agilon health, inc.

Thank you for your patience, everyone. The Agilent Health fourth quarter 2025 earnings conference call will begin shortly. During the call, you can register to ask questions by pressing star followed by one on your telephone keypad. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you for your patience, everyone. The Agilent Health Support Quarter 2025 Earnings Conference call will begin in one minute time. In the meantime, you can register to ask questions by pressing star followed by one on your telephone keypad. Thank you. Thank you. Hello and welcome to the Agilent Health fourth quarter 2025 earnings conference call. My name is Carla and I will be coordinating your call today. During the presentation, you can register to ask questions by pressing star followed by 1 on your telephone keypad. If you change your mind, please press star followed by 2. I will now hand you over to your host, Evan Smith, to begin. Please go ahead when you're ready.

Thank you, operator. Good afternoon, and welcome to the call. With me, our Executive Chairman, Ron Williams, and our CFO, Jeff Schwanake. Following our prepared remarks, we will conduct a Q&A session. Before we begin, I would like to remind you that our remarks and responses to questions may include forward looking statements. Actual results may differ materially from those stated or implied by forward looking statements due to risks and uncertainties associated with our business. These risks and uncertainties are discussed in our SEC filings. Please note that we assume no obligation to update any forward looking statements. Additionally, Certain financial measures we will discuss in this call are non-GAAP financial measures. We believe that providing these measures helps investors gain a better and more complete understanding of our financial results, and it's consistent with how management views our financial results. A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures is available in the earnings press release and the Form 8-K filed with the SEC. And with that, let me turn the call over to Ron.

Thank you, Evan, and thank you all for joining us today. 2025 was a year for building the foundation of sustainable performance through intense focus on operational discipline. While we are navigating a comprehensive transformation, our mission remains unchanged, empowering physicians to lead the transformation of healthcare through our total care model. The fundamental resilience and effectiveness of our partnership model demonstrates a durable long term growth runway through trusted relationships with community based physicians. These individuals are leaders in their communities and have an average 10 year plus relationship with their patients. Creating deep community ties that are difficult to replicate. While we are not satisfied with our financial performance in 2025, we made tangible progress in the areas that matter most for a durable turnaround, which Jeff will provide more detail on in a moment. Our tangible progress includes the advancement of our clinical pathways and quality programs, our disciplined approach to payer relations, and our continued focus on data-driven performance. All are driving greater clarity and sustainability across Agilent's scalable operating model to support long-term value-based care success for our total care model. Our preparation for the future includes applying our continued discipline and focus across these critical areas as we navigate the potential of a lower than expected rate increase in 2027 following CMS's advance rate. We believe the advance rate notice does not sufficiently reflect the ongoing population-wide increase in cost and utilization due to growing chronic disease burden and aging the Medicare population. In addition, Our further review of the risk model revision and normalization outlined in the advance notice, we believe the potential impact will be generally in line with the national average. However, we believe that our clinically focused program remains a critical part of the long-term answer. Continued advancement of our burden of illness and clinical pathway initiatives with our partners will help to mitigate the impact of the risk model changes as they did for V28. In addition, given the focus of our model is the assessment of conditions at the point of care with diagnosis tied to documentation from a visit, we believe we have minimal exposure to unlinked or audio only coding. We believe our ability to differentiate on the management of medical costs and quality outcomes should continue to position us well with health plans and physicians with the expectation that the rate and cost spread will ultimately normalize over time. Throughout the year, we advanced several key transformation priorities, which are embedded in our expectation for material improvement in year-over-year medical margin and adjusted EBITDA. At the midpoint, we expect revenue of $5.5 billion, medical margin of $325 million, and adjusted EBITDA at breakeven. Our 2026 outlook reflects the expected positive impacts from the team's execution on payer contracting, clinical and quality programs, cost initiatives, as well as premium increases. We also anticipate benefiting from payer benefit design changes, including increases to deductibles and maximum out of pocket expenses, as well as reductions in supplemental benefits. While this is expected to benefit cost trend, we are assuming that net cost trends will remain elevated in 2026 at approximately 7%. Let me now reinforce key areas we believe are supporting a stronger foundation for execution in 2026 and forward. First, we enter 2026 with an enhanced financial data pipeline. and strengthened actuarial and analytical capabilities, improving financial discipline, clinical visibility, and overall predictability. We're increasingly able to identify variants earlier and intervene faster. As we have previously stated, we now have greater visibility into detailed revenue and claims information with the ability to calculate member level risk scores utilizing our enhanced data pipeline, a key difference versus prior years. In addition, we believe the pipeline, AI-assisted advances for high-risk member identification, and diagnosis through our burden of illness program, as well as execution on clinical pathways, will deliver results over and above the final year of the V28 impact. Second, through a disciplined approach to better underwriting the risks we take by contracting, Agilon intentionally prioritized economic sustainability over membership growth. This approach included a willingness to pause growth, walk away from unprofitable payer contracts, and restructuring arrangements with certain payers in specific markets temporarily migrating to a care coordination fee model. as opposed to full risk. As a result, we expect to benefit from incremental percentage of premium and enhance quality incentives for the value we deliver. A reduction in Part D exposure to less than 15% of our membership, as well as shorter average contract term lifts, which we expect will help us better navigate changing market dynamics, including exposure to adverse policy, utilization, or payer behaviors. In addition, our disciplined and rigorous recontracting process led us to exit certain payer contracts in specific markets. These contracts did not meet our minimum threshold of profitability. We expect membership will be reduced to approximately 430,000 members in 2026, including approximately 25,000 members in no downside care coordination fee arrangements with upside performance-based fees. We believe care coordination fee arrangements provide a long-term risk-adjusted growth opportunity to potentially move these members when appropriate to a full risk arrangement. Third, we advance clinical pathways which are evidence-based data-enabled care models designed to help our partners proactively identify, diagnose, and manage the care journey for patients with high impact chronic conditions. We believe these pathways, including heart failure, dementia, and COPD, can materially affect utilization, quality, and total cost of care. We concluded the year with active heart failure programs adopted in over 90% of our network. Congestive heart failure, or CHF, is the most mature and scaled pathway, serving as a blueprint for other conditions, including early identification, expanded support for guideline-directed medical therapy, and appropriate end-of-life care guided by patient preference and goals. Palliative care is also a core extension of our total care model. It's designed to proactively support patients with advanced illness, often those with late stage heart failure, COPD, cancer, or significant multi morbidity. While only representing a small subset of our population, we have increased the number of patients engaged with this program. Clinically, it improves quality of life and care coordination. Financially, it helps us reduce avoidable late stage utilization, particularly inpatient admissions and emergency care. Most importantly, the patients and their families have a better experience and clearer goal of care discussions and more coordinated support. Fourth are our quality initiatives. Our quality programs continue to mature with stronger measuring discipline and improved care gap closures. Quality isn't just a scorecard for us, it's a lever for patient outcomes, member experience, cost, and revenue. The strategy recognizes that primary care performance directly drives the majority of STAR measures, making Agilent's physician-centric model structurally advantaged and an area of increasing focus by payers. Our value-based care model enables exceptional quality performance by providing the necessary tools and support to help our network deliver the highest quality care. To drive additional performance in 2025, we strengthen our data access and analytic capabilities to further enhance our ability to identify care gaps. We also expanded our capabilities for providers to close care gaps in areas such as diabetic eye exams. Our network consistently delivers quality performance for measures we can influence and control ahead of benchmarks at 4.2 stars on a composite basis across the platform, maximizing quality bonus revenue while reinforcing position alignment. In 2026, we believe we have the opportunity to more than double the incentive contribution. As we indicated last quarter, 2024 results were very strong in ACO REACH and an improvement over 2023 results. ACO REACH continues to demonstrate the value creation Agilon can deliver and is shaping the way we are transforming our MA business. CMS recently announced the lead program long-term enhanced ACO design intended to launch after the REACH model concludes at the end of 2026. LEAD is designed as a 10-year voluntary model with a longer planning horizon, benchmarking enhancements, and an emphasis on better serving high needs patients. We see LEAD as a positive signal. It reinforces CMS commitment to value-based care with a longer-term structure that can support sustained investment and consistent operating execution. Lastly, we executed on initiatives to reduce operating costs and controls. we believe we made meaningful progress on forecasting performance reporting and market level accountability in 2025. these are critical to improving decision speed and execution we executed on 35 million dollars in operating cost reductions above what we communicated at the end of the third quarter this will enable greater operating leverage from the platform and support our business objectives In summary, we are executing with urgency. While cost trends are expected to remain elevated, we believe our transformation actions will support improved operating performance. We plan to build on the progress made last year with a continued emphasis on discipline execution, collaboration, and measurable positive impact for patients. We expect 2026 to mark a strong improvement in medical margin and adjusted EBITDA supported by renegotiating with health insurers to better reflect the reality of today's environment, care costs, and plan initiated decisions. A heightened focus and investments in quality performance as health plans continue to increase the incentives available for top-quantile performance. Continued progress to improve patient outcomes and reduce total cost of care through proactive chronic disease management. and ongoing development and expansion of clinical pathways. Strengthening provider engagement and reducing variability in performance across markets and practices. Optimizing our cost structure. Lastly, we will continue to advance initiatives which we expect to support continued performance improvement in 2027. With that, I'll turn it over to Jeff to walk through the financial results.