P3 Health Partners Inc.

Good day and welcome to the P3 Health Partners Sports Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Ryan Halstead. Please go ahead, sir.

Thank you, operator, and thank you for joining us today. Before we proceed with the call, I would like to remind everyone that certain statements being made during this call are forward-looking statements under the U.S. federal security laws, including statements regarding our financial outlook and long-term target. These forward-looking statements are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC. The forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements. We will refer to certain non-GAAP financial measures on this call, including adjusted operating expense, adjusted EBITDA per member per month, medical margin, medical margin per member per month, medical margin per member per month for persistent lives, and cash burn. These non-GAAP financial measures are in addition to and not a substitute or superior to the measures of financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures. For example, other companies may calculate similarly titled non-GAAP financial measures differently. Please refer to the appendix of our earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. Information presented on this call is contained in the press release that we issued today and in our SEC filings, which may be accessed from the investors page of the P3 Health Partners website. I will now turn the call over to Dr. Abdu, CEO and co-founder of P3.

Thanks, Ryan. and welcome everyone to our year-end 2023 conference call. We would like to update you on our fourth quarter and full year 2023 financial results, as well as provide further thoughts in 2024. Our momentum remains robust. We are reaffirming 2024 guidance based on several key observations in the early part of the year. Number one, Starting with our membership, the annual enrollment period was a success and our January membership increased by approximately 11% from December to account of approximately 121,000 Medicaid Advantage and Medicare ACO reach lives. Number two, consistent with our stated objective of discipline and purposeful growth, we have broadened our service area by expanding into two adjacent counties in Arizona and six contiguous counties in Oregon, bringing us to a total of 23 counties at the start of 2024. Number three, our revenue in 2023 grew approximately 21% year over year. Our per member per month funding was up approximately 16% year over year, and despite the challenges Others in our sector have voiced around V24 to V28 and declines in reimbursement. As we indicated in earlier commentary, we are realizing an increase in our funding. Number four, medical margin improved by 118% from 2022 to 2023. You will hear from Atul that the increase in utilization is in part attributed to the EBITMS. What gives me further confidence in 2024 is that medical claim expense decreased by 26% in January from December, returning to a normalized level. Number five, the initiatives we put in place to enhance operational efficiency continue to materialize as platform expands. came down by 32% year-over-year to be a high single-digit percentage of revenue for the year as previously indicated. Our fourth quarter trend is even more impressive, and we believe it will establish the baseline for 2024. Number six, considering the adjustment to EBITDA were mostly non-cash items, Our net cash used in operation significantly improved over the first half of the year. Number seven. We continue towards our inflection point, and we expect to become EBITDA positive in 2024, consistent with our previous guidance of positive 20 to positive 40 million by end of year. Number eight. We continue to advance a robust pipeline of growth opportunities and expect positive development across multiple strategic partnership in the coming quarters. And finally, number nine, the team remains highly motivated to deliver in 2024 and combined with our early data points, we are confirming and reaffirming our previous 2024 guidance. In conclusion, we believe the demand for P3 model is as high as ever, and we believe that our demonstrated ability to manage the medical margin, improve funding, and grow membership are driving this demand. We remain confident in 2024 results based on the utilization trend we are seeing early in the year, despite the increase in December 2023. Our payer, provider, and health system discussions are ongoing, including potential joint venture and strategic partnership opportunities. I am encouraged by the tremendous strides the P3 team continues to make on the clinical and operational side. I am confident in our ability to achieve profitability this year and scale in the coming years. With that, I would like to turn it over to Atul Kavkar, our Chief Financial Officer.