. We generally invest any excess cash in money market accounts, which are classified as cash equivalents, and marketable securities. Our investment strategies are designed to provide safety and preservation of capital, sufficient liquidity to meet the cash flow needs of our business operations, and attainment of a competitive return. As of September 30, 2024, we had cash and cash equivalents and restricted cash and equivalents of $153.8 million and investments in marketable securities of $244.8 million.
We expect to continue to incur operating losses and generate negative cash flows from operations for the foreseeable future due to the investments we intend to continue to make in expanding our business and additional general and administrative costs we expect to incur related to our operation as a public company. As a result, we may require additional capital resources in the future to execute strategic initiatives to grow our business.
Our primary uses of cash include payments for medical claims and other medical expenses, general and administrative expenses, costs associated with the development of new geographies and expansion of existing geographies, debt service, and capital expenditures. Final reconciliation and receipt of amounts due from payors are typically settled in arrears, following completion of the contractual program year.
Based on our planned operations, we believe that our existing cash and cash equivalents, investments in marketable securities, as well as available borrowing capacity under the Credit Facility (defined below), will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months, though we may require additional capital resources in the future. We have based these estimates on assumptions that may prove to be wrong and we could utilize our available capital resources sooner than we expect.
We may require additional financing in the future to fund working capital and pay our obligations. We may seek to raise any necessary additional capital through a combination of public or private equity offerings and/or debt financings. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us, if at all. If adequate funds are not available on acceptable terms when needed, we may be required to significantly reduce operating expenses, which may have a material adverse effect on our business, financial condition, cash flows, and results of operations. If we do raise additional capital through public or private equity, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation
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or other preferences that adversely affect our existing stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.
Our ability to pay dividends to holders of our common stock is significantly limited as a practical matter by our growth plans as well as the Credit Facility insofar as we may seek to pay dividends out of funds made available to us by agilon health management, inc. (“agilon management”) or its subsidiaries because the Credit Facility restricts agilon management’s ability to pay dividends or make loans to us. The borrower on the Credit Facility is agilon management, our wholly-owned subsidiary. The Credit Facility is guaranteed by certain of our subsidiaries, including those identified as variable interest entities, and contain customary covenants including, among other things, limitations on restricted payments including: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios.
As of September 30, 2024, we had $25.1 million outstanding surety bonds related to health plan payor risk-bearing capital contributions.
Cash Flows
The following summary discussion of our cash flows is based on the condensed consolidated statements of cash flows. The following table sets forth changes in cash flows (dollars in thousands):
Nine Months Ended September 30,
20242023Change
Net cash provided by (used in) operating activities$(74,196)$(95,033)$20,837 
Net cash provided by (used in) investing activities116,218 (41,816)158,034 
Net cash provided by (used in) financing activities(2,561)(192,288)189,727 
Net Cash Provided By (Used In) Operating Activities
Net cash used in operating activities was $74.2 million for the nine months ended September 30, 2024 compared to $95.0 million for the nine months ended September 30, 2023. The decrease in net cash used in operating activities was primarily as a result of the timing of settlements with payors from new and existing geographies. Our cash flow from operations is dependent upon the number of members on our platform, the timing of settlements with payors, and the level of operating and general and administrative expenses necessary to operate and grow our business, among other factors.
Net Cash Provided By (Used In) Investing Activities
Net cash provided by investing activities was $116.2 million for the nine months ended September 30, 2024 compared to net cash used in investing activities of $41.8 million for the nine months ended September 30, 2023. During the nine months ended September 30, 2024, we received net proceeds from the maturities of marketable securities of $154.8 million and made investments of $38.6 million primarily for the acquisition of intangible assets and property and equipment. During the nine months ended September 30, 2023, we completed the acquisition of My Personal Health Record Express, Inc. for $44.4 million and made investments in marketable securities of $107.0 million, which were partially offset by proceeds from the maturity of marketable securities of $133.9 million.
Net Cash Provided By (Used In) Financing Activities
Net cash used in financing activities was $2.6 million for the nine months ended September 30, 2024 compared to $192.3 million for the nine months ended September 30, 2023. During the nine months ended September 30, 2023, we used $200.0 million to repurchase shares of our common stock in an underwritten secondary public offering.
Debt Obligations
On February 18, 2021, we executed a credit facility agreement (as amended by the First Amendment to Credit Agreement, dated as of March 1, 2021 and the Second Amendment to Credit Agreement, dated as of May 25, 2023, the “Credit Facility”). The Credit Facility includes: (i) a $100.0 million senior secured term loan (the “Secured Term Loan Facility”) and (ii) a $100.0 million senior secured revolving credit facility (the “Secured Revolving Facility”) with a
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capacity to issue standby letters of credit in certain circumstances up to a maximum of $100.0 million. Subject to specified conditions and receipt of commitments, the Secured Term Loan Facility may be expanded (or a new term loan facility, revolving credit facility or letter of credit facility added) by up to (i) $50.0 million plus (ii) an additional amount determined in accordance with a formula tied to repayment of certain of our indebtedness. The maturity date of the Credit Facility was extended to February 18, 2026.
Effective with the Second Amendment to Credit Agreement on May 25, 2023, we transitioned to the Secured Overnight Financing Rate ("SOFR") as a benchmark interest rate used in the Credit Agreement. At our option, borrowings under the Credit Facilities, as defined in the credit agreement, can be either: (i) SOFR Rate Loans, (ii) Daily Simple SOFR Rate Loans, or (iii) Base Rate Loans. Daily Simple SOFR Rate Loans and SOFR Rate Loans bear interest at a rate equal to the sum of 3.50% and the higher of (a) SOFR, as defined in the credit agreement, and (b) 0%. Base Rate Loans bear interest at a rate equal to the sum of 2.50% and the highest of: (a) 0.50% in excess of the overnight federal funds rate, (b) the prime rate established by the administrative agent from time to time, (c) the one-month SOFR rate (adjusted for maximum reserves) plus 1.00% and (d) 0%. Additionally, we pay a commitment fee on the unfunded 2021 Revolving Credit Facility amount of 0.375%. We must also pay customary letter of credit fees.
The Credit Facility contains customary covenants including, among other things, limitations on restricted payments including: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios.
For additional discussion on our debt obligations, see Note 8 to the Condensed Consolidated Financial Statements.
Equity
As of September 30, 2024, we had 412.0 million shares of common stock outstanding. See Note 10 to the Condensed Consolidated Financial Statements for additional information about our equity transactions.
Critical Accounting Estimates
Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our historical experience, known trends and events, and various other assumptions that we believe are reasonable under the circumstances. These estimates affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our condensed consolidated financial statements. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 in Part II, Item 7 “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting Policies” and Note 2 to the Condensed Consolidated Financial Statements. There have been no significant changes to our critical accounting policies during 2024.
Recent Accounting Pronouncements
For the impact of new accounting standards, see Note 2 to the Condensed Consolidated Financial Statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates. We do not use derivative financial instruments in the normal course of business or for speculative or trading purposes.
Our exposures to market risk for changes in interest expense relate primarily to the Credit Facility. Indebtedness under the Credit Facility is floating rate debt and is carried at amortized cost. Therefore, fluctuations in interest rates will
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impact our consolidated financial statements. A rising interest rate environment will increase the amount of interest paid on this debt. A hypothetical 100 basis point change in interest rates would not have a material impact on our interest expense.
We held cash, cash equivalents, restricted cash equivalents, and marketable securities of $398.6 million and $495.1 million as of September 30, 2024 and December 31, 2023, respectively, consisting of bank deposits, certificates of deposits, money market funds, U.S. Treasury notes, and corporate debt securities. Such interest-earning instruments carry a degree of interest rate risk. A hypothetical 100 basis point change in interest rates would not have a material impact on the fair value of our marketable securities. Declines in interest rates over time will reduce our investment income. The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), with the assistance of other members of management, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Our disclosure controls and procedures are intended to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Based on this review, although we continue to work to remediate the material weakness in internal control over financial reporting as described in our Annual Report on Form 10-K for the year ended December 31, 2023, and progress has been made to date, our CEO and CFO have concluded that the disclosure controls and procedures related to this material weakness were not effective as of September 30, 2024.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect every misstatement. An evaluation of effectiveness is subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may decrease over time.
Changes in Internal Control Over Financial Reporting. Under applicable SEC rules (Exchange Act Rules 13a-15(d) and 15d-15(d)), management is required to evaluate any change in internal control over financial reporting that occurred during each fiscal quarter that had materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
As explained in greater detail under Part II, Item 9A. “Controls and Procedures” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, we are undertaking a broad range of remedial procedures to address the material weakness in our internal control over financial reporting identified as of December 31, 2023. Our efforts to improve our internal controls are ongoing. Therefore, while we determined, with the participation of our CEO and CFO, that there have been no changes in our internal control over financial reporting in the three-month period ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, we continue to monitor the operation of these remedial measures through the date of this report.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See the “Legal Proceedings” section of Note 9 to the Condensed Consolidated Financial Statements for information regarding legal proceedings, which information is incorporated by reference in this Item 1.
Item 1A. Risk Factors
In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. There have been no material changes to the risk factors disclosed in the Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
(a)
None.
(b)
None.
(c)
None.
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Item 6. Exhibits
Exhibit
Number
Description
31.1
  
31.2
  
32.1
  
32.2
  
101.INSInline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.*
  
101.SCHInline XBRL Taxonomy Extension Schema Document.*
  
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document.*
  
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document.*
  
101.LABInline XBRL Taxonomy Extension Label Linkbase Document.*
  
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document.*
  
104Cover Page Interactive Data File (embedded within the Inline XBRL document).*
___________________________________________
*Filed herewith.
**Furnished herewith.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 7, 2024
agilon health, inc.
  
 (Registrant)
  
 /s/ JEFFREY SCHWANEKE
 Jeffrey Schwaneke
 Chief Financial Officer
 (Principal Financial Officer)
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