P3 Health Partners Inc.

Good day and welcome to the P3 Health third quarter 2025 earnings 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 a touch tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the call over to Gabby Gabel of Investor Relations. Please go ahead.

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 made during this call are forward-looking statements under the U.S. federal securities 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 these forward-looking statements. We will refer to certain non-GAAP financial measures on this call, including adjusted operating expense, adjusted EBITDA, adjusted EBITDA per member per month, normalized adjusted EBITDA, medical margin, medical margin per member per month, and cash flow. These non-GAAP financial measures are an addition to and not a substitute for 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 Eric Kaufman, CEO of P3 Health Partners.

Thanks, Gabby. Good morning and thank you for joining us today. As we discuss our third quarter results, I want to begin by framing where we are in the evolution of the business. This continues to be a transitional year, one focused on improving stability, strengthening operating discipline, and maturing the clinical foundation of the organization. Throughout this period, we have remained focused on execution in our core markets, deeper provider alignment, and consistent delivery of our care enablement model. There are several positive indicators that reinforce the progress we are making. First, our capitated revenue is up roughly 6%. and normalized medical cost trend has remained flat year over year, even as cost trends across the industry have risen, demonstrating the impact of our clinical programs and utilization management efforts. Second, the operational improvement plan communicated last year is now embedded in the business, achieving over $100 million in EBITDA improvement year over year. Third, as discussed last quarter, we are moving forward with a strategic joint venture It will add approximately 13,000 fully accretive ACO members, improving profitability and cash flow, and providing a more stable membership mix. As we previously discussed, we have an additional 25,000 Medicare Advantage lives in the pipeline for 2026. Lastly, we are intentionally rationalizing our provider network to improve margin performance. This includes exiting groups that do not align clinically or economically and growing where our care enablement model consistently delivers strong outcomes. Taken together, these elements strengthen the foundation of the business and position us for meaningful profitability in 2026. With that context, I'll provide a brief overview of our quarterly results before Leif walks through the financials in more detail. For the quarter, membership was approximately 116,000 members, in line with expectations. Adjusted EBITDA loss for the quarter was $45.9 million, and year-to-date adjusted EBITDA loss was $85.2 million. Adjusting for prior year items, normalized adjusted EBITDA year-to-date was a loss of approximately $70 million, which we believe provides a clear reflection of the underlying performance of the business. As we discussed on our last call, there are $120 to $170 million of EBIT opportunities over the next five quarters, which we will cover in more detail. Despite the numbers for the quarter, we have addressed and strengthened the processes that support visibility and predictability. The core business continues to show positive signs of stabilization across medical management, quality performance, and alignment to population burden of illness. Given this, we are revising our full year adjusted EBITDA guidance to a range of minus 110 million to minus 95 million, which we believe accurately reflects our current expectation for the year. With that reset in place, I want to speak to the underlying performance of the business. The progress we are seeing in the core business is being driven by the care enablement model which embeds clinical support and data-driven workflows directly into provider practices. This approach is improving documentation accuracy, quality performance, and care coordination. We have strengthened utilization management and care management capabilities, improving predictability across inpatient, post-acute, and specialty spend. We are also deepening provider alignment. with a growing share of lives attributed to Tier 1 providers who consistently outperform lower engagement groups on both cost and quality metrics. For example, Tier 1 providers performed 17.4% higher in STARS heated gap closures compared to non-Tier 1 providers in the first half of this year. In addition, we are advancing payment integrity and contract hygiene efforts to ensure that terms are aligned with the value being delivered. This includes targeted renegotiations, standardization across payers, and clearer accountability for execution. Together, these initiatives are building a more stable, consistent, and scalable operating platform and reinforcing the earnings durability of the model as we move into 2026. As we look ahead, we are positioned to translate the operational progress we've made this year into meaningful earnings expansion in 2026. We continue to execute against the $120 to $170 billion EBITDA expansion opportunity driven by improved alignment with our population's burden of illness, representing roughly 40% of the total opportunity, scaling of clinical and operational programs that are delivering measurable impact, which represents roughly 30% of the opportunity, contractual improvements both secured and in progress, which represents roughly 20% of the opportunity, and the remaining portion made up of product and benefit environment stabilization, which we've seen from our partners going into 2026. The work underway to strengthen provider alignment Embedded care enablement model and standardized clinical and financial workflows is laying the foundation for earnings expansion in 26, and a model is becoming more stable and scalable over time. With that, I'll turn it over to Dr. Amir Bakas to discuss our clinical performance in more depth.