• Q4 Revenue: $665.2 million, an 88.4% increase year-over-year.
• Full Year 2024 Revenue: $2.03 billion, a 47% increase from the prior year.
• Q4 Adjusted EBITDA: $35 million, reflecting 20.8% growth year-over-year.
• Full Year 2024 Adjusted EBITDA: $170.4 million, up 16.2% year-over-year.
• Care Partners Segment Growth: 52% year-over-year to $1.95 billion.
• Membership Growth in Care Partner Segment: 55% in 2024.
• Full Risk Arrangements Revenue: 73% of total capitation revenue by end of 2024.
• Cash and Cash Equivalents: $288.5 million at year-end 2024.
• Total Debt: $471.8 million, including lease liabilities.
• Prospect Health Systems Revenue: $1.2 billion in 2024.
• 2025 Revenue Guidance: $2.5 billion to $2.7 billion.
• 2025 Adjusted EBITDA Guidance: $170 million to $190 million.
• Q1 2025 Revenue Guidance: $600 million to $650 million.
• Q1 2025 Adjusted EBITDA Guidance: $32 million to $37 million.

• Warning! GuruFocus has detected 5 Warning Signs with ASTH.

Release Date: February 27, 2025

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 significant revenue increase of 88.4% year-over-year in Q4 2024, reaching $665.2 million.
• The company achieved a 47% increase in total revenue for the full year 2024, amounting to $2.03 billion.
• Astrana Health Inc (NASDAQ:ASTH) experienced a 55% membership growth in its care partner segment, driven by acquisitions and organic growth.
• The company is making strategic investments in automation and AI-driven enhancements, expected to yield $10 million in operational efficiencies by early 2026.
• Astrana Health Inc (NASDAQ:ASTH) successfully expanded its proprietary care enablement platform, enhancing operational excellence and supporting new partnerships.

Negative Points

• Astrana Health Inc (NASDAQ:ASTH) faced a $13 million drag on earnings due to strategic investments in growth initiatives and integration capabilities.
• The company experienced utilization headwinds in 2024, with a 5.3% realization trend, which is approximately half the national blended average.
• Medicaid trends were higher than expected, impacting earnings from the Medicaid segment due to a mismatch between reimbursement rates and cost trends.
• The acquisition of CHS is expected to approach break-even late in 2025, indicating a potential short-term financial burden.
• Astrana Health Inc (NASDAQ:ASTH) anticipates $15 million in costs associated with strategic investments in integration, automation, and AI in 2025, impacting short-term profitability.

Q & A Highlights

Q: Can you explain the factors affecting the adjusted EBITDA guidance for 2025, particularly the margin decline? A: Brandon Sim, President and CEO, explained that the margin decline is primarily due to the integration of Collaborative Health Systems (CHS), which is expected to break even late in the year. The guidance assumes a consistent 4.5% trend and continued investments, impacting the overall margin.

Q: How do you plan to achieve your goal of deleveraging to below 2 times within nine months post-acquisition? A: Brandon Sim noted that free cash flow was affected by one-time items in 2024, but these are expected to be recouped in 2025. Historically, free cash flow conversion has been around 45% of adjusted EBITDA, and this is expected to increase in 2025.

Q: With Proposition 35 passed and redetermination headwinds subsiding, how will this affect Medicaid trends and earnings? A: Brandon Sim stated that while Medicaid trends were higher than expected in 2024, no rate relief from Proposition 35 is included in the 2025 guidance. The guidance remains conservative, assuming similar trends as in 2024 without renegotiations or additional reimbursement.

Q: What are the expected costs and impacts of the CHS and Prospect Health acquisitions? A: Brandon Sim mentioned that around $5 to $10 million in integration costs are expected, regardless of when the Prospect transaction closes. The 2025 guidance includes these expenses, and the Prospect acquisition is anticipated to contribute approximately $81 million in adjusted EBITDA.

Q: How are the Houston and Las Vegas markets performing, and what is the outlook for these regions? A: Brandon Sim reported that both markets are ramping up as expected. Nevada is expected to break even in early 2025, while Texas is on track to break even in 2025 and turn a profit by late 2025 or early 2026. Non-California business is projected to represent around 15% of revenue in 2025.

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