Oscar Health, Inc.

Good morning. My name is Jeannie and I will be your conference operator today. At this time, I would like to welcome everyone to Osprey Health's fourth quarter and full year 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Today, we ask you to limit yourself to one question and one follow-up. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you. I will now turn the call over to Chris Podachar, Vice President of Treasury and Investor Relations.

Good morning, everyone. Thank you for joining us for our fourth quarter and full year 2025 earnings call. Mark Berlini, Oscar Hell's Chief Executive Officer, and Scott Blackley, Oscar Hell's Chief Financial Officer, will host this morning's call. This call can also be accessed through our investor relations website at ir.highoscar.com. Full details of our results and additional management commentary are available in our earnings release, which can be found on our investor relations website at ir.highoscar.com. Any remarks that Oscar makes about the future constitute forward-looking statements within the meaning of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in our quarterly report on Form 10-Q for the period ended September 30, 2025, filed with the Securities and Exchange Commission, and other filings with the SEC, including our annual report on Form 10-K for the period ended December 31, 2025, to be filed with the SEC. Such forward-looking statements are based on current expectations as of today. OSCAR anticipates that subsequent events and developments may cause estimates to change. While the company may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. A reconciliation of these measures to the most directly comparable GAAP measures can be found in the fourth quarter and full year 2025 earnings press release available on the company's investor relations website at ir.highoscar.com. We have not provided a quantitative reconciliation of estimated full year 2026 adjusted EBITDA as described on this call to GAAP net income because OSCAR is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. With that, I will turn the call over to our CEO, Mark Bertolini.

Good morning. Thank you, Chris, and thank you all for joining us. Today, Oscar announced fourth quarter and full year 2025 results in the 2026 outlook. We reported total revenue of $11.7 billion, a 28% increase year over year. Our SG&A expense ratio of 17.5% improved by approximately 160 basis points over the prior year. reflecting continued efficiency gains through growth, disciplined expense management, and AI and technology advancements across the business. MLR increased 570 basis points year over year to 87.4%, and our 2025 loss from operations was $396 million, primarily due to higher market morbidity, resulting in a higher risk adjustment payable. Oscar is on track to return to profitability this year, we expect a significant year-over-year improvement of nearly $750 million in earnings from operations in 2026, representing the midpoint of our guidance. Scott will discuss our financials in more detail shortly. Before I get into our business highlights, I want to provide an update on the performance of the individual market. Overall, 2025 was a reset year for the industry. The industry-wide increase in market morbidity due to Medicaid lives entering the market and program integrity initiatives shifted market dynamics. Oscar embraced the change and positioned the company for strong top-line growth and margin expansions in 2026. We took decisive actions with a disciplined pricing, distribution, and product strategy to go after profitable growth as competitors pulled back or exited the market. Our pricing strategy always assumed the expiration of enhanced premium tax credits. Our final 2026 rates also reflected higher market morbidity, elevated trend, and the effects of program integrity initiatives. Early 2026 open enrollment results demonstrate the resilience of the individual market. The latest CMS data indicates overall market membership of 23 million lives, representing a better than expected decline of 5% year over year. We expect many passively enrolled members facing higher premiums will exit the market when the grace periods expire. We will therefore have greater clarity on final paid membership and market contraction when CMS releases final enrollment data mid-year. Current enrollment data indicates market contraction may track toward the lower end of our original projection of 20 to 30 percent. The individual market stability underscores the priority consumers place on maintaining health coverage. More small business owners, working Americans, and gig workers are running the market as group insurance fails to meet their affordability needs. The individual market's fundamental characteristics, combined with a larger and growing addressable market, can absorb morbidity changes without dramatic trend impacts. Oscar is in a strong position to continue leading the individual market and defining the future of consumer-centered healthcare for all Americans. Now I will review our business highlights. The 2026 open enrollment period was a record for the company. Oscar delivered another year of above market growth. We are privileged to serve 3.4 million members as of February 1st, 2026. We expect to start the second quarter with approximately 3 million paid members, a 58% increase year over year. Member retention remains solid across the book, driven by our suite of affordable products, agentic AI features, and a superior member experience. Oscar's market share across our footprint increased from 17% in 2025 to 30% in 2026. We continue to grow IFP and ICRA membership in prominent service areas, including new and existing markets in Arizona, Florida, New Jersey, and Texas. The team created new cost-effective bronze and gold plans to support consumers losing enhanced premium tax credits and expanded broker partnerships by 60%. to manage distribution across the overall market. Our integrated strategy, which we deployed well ahead of enhanced premium tax credit expiration, positioned us to profitably capture new membership in the active shopping season. Product innovation was a key growth driver of this open enrollment. We launched several new lifestyle offerings tailored to certain conditions and stages of life. These include Hello Menno, the first menopause plan in the ACA, Buena Salud, our Spanish-first experience for members with diabetes, and Hy-Vee Health with Oscar, our landmark ecra plan. Our lifestyle products are attracting new consumer segments and creating a loyal customer base. Members enrolled in our lifestyle products have above-average retention rates and are 50% more likely to recommend Oscar to family and friends. They are also more likely to come in as direct enrollments, demonstrating the greater attachment to our brand. Our deep understanding of the consumer and the strength of our product experience continue to create powerful entry points for consumers, positioning us for long-term IFP and ICRA growth. Oscar investments in AI are creating efficiencies across the business as we grow. We lowered administrative costs by 160 basis points year over year, while significantly increasing membership. AI is integrated across the Oscar platform, enabling teams to automate routine tasks. efficiently scale our service operations, and improve decision support. For example, our agentic AI bot for care guides reduced response times by 67% during peak and open enrollment period. AI is also central to our member experience. Oswell, our industry first health agent, now completes 86% of questions received from members with high accuracy and quality. We continue to embed Oswell across our product portfolio to help members take control of their health. The impact of AI on our efficiency and the quality of the interactions for our members is unparalleled in its pace in my 40 years in this industry. In summary, Oscar's discipline pricing, record high membership and top line growth lay a strong foundation for this year. We are well positioned to significantly expand margins and return to profitability in 2026. Our strategic priorities position Oscar to shape the next evolution of the individual market in the following ways. First, accelerate national IFP and ICRA expansion. Second, create lifestyle products with an exceptional consumer experience. And third, drive operational excellence through AI and frictionless execution. The individual market is the engine of consumer-driven healthcare. When consumers choose how and where to spend their money, they exploit inefficiencies and improve the quality of the interaction. We see in our own growth the power of designing products around consumer needs. That's the promise of the individual market, the promise of choice, the promise of long-term innovation, innovation our country needs to turn healthcare into a market that fits real lives and creates meaningful coverage for life. I want to thank our Oscar team for their dedication to our customers and for delivering a successful open enrollment. Our 12 years of experience in the individual market will drive results for 2026 and beyond. I will now turn the call over to Scott. Scott?