Apollo Medical Holdings, Inc.

Good day and welcome to your Apollo Medical Holdings second quarter 2022 financial results call. All lines have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero to reach a live operator. At this time, it is my pleasure to turn the floor over to Caroline Son of the Equity Group. The floor is yours. Please go ahead.

Thank you, operator, and hello, everyone. Thank you for joining us. The press release announcing Apollo Medical Holdings, Inc.' 's results for the second quarter and six months ended June 30, 2022. It's available at the Investors section of the company's website at www.apollomed.net. To provide some additional background on its results, the company has made a supplemental deck available on its website. A replay of this broadcast will also be made available at Apollo Med's website after the conclusion of this call. Before we get started, I would like to remind everyone that this conference call and any accompanying information discussed herein contains certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as anticipate, believe, expect, future, plan, outlook, and will, and include, among other things, statements regarding the company's guidance for the year ending December 31, 2022, continued growth, acquisition strategy, ability to deliver sustainable long-term value, ability to respond to the changing environment, operational focus, strategic growth plans, and merger integration efforts, as well as the impact of the 2020 novel coronavirus or COVID-19 pandemic and other variants on the company's business, operations, and financial results. Although the company believes that the expectations reflected in its forward-looking statements are reasonable as of today, Those statements are subject to risks and uncertainties that could cause the actual results to differ dramatically from those projected. There can be no assurance that those expectations will prove to be correct. Information about the risks associated with investing in ApolloMed is included in its filings with the Securities and Exchange Commission, which we encourage you to review before making an investment decision. The company does not assume any obligation to update any forward-looking statements as a result of new information, future events, changes in market conditions, or otherwise, except as required by law. Regarding the disclaimer language, I would also like to refer you to slide two of the conference call presentation for further information. For those of you following along with the accompanying supplement, there is an overview of the company on slide three. On today's call, the company's co-chief executive officer, Brandon Sim, will discuss second quarter and first half 2022 highlights and the latest operational developments. Interim chief financial officer, Chan Basha, will follow with a review of the parliament's results for the second quarter and the first six months ended June 30th, 2022. Brandon will conclude the remarks with an update on the company's outlook and long-term growth strategy before opening the floor for questions. With that, I'll turn the call over to Apollo Med's Co-Chief Executive Officer, Brandon Sim. Please go ahead, Brandon.

Thank you, Caroline. We were pleased to deliver another solid quarter of profitability in the second quarter of 2022. Even as we continue to see utilization across our organization increase to pre-pandemic levels, As a result of strong organic membership growth within our core IPAs, a more favorable membership mix, and participation in a value-based care model for the Medicare fee-for-service population, capitated revenue grew 57% year-over-year, allowing us to achieve a 54% increase in total revenue, reporting $269.7 million for the three months ended June 30, 2022. As in Q1, operating expenses increased in line with revenues in Q2. First, on the cost of services side, although our medical loss ratio, or MLR, for our partnered risk-bearing provider entities increased by 150 basis points relative to last quarter, we are still within our previously disclosed range of 4% to 6% increase in MLR for the year, which has already been taken into account in our guidance. We see this as an expected consequence of medical utilization returning to pre-COVID levels. We also continue to incur higher G&A expense related to the hiring of additional key personnel and staff to support our operational growth and expansion into both new geographies and new lines of business, as well as an increase in stock-based compensation. Despite the investments we've made, not only to increase revenue, but also to fuel operational growth into new regions, G&A expenses as a percentage of total revenue actually decreased by 70 basis points, from 8.1% in Q2 of last year to 7.4% in Q2 of this year. This demonstrates the operating leverage our platform provides us, even as we grow our business rapidly. Despite our continued membership growth, increased utilization trends, and ongoing investment in people and infrastructure, we remain profitable, reporting net income attributable to ApolloMed, of $11.4 million, or a diluted EPS of 25 cents for the quarter. Adjusted EBITDA was $36.9 million, up 14% from $32.4 million in the prior year period. Based on current trends within our businesses, we are pleased to be reiterating guidance for full year 2022 revenues, as well as net income EBITDA and adjusted EBITDA. As previously disclosed, we anticipate at least 36% growth year-over-year on the top line to between $1.055 billion to $1.085 billion and adjusted EBITDA of between $136 million to $166 million. In the second half of 2022, we continue working to expand our presence in existing California markets as well as explore opportunities to move into new regions through a series of acquisitions and partnerships with key provider groups that share our vision of empowering independent positions. Our business development and M&A efforts have continued to benefit from the addition of Orma Health to our tech stack, and the pipeline remains incredibly robust. With that, I'll turn it over to John to review our financial results.