• Revenue: $478.7 million, a 37% increase from the prior year period.
• Adjusted EBITDA: $45.2 million, a 13% decrease from $52 million in the prior year period.
• Net Income: $16.1 million, down 27% from $22.1 million in the prior year quarter.
• Earnings Per Diluted Share: $0.33, down from $0.47 in the prior year period.
• Year-to-Date Adjusted EBITDA: $135.3 million, up 15% from $117.6 million in the prior year period.
• Year-to-Date Net Income: $50.1 million, up 4% from $48.4 million in the prior year period.
• Year-to-Date Earnings Per Diluted Share: $1.04, a 1% increase from $1.03 in the prior year period.
• Cash and Cash Equivalents: $348 million at the end of the quarter.
• Total Debt: $442 million at the end of the quarter.
• Full Year Revenue Guidance: Revised to $1.95 billion to $2.03 billion.
• Full Year Adjusted EBITDA Guidance: Revised to $165 million to $175 million.
• Full Year Earnings Per Diluted Share Guidance: Revised to $1.06 to $1.19.

• Warning! GuruFocus has detected 7 Warning Signs with ASTH.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Astrana Health Inc (NASDAQ:ASTH) reported a 37% increase in total revenue, reaching $478.7 million, driven by progress in transitioning to full risk and contributions from acquisitions.
• The company successfully closed the acquisition of Collaborative Health Systems, expanding its footprint and provider network.
• Astrana Health Inc (NASDAQ:ASTH) continues to grow its membership base, reaching around 1 million members, with plans for further expansion.
• The company is on track to achieve its goal of having two-thirds of capitation revenue from a full risk ecosystem by January 2025.
• Astrana Health Inc (NASDAQ:ASTH) maintains a strong balance sheet with $348 million in cash and cash equivalents, supporting its strategic growth initiatives.

Negative Points

• Adjusted EBITDA for the quarter decreased by 13% to $45.2 million, attributed to timing differences in incentive dollar recognition.
• Net income attributable to Astrana Health Inc (NASDAQ:ASTH) fell by 27% compared to the prior year quarter.
• The company anticipates a negative $4 million adjusted EBITDA impact in Q4 due to the integration of Collaborative Health Systems.
• Medicaid business experienced higher-than-expected cost trends due to an acuity rate mismatch from Medicaid redetermination.
• The guidance for adjusted EBITDA was revised to a lower range, reflecting the impact of recent acquisitions and market conditions.

Q & A Highlights

Q: Can you remind us on the top line and bottom line impacts of adding CHS? A: In terms of pipeline for CHS in Q4, we're expecting about $200 million in additional top line. In terms of adjusted EBITDA, it's going to be about a $4 million hit.

Q: Can you elaborate on Proposition 35 in California and its impact on your business? A: We're pleased to see increased Medicaid funding in California. It's a population we invest in significantly. We expect to reach more Californians and build high-quality networks. Specific impacts are still under discussion with payers.

Q: How are you addressing geographic variations in capitated healthcare as you expand? A: Healthcare is very local, and we focus on reducing variability while empowering local providers. We standardize claims variation and care management protocols through our technology platform, while working with regional leaders to tailor networks and relationships.

Q: What are your thoughts on the medical cost trends and reinvestment strategies? A: Our AC trend is lower than national averages, and MA trends are also lower than regional trends. Medicaid is trending higher, but we expect stabilization. We reinvest in clinical and care management programs to provide necessary care.

Q: Are you seeing an increase in appetite for full risk from payer partners, and how does this affect your growth? A: We see payer partners open to moving towards full risk, which aligns with our strategy. We ensure we have the right ecosystem in place to manage members effectively, and we are seeing increased interest from plans.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.