0001831097FALSE00018310972023-11-022023-11-02

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________________
FORM 8-K
_____________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 2, 2023
_____________________________________________
agilon health, inc.
(Exact name of Registrant as Specified in Its Charter)
_____________________________________________
Delaware001-4033237-1915147
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
6210 E Hwy 290, Suite 450
Austin, TX
78723
(Address of Principal Executive Offices)(Zip Code)
Registrant’s Telephone Number, Including Area Code: 562 256-3800
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
_____________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common stock, par value $0.01 per shareAGLThe New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02 Results of Operations and Financial Condition.
On November 2, 2023, agilon health, inc. (“agilon” or the “Company”), a Delaware corporation, issued a press release setting forth its financial results for the three and nine months ended September 30, 2023. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.
On October 31, 2023, agilon completed the disposition of its MDX Hawaii operations. On November 2, 2023, to assist investors’ review and understanding of agilon’s operating results, the Company issued supplemental financial information which summarize certain unaudited non-GAAP financial information, excluding MDX Hawaii for the periods reflected therein. This supplemental financial information is furnished herewith as Exhibit 99.2 and is incorporated by reference herein
The information set forth in this Item 2.02 of this Current Report on Form 8-K and the related information in Exhibits 99.1 and 99.2 attached hereto is being furnished herewith, and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference in any filing with, the Securities and Exchange Commission under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference therein.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits
Exhibit
Number
Description
99.1
99.2
104Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
agilon health, inc.
Date:November 2, 2023By: /s/ TIMOTHY S. BENSLEY
Timothy S. Bensley
Chief Financial Officer


Exhibit 99.1
imgcovera.jpg
agilon health Reports Third Quarter 2023 Results

Revenue increased 75% to $1.22 billion, Medicare Advantage membership increased 58% to 420,300, and total members live on the agilon platform grew to 508,000
Strong performance across core partner markets supported by membership growth and profitability gains in Medicare Advantage and ACO REACH
Sale of MDX Hawaii enables agilon to focus on its core partner markets
AUSTIN, T.X., November 2, 2023 – agilon health, inc. (NYSE: AGL), the trusted partner empowering physicians to transform health care in our communities, announced results for the third quarter ended September 30, 2023.
“Momentum across our business remains strong, driven by the power of agilon’s physician network and platform to improve patient outcomes across the Medicare Advantage and ACO REACH populations,” said Steve Sell, chief executive officer. “Our decision to sell MDX Hawaii and focus on our core partner markets, which leverage a common operating model, will better position agilon, our partner groups, and their patients for continued success in 2024 and beyond.”
Third Quarter 2023 Results:
•Total members live on the agilon platform increased to 508,000 as of September 30, 2023, including 420,300 Medicare Advantage members and 87,700 ACO REACH beneficiaries. Medicare Advantage membership increased 58%, with 9% growth across same geographies.
•Total revenue of $1.22 billion increased 75% during the third quarter 2023, compared to $695 million in the third quarter 2022. Gross profit of $30 million in the third quarter 2023, compared to $26 million in the third quarter 2022. Net loss of $31 million in the third quarter 2023, compared to a net loss of $31 million in third quarter 2022.
•Medical margin of $108 million increased 42% during the third quarter 2023, compared to $76 million in the third quarter 2022. Medical margin for the third quarter 2023 included a negative $8 million net impact from prior year claims and revenue, consisting of $9 million in prior year claims and $1 million in prior year revenue.
•Adjusted EBITDA loss of $6 million in the third quarter 2023, compared to an Adjusted EBITDA loss of $26 million in the third quarter 2022. Adjusted EBITDA included $18 million in geography entry costs in the third quarter 2023, compared to $21 million in the third quarter 2022. ACO REACH contributed $18 million to Adjusted EBITDA during the third quarter 2023, compared to a $3 million loss in the third quarter 2022.
•Due to the sale of MDX Hawaii, which closed on October 31, 2023, agilon is providing Adjusted (Non-GAAP) results for the company’s core partner markets, which exclude MDX Hawaii. Adjusted (Non-GAAP) results for agilon’s core partner markets for the third quarter 2023 included: Medicare Advantage membership of 384,100, total revenues of $1,137 million, gross profit of $37 million, medical margin of $111 million, net loss of $22 million, and Adjusted EBITDA of $6 million. See accompanying schedules with reconciliations to the most comparable GAAP measure.


Reported – Key Financial and Operating Metrics ($M):
(Third Quarter 2023 vs. 2022)

Three Months
Ended September 30,
Change
20233
20224
% YoY
Medicare Advantage Members1
420,300266,60058%
ACO REACH Members1,2
87,70089,400(2%)
Total Members Live on Platform1,2
508,000356,00043%
Avg. Medicare Advantage Members425,100270,10057%
Total revenues $1,216$69575%
Gross Profit $30$2618%
Medical Margin$108$7642%
Net Loss($31)($31)NM
Adjusted EBITDA ($6)($26)NM
Geography Entry Costs $18$21(14%)
1.Membership metrics reflect end of period results.
2.agilon’s ACO REACH entities are not included within its consolidated financial results.
3.Third quarter 2023 results include the following attributed to MDX Hawaii: MA membership of 36,200, avg. MA members of 36,200, revenues of $79 million, gross profit of negative $6 million, medical margin of negative $3 million, net loss of $9 million, and Adjusted EBITDA of negative $11 million.
4.Third quarter 2022 results include the following attributed to MDX Hawaii: MA membership of 38,700, avg. MA members of 38,700, revenues of $81 million, gross profit of negative $4 million, and medical margin of $0 million.
Adjusted to Exclude MDX Hawaii (Non-GAAP) – Key Financial and Operating Metrics ($M)1:
(Third Quarter 2023 vs. 2022)

Three Months
Ended September 30,
Change
20232022% YoY
Medicare Advantage Members2
384,100227,90069%
ACO REACH Members2, 3
87,70089,400(2%)
Total Members Live on Platform2, 3
471,800317,30049%
Avg. Medicare Advantage Members388,900231,40068%
Total revenues $1,137$61485%
Gross Profit $37$3023%
Medical Margin$111$7646%
1.The Adjusted (non-GAAP) financial and operating metrics exclude MDX Hawaii in both periods presented as a result of the company’s disposition, which closed on October 31, 2023; these financial metrics are non-GAAP, see accompanying schedules with reconciliations to the most comparable GAAP measure.
2.Membership metrics reflect end of period results.
3.agilon’s ACO REACH entities are not included within its consolidated financial results.


Reported – Key Financial and Operating Metrics ($M):
(YTD 2023 vs. 2022)

Nine Months
Ended September 30,
Change
20233
20224
% YoY
Medicare Advantage Members1
420,300266,60058%
ACO REACH Members1,2
87,70089,400(2%)
Total Members Live on Platform1,2
508,000356,00043%
Avg. Medicare Advantage Members411,500261,20058%
Total revenues $3,501$2,01873%
Gross Profit $165$10261%
Medical Margin$408$24467%
Net Loss($32)($50)NM
Adjusted EBITDA $28($20)NM
Geography Entry Costs $49$3540%
1.Membership metrics reflect end of period results.
2.agilon’s ACO REACH entities are not included within its consolidated financial results.
3.Year to date 2023 results include the following attributed to MDX Hawaii: MA membership of 36,200, average MA members of 36,200, revenues of $241 million, gross profit of $0, medical margin of $8 million, net loss of $4 million, and Adjusted EBITDA of negative $14 million.
4.Year to date 2022 results include the following attributed to MDX Hawaii: MA membership of 38,700, average MA members of 38,800, revenues of $245 million, gross profit of $7 million, and medical margin of $16 million.
Adjusted to Exclude MDX Hawaii (Non-GAAP) – Key Financial and Operating Metrics ($M)1:
(YTD 2023 vs. 2022)

Nine Months
Ended September 30,
Change
20232022% YoY
Medicare Advantage Members2
384,100227,90069%
ACO REACH Members2, 3
87,70089,400(2%)
Total Members Live on Platform2, 3
471,800317,30049%
Avg. Medicare Advantage Members375,300222,40069%
Total revenues $3,260$1,77484%
Gross Profit $165$9572%
Medical Margin$401$22875%
1.The Adjusted (non-GAAP) financial and operating metrics exclude MDX Hawaii in both periods presented as a result of the company’s disposition, which closed on October 31, 2023; these financial metrics are non-GAAP, see accompanying schedules with reconciliations to the most comparable GAAP measure.
2.Membership metrics reflect end of period results.
3.agilon’s ACO REACH entities are not included within its consolidated financial results.


Sale of MDX Hawaii:
On October 27, 2023, agilon health entered into a definitive agreement to sell MDX Hawaii and its related operations. Acquired by agilon in 2016, MDX Hawaii is a provider network supporting approximately 600 physicians with fully-delegated risk contracts and management services organization capabilities, including claims processing and utilization management. MDX Hawaii’s physician network provides care to approximately 36,000 members covered by two Medicare Advantage health plans on the islands of Oahu, Maui, and Kauai.
Management believes the sale of MDX Hawaii will allow agilon to focus on the company’s core partner markets in the continental United States. In these markets, agilon leverages a common operating structure centered around long-term, joint venture partnerships with physician groups and health systems, and non-delegated, full-risk contracts across multiple health plans.
The sale of MDX Hawaii and its related operations closed on October 31, 2023. Financial terms are not being disclosed.
ACO REACH Performance in 2022:
On October 23, 2023, agilon health announced that its ACO REACH (ACOs) entities achieved $107 million in gross savings (9.7% gross savings rate), including $24 million savings to the Medicare Trust Fund, during the 2022 performance year. agilon’s ACOs achieved a quality score of 99.8%, with 7 of 8 ACOs achieving a 100% quality score during the 2022 performance year. agilon ACOs performed better than mean performance across all four quality measures including: All Condition Readmissions, Unplanned Admissions for Patients with Multiple Chronic Conditions, Timely Follow Up, and the CAHPS Survey.
Capital Position and Balance Sheet:
agilon health’s balance sheet as of September 30, 2023 included cash, cash equivalents and marketable securities of $574 million and total debt of $40 million.
Outlook for Fiscal Year 2023 ($M):
Year Ended December 31, 2023
Updated Guidance1
Previous Guidance
LowHighLowHigh
Medicare Advantage (MA) Members2
384,000386,000412,000415,000
ACO REACH Members2,3
85,00090,00085,00090,000
Total Members Live on Platform2
469,000476,000497,000505,000
Avg. Medicare Advantage (MA) Members377,000378,000409,000410,000
Total Revenues$4,310$4,320$4,525$4,540
Medical Margin $455$470$500$530
Adjusted EBITDA4
$6$18$0$23
Geography Entry Costs5
$69$67$75$68
1.Updated guidance for the fiscal year 2023 excludes MDX Hawaii.
2.Membership reflects management’s outlook for end of period.
3.agilon’s partnered ACO REACH entities are not consolidated within its financial results.
4.Adjusted EBITDA contribution from ACO REACH is now expected to be approximately $39 million for fiscal year 2023. Management’s previous outlook for Adjusted EBITDA contribution from ACO REACH was $30 million to $35 million for fiscal year 2023.


5.Geography Entry Costs represent the corresponding expense included in the low-end and high-end of management’s outlook for Adjusted EBITDA.
Outlook for Fourth Quarter 2023 ($M)1:
Quarter Ended
December 31, 2023
LowHigh
Medicare Advantage (MA) Members2
384,000386,000
ACO REACH Members2,3
85,00090,000
Total Members Live on Platform2
469,000476,000
Avg. Medicare Advantage (MA) Members383,000385,000
Total Revenues$1,050$1,060
Medical Margin$55$70
Adjusted EBITDA4
($36)($24)
Geography Entry Costs5
$20$18
1.Guidance for the fourth quarter 2023 excludes MDX Hawaii.
2.Membership reflects management’s outlook for end of period.
3.agilon’s partnered ACO REACH entities are not consolidated within its financial results.
4.Adjusted EBITDA contribution from ACO REACH is expected to be approximately $6 million for the fourth quarter 2023.
5.Geography Entry Costs represent the corresponding expense included in the low-end and high-end of management’s outlook for Adjusted EBITDA.
We have not reconciled guidance for Medical Margin to Gross Profit or Adjusted EBITDA to net income (loss), the most comparable GAAP measures, and have not provided forward-looking guidance for net income (loss) in each case because of the uncertainty around certain items that may impact Gross Profit or net income (loss), including non-cash stock-based compensation.
Webcast and Conference Call:
agilon health will host a conference call to discuss third quarter 2023 results on Thursday, November 2, 2023 at 4:30 PM Eastern Time. The conference call can be accessed by dialing (833) 470-1428 for U.S. participants and +1 (929) 526-1599 for international participants and referencing participant code 269354. A simultaneous webcast can be accessed by visiting the “Events & Presentations” section of agilon’s Investor Relations website at https://investors.agilonhealth.com. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call.
About agilon health
agilon health is the trusted partner empowering physicians to transform health care in our communities. Through our partnerships and purpose-built platform, agilon is accelerating at scale how physician groups transition to a value-based Total Care Model for senior patients. agilon provides the technology, people, capital, process, and access to a peer network of 2,700+ PCPs that allow physician groups to maintain their independence and focus on the total health of their most vulnerable patients. Together, agilon and its physician partners are creating the healthcare system we need – one built on the value of care, not the volume of fees. The result: healthier communities and empowered doctors. agilon is the trusted partner in 30+ diverse communities and is here to help more of our nation's leading physician groups and health systems have a sustained, thriving future. For more information visit www.agilonhealth.com and connect with us on Twitter, Instagram, LinkedIn and YouTube.


Forward-Looking Statements
Statements in this release that are not historical factual statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among other things, statements regarding our and our officers’ intent, belief or expectation as identified by the use of words such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or the negative versions of these words or other comparable terms. Examples of forward-looking statements include, among other things: statements regarding timing, outcomes and other details relating to current, pending or contemplated new markets, growth opportunities, ability to deliver sustainable long-term value, business environment, long-term opportunities and strategic growth plans, expected revenue, net income and gross profit, total and average membership, Adjusted EBITDA, Medical Margin, geography entry costs and other financial projections and assumptions and the realization of expected benefits of the sale of our Hawaii operations. Forward-looking statements reflect our current expectations and views about future events and are subject to risks and uncertainties that could significantly affect our future financial condition and results of operations. While forward-looking statements reflect our good faith belief and assumptions we believe to be reasonable based upon current information, we can give no assurance that our expectations or forecasts will be attained. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be outside our control. These risks and uncertainties that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, but are not limited to, those factors discussed in our filings with the Securities and Exchange Commission (the “SEC”), including the factors discussed under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which can be found at the SEC’s website at www.sec.gov. Except as required by law, we do not undertake, and hereby disclaim, any obligation to update any forward-looking statements, which speak only as of the date on which they are made.


agilon health, inc.
Consolidated Balance Sheets
In thousands, except per share data
September 30,
2023		December 31,
2022
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents$168,339 $497,070 
Restricted cash and equivalents10,204 10,610 
Marketable securities395,878 411,901 
Receivables, net1,345,711 497,574 
Prepaid expenses and other current assets36,512 34,119 
Total current assets1,956,644 1,451,274 
Property and equipment, net26,203 20,050 
Intangible assets, net92,657 67,680 
Goodwill62,387 41,540 
Other assets, net140,184 116,924 
Total assets$2,278,075 $1,697,468 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Medical claims and related payables$1,005,762 $346,727 
Accounts payable and accrued expenses290,563 183,364 
Current portion of long-term debt5,000 5,000 
Total current liabilities1,301,325 535,091 
Long-term debt, net of current portion34,780 38,482 
Other liabilities70,370 83,286 
Total liabilities1,406,475 656,859 
Commitments and contingencies
Stockholders' equity (deficit):
Common stock, $0.01 par value: 2,000,000 shares authorized; 405,980 and 412,385 shares issued and outstanding, respectively4,060 4,124 
Additional paid-in capital1,970,930 2,106,886 
Accumulated deficit(1,096,393)(1,064,230)
Accumulated other comprehensive income (loss)(6,230)(5,560)
Total agilon health, inc. stockholders' equity (deficit)872,367 1,041,220 
Noncontrolling interests(767)(611)
Total stockholders’ equity (deficit)871,600 1,040,609 
Total liabilities and stockholders’ equity (deficit)$2,278,075 $1,697,468 


agilon health, inc.
Consolidated Statements of Operations
In thousands, except per share data
(unaudited)
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Revenues:
Medical services revenue$1,212,132 $693,934 $3,494,006 $2,015,541 
Other operating revenue3,528 924 6,853 2,896 
Total revenues1,215,660 694,858 3,500,859 2,018,437 
Expenses:
Medical services expense1,104,396 618,287 3,085,957 1,771,635 
Other medical expenses80,787 50,659 249,936 144,512 
General and administrative (including noncash stock-based compensation expense of $20,736, $7,907, $53,980 and $18,430, respectively)
74,138 51,980 222,483 143,738 
Depreciation and amortization5,310 3,450 15,014 9,865 
Total expenses1,264,631 724,376 3,573,390 2,069,750 
Income (loss) from operations(48,971)(29,518)(72,531)(51,313)
Other income (expense):
Income (loss) from equity method investments14,659 (4,314)24,507 3,473 
Other income (expense), net5,690 4,888 21,001 6,367 
Gain (loss) on lease terminations— — — (5,458)
Interest expense(1,651)(1,000)(4,772)(2,816)
Income (loss) before income taxes(30,273)(29,944)(31,795)(49,747)
Income tax benefit (expense)(1,210)(559)(524)(1,068)
Income (loss) from continuing operations(31,483)(30,503)(32,319)(50,815)
Discontinued operations:
Income (loss) before income taxes— (224)— 526 
Income tax benefit (expense)— (12)— (26)
Total discontinued operations— (236)— 500 
Net income (loss)(31,483)(30,739)(32,319)(50,315)
Noncontrolling interests’ share in (earnings) loss47 71 156 228 
Net income (loss) attributable to common shares$(31,436)$(30,668)$(32,163)$(50,087)
Net income (loss) per common share, basic and diluted
Continuing operations$(0.08)$(0.07)$(0.08)$(0.12)
Discontinued operations$— $— $— $— 
Weighted average shares outstanding
Basic405,787411,065412,077406,823
Diluted405,787411,065412,077406,823


agilon health, inc.
Consolidated Statements of Cash Flows
In thousands
(unaudited)
Nine Months Ended September 30,
20232022
Cash flows from operating activities:
Net income (loss)$(32,319)$(50,315)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization15,014 9,865 
Stock-based compensation expense53,980 18,430 
Loss (income) from equity method investments(24,507)(3,473)
Other noncash items(1,511)4,261 
Changes in operating assets and liabilities(105,690)(59,617)
Net cash provided by (used in) operating activities(95,033)(80,849)
Cash flows from investing activities:
Purchase of property and equipment, net(11,898)(11,937)
Purchase of intangible assets(3,535)(12,415)
Investment in loans receivable and other(8,778)(4,510)
Investments in marketable securities(107,020)(423,183)
Proceeds from maturities and sales of marketable securities and other133,894 15,127 
Net cash paid in business combination(44,479)— 
Proceeds from sale of business and property, net of cash divested— 500 
Net cash provided by (used in) investing activities(41,816)(436,418)
Cash flows from financing activities:
Proceeds from equity issuances, net11,462 30,676 
Common stock repurchase(200,000)— 
Repayments of long-term debt(3,750)(3,750)
Net cash provided by (used in) financing activities(192,288)26,926 
Net increase (decrease) in cash, cash equivalents and restricted cash and equivalents(329,137)(490,341)
Cash, cash equivalents and restricted cash and equivalents, beginning of period507,680 1,054,820 
Cash, cash equivalents and restricted cash and equivalents, end of period$178,543 $564,479 


agilon health, inc.
Key Operating Metrics
In thousands
(unaudited)
GROSS PROFIT
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Total revenues$1,215,660 $694,858 $3,500,859 $2,018,437 
Medical services expense(1,104,396)(618,287)(3,085,957)(1,771,635)
Other medical expenses(1)
(80,787)(50,659)(249,936)(144,512)
Gross profit$30,477 $25,912 $164,966 $102,290 
______________________________________________________________
(1)Represents physician compensation expense related to surplus sharing and other care management expenses that help to create medical cost efficiency. Includes costs in geographies that are in implementation and are not yet generating revenue and investments to grow existing markets. For the three months ended September 30, 2023 and 2022, costs incurred in implementing geographies were $10.3 million and $7.2 million, respectively. For the nine months ended September 30, 2023 and 2022, costs incurred in implementing geographies were $20.3 million and $10.9 million, respectively.

GENERAL AND ADMINISTRATIVE COSTS, INCLUDING PLATFORM SUPPORT COSTS
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Platform support costs$46,629 $34,764 $141,176 $104,868 
Geography entry costs(1)
8,064 14,034 28,620 24,456 
Severance and related costs— 512 188 2,470 
Stock-based compensation expense20,736 7,907 53,980 18,430 
Other(2)
(1,291)(5,237)(1,481)(6,486)
General and administrative$74,138 $51,980 $222,483 $143,738 
______________________________________________________________
(1)Represents direct geography entry costs, including investments to develop and expand our platform and costs in geographies that are in implementation and are not yet generating revenue and investments to grow existing markets.
(2)Includes interest income, non-cash accruals for unasserted claims and contingent liabilities, and transaction-related costs.
Our platform support costs, which include regionally-based support personnel and other operating costs to support our geographies, are expected to decrease over time as a percentage of revenue as our physician partners add members and our revenue grows. Our operating expenses at the enterprise level include resources and technology to support payor contracting, clinical program development, quality, data management, finance and legal functions.


agilon health, inc.
Non-GAAP Financial Measures
In thousands
(unaudited)
MEDICAL MARGIN
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Gross profit(1)
$30,477 $25,912 $164,966 $102,290 
Other operating revenue(3,528)(924)(6,853)(2,896)
Other medical expenses80,787 50,659 249,936 144,512 
Medical margin$107,736 $75,647 $408,049 $243,906 
______________________________________________________________
(1)Gross profit is defined as total revenues less medical services expense and other medical expenses.
ADJUSTED EBITDA
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Net income (loss)(1)
$(31,483)$(30,739)$(32,319)$(50,315)
(Income) loss from discontinued operations, net of income taxes— 236 — (500)
Interest expense1,651 1,000 4,772 2,816 
Income tax expense (benefit)1,210 559 524 1,068 
Depreciation and amortization5,310 3,450 15,014 9,865 
(Gain) loss on lease terminations— — — 5,458 
Severance and related costs(2)
— 512 188 2,470 
Stock-based compensation expense20,736 7,907 53,980 18,430 
EBITDA adjustments related to equity method investments3,702 1,325 8,426 2,988 
Other(3)
(6,903)(10,089)(22,243)(12,753)
Adjusted EBITDA(3)
$(5,777)$(25,839)$28,342 $(20,473)
______________________________________________________________
(1)Includes direct geography entry costs, including investments to develop and expand our platform and costs in geographies that are in implementation and are not yet generating revenue and investments to grow existing markets. For the three months ended September 30, 2023 and 2022, (i) $10.3 million and $7.2 million, respectively, are included in other medical expenses and (ii) $8.0 million and $14.1 million, respectively, are included in general and administrative expenses. For the nine months ended September 30, 2023 and 2022, (i) $20.3 million and $10.9 million, respectively, are included in other medical expenses and (ii) $28.6 million and $24.5 million, respectively, are included in general and administrative expenses.
(2)For the three and nine months ended September 30, 2022, includes taxes and related costs on stock option exercises for departed executives of $0.6 million and $2.0 million.
(3)Includes interest income, non-cash accruals for unasserted claims and contingent liabilities, and transaction-related costs.









agilon health, inc.
Non-GAAP Financial Measures
In thousands
(unaudited)

Key Financial and Operating Metrics, Excluding MDX Hawaii (Non-GAAP)

On October 31, 2023, we completed the disposition of our MDX Hawaii operations. For comparative purposes, total revenues, gross profit, medical margin, net income, and Adjusted EBITDA are presented to exclude the pre-disposition results of operations from our MDX Hawaii operations. The results of the MDX Hawaii operations presented have been calculated on the same basis as our consolidated results.

Total Revenues

Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Total revenues$1,215,660 $694,858 $3,500,859 $2,018,437 
Less: MDX Hawaii total revenues78,797 80,606 240,569 244,900 
Total revenues, excluding MDX Hawaii (non-GAAP)$1,136,863 $614,252 $3,260,290 $1,773,537 

Gross Profit
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Gross profit$30,477 $25,912 $164,966 $102,290 
Less: MDX Hawaii gross profit(1)
(6,362)(4,015)428 6,821 
Gross profit, excluding MDX Hawaii (non-GAAP)$36,839 $29,927 $164,538 $95,469 
______________________________________________________________
(1)For the three months ended September 30, 2023 and 2022, includes other medical expenses of $3.6 million and $4.2 million, respectively. For the nine months ended September 30, 2023 and 2022, includes other medical expenses of $7.5 million and $9.2 million, respectively.



agilon health, inc.
Non-GAAP Financial Measures
In thousands
(unaudited)

Key Financial and Operating Metrics, Excluding MDX Hawaii (Non-GAAP)


Medical Margin
Three Months Ended
September 30,		Nine Months Ended
September 30,
2023202220232022
Medical margin$107,736 $75,647 $408,049 $243,906 
Less: MDX Hawaii medical margin(2,850)20 7,505 15,627 
Medical margin, excluding MDX Hawaii (non-GAAP)$110,586 $75,627 $400,544 $228,279 


Net income (loss)
Three Months Ended
September 30, 2023		Nine Months Ended
September 30, 2023
Net income (loss)$(31,483)$(32,319)
Less: MDX Hawaii net income (loss)(9,444)(4,205)
Net income (loss), excluding MDX Hawaii (non-GAAP)$(22,039)$(28,114)

Adjusted EBITDA
Three Months Ended
September 30, 2023		Nine Months Ended
September 30, 2023
Adjusted EBITDA$(5,777)$28,342 
Less: MDX Hawaii adjusted EBITDA(1)
(11,330)(13,718)
Adjusted EBITDA, excluding MDX Hawaii (non-GAAP)$5,553 $42,060 
______________________________________________________________
(1)For the three months ended September 30, 2023, MDX Hawaii operations include ($3.3) million of interest income and non-cash accruals for unasserted claims, $1.2 million of depreciation and amortization, and $0.1 million of stock-based compensation. For the nine months ended September 30, 2023, MDX Hawaii operations include ($13.6) million of interest income and non-cash accruals for unasserted claims, $3.7 million of depreciation and amortization, and $0.4 million of stock-based compensation.


agilon health, inc.
Supplemental Financial Information
In thousands
(unaudited)

Three Months Ended
September 30, 2023		Nine Months Ended
September 30, 2023
Medicare Advantage (Consolidated)ACO REACH (Unconsolidated)Medicare Advantage (Consolidated)ACO REACH (Unconsolidated)
Medical services revenue$1,212,132 $296,937 $3,494,006 $858,286 
Other operating revenue3,528 — 6,853 — 
Total revenues1,215,660 296,937 3,500,859 858,286 
Medical services expense(1,104,396)(242,431)(3,085,957)(741,752)
Other medical expenses(80,787)(31,970)(249,936)(71,138)
Gross profit30,477 22,536 164,966 45,396 
Other operating revenue(3,528)— (6,853)— 
Other medical expenses80,787 31,970 249,936 71,138 
Medical margin$107,736 $54,506 $408,049 $116,534 

Certain of our operations are not consolidated for the period presented because we do not have the ability to control certain activities due to another party’s control of the entities’ board of directors. Although revenues of the unconsolidated operations are not recorded as revenues by us, income (loss) from equity method investments is nonetheless a significant portion of our overall earnings. See Note 14 to the Condensed Consolidated Financial Statements in the Quarterly Report on Form 10-Q for the period ending September 30, 2023 for additional discussion on our equity method investments.

In addition to providing results that are determined in accordance with GAAP, we present medical margin and Adjusted EBITDA, which are non-GAAP financial measures. Additionally, we present the Adjusted (non-GAAP) key financial and operating metrics to exclude the impact of the disposition of our MDX Hawaii operations, which closed on October 31, 2023.
We define medical margin as medical services revenue after medical services expense is deducted. Medical services expense represents costs incurred for medical services provided to our members. As our platform matures over time, we expect medical margin to increase in absolute dollars. However, medical margin per member per month (PMPM) may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM. We believe this metric provides insight into the economics of our capitation arrangements as it includes all medical services expense directly associated with our members’ care.
We define Adjusted EBITDA as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) stock-based compensation expense, (vi) severance and related costs, and (vii) certain other items that are not considered by us in the evaluation of ongoing operating performance. We reflect our share of Adjusted EBITDA for equity method investments by applying our actual ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis.
Gross profit is the most directly comparable GAAP measure to medical margin. Net income (loss) is the most directly comparable GAAP measure to Adjusted EBITDA.
We believe medical margin and Adjusted EBITDA, including Adjusted (non-GAAP) key financial and operating metrics, help identify underlying trends in our business and facilitate evaluation of period-to-period operating performance of our operations by eliminating items that are variable in nature and not considered by us in the evaluation of ongoing operating performance, allowing comparison of our recurring core business operating results over multiple periods. We also believe medical margin and Adjusted EBITDA provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics we use for financial and operational decision-making. We believe medical margin and Adjusted EBITDA or similarly titled non-GAAP measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance. Other companies may calculate medical margin and Adjusted EBITDA or similarly titled non-GAAP measures differently from the way we calculate these metrics. As a result, our presentation of medical margin and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, limiting their usefulness as comparative measures.



Contacts
Investor Contact
Matthew Gillmor
VP, Investor Relations
investors@agilonhealth.com
Media Contact
Claire Mulhearn
Chief Communications & Public Affairs Officer
media@agilonhealth.com
Source: agilon health

Supplemental Financial Information (unaudited) 11.2.2023

 
Supplemental Financial Information Dollars In Thousands (unaudited) Key Financial and Operating Metrics, Excluding MDX Hawaii (Non-GAAP) On October 31, 2023, we completed the disposition of our MDX Hawaii operations. To facilitate investors’ review and understanding of agilon health, inc.’s operating results, Medicare Advantage Members, Average Medicare Advantage Members, total revenues, gross profit, medical margin, net income, and Adjusted EBITDA are presented on an adjusted basis to exclude the pre-disposition results of operations from our MDX Hawaii operations. Key financial and operating metrics excluding MDX Hawaii are non-GAAP measures. The results of the MDX Hawaii operations presented below have been calculated on the same basis as our consolidated results. Additionally, consolidated medical margin and adjusted EBITDA are non-GAAP measures. These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. Reconciliations of these measures to the most directly comparable financial measure calculated in accordance with U.S. GAAP are included below or in the respective period's press release. Copies of the press releases for the quarters ended June 30, 2023, March 31, 2023, and December 31, 2022, which are furnished as exhibits to Current Reports on Form 8-K filed with the Securities and Exchange Commission on May 9, 2023, August 3, 2023, and March 1 ,2023, respectively, are incorporated by reference herein. Medicare Advantage Members - 2023 (Membership metrics reflect end of period results) 2023 March 31, June 30, September 30, Medicare Advantage Members 402,200 408,900 420,300 Less: MDX Hawaii Medicare Advantage members 36,500 36,100 36,200 Medicare Advantage Members, excluding MDX Hawaii 365,700 372,800 384,100 Average Medicare Advantage Members - 2023 2023 March 31, June 30, September 30, Average Medicare Advantage Members 399,800 409,700 425,100 Less: MDX Hawaii average Medicare Advantage members 36,400 36,200 36,200 Average Medicare Advantage Members, excluding MDX Hawaii 363,400 373,500 388,900

 
Total Revenues - 2023 Three Months Ended 2023 March 31, June 30, September 30, Total revenues $ 1,136,147 $ 1,149,052 $ 1,215,660 Less: MDX Hawaii total revenues 81,835 79,937 78,797 Total revenues, excluding MDX Hawaii (non-GAAP) $ 1,054,312 $ 1,069,115 $ 1,136,863 Gross Profit - 2023 Three Months Ended 2023 March 31, June 30, September 30, Gross profit $ 77,296 $ 57,193 $ 30,477 Less: MDX Hawaii gross profit(1) 4,173 2,617 (6,362) Gross profit, excluding MDX Hawaii (non-GAAP) $ 73,123 $ 54,576 $ 36,839 ___________________________________________ (1) For the three months ended March 31, 2023, June 30, 2023, and September 30, 2023, includes other medical expenses of $2.4 million, $1.4 million, and $3.6 million, respectively. Medical Margin - 2023 Three Months Ended 2023 March 31, June 30, September 30, Medical margin $ 162,003 $ 138,310 $ 107,736 Less: MDX Hawaii medical margin 6,456 3,899 (2,850) Medical margin, excluding MDX Hawaii (non-GAAP) $ 155,547 $ 134,411 $ 110,586 Net Income (Loss) - 2023 Three Months Ended 2023 March 31, June 30, September 30, Net income (loss) $ 15,959 $ (16,795) $ (31,483) Less: MDX Hawaii net income (loss) 6,008 (769) (9,444) Net income (loss), excluding MDX Hawaii (non-GAAP) $ 9,951 $ (16,026) $ (22,039)

 
Adjusted EBITDA - 2023 Three Months Ended 2023 March 31,(1) June 30,(2) September 30,(3) Adjusted EBITDA $ 23,860 $ 10,259 $ (5,777) Less: MDX Hawaii adjusted EBITDA (178) (2,210) (11,330) Adjusted EBITDA, excluding MDX Hawaii (non-GAAP) $ 24,038 $ 12,469 $ 5,553 ___________________________________________ (1) MDX Hawaii operations include ($7.5) million of interest income and non-cash accruals for unasserted claims, $1.2 million of depreciation and amortization, and $0.1 million of stock-based compensation. (2) MDX Hawaii operations include ($2.8) million of interest income and non-cash accruals for unasserted claims, $1.2 million of depreciation and amortization, and $0.1 million of stock-based compensation. (3) MDX Hawaii operations include ($3.3) million of interest income and non-cash accruals for unasserted claims, $1.2 million of depreciation and amortization, and $0.1 million of stock-based compensation. Medicare Advantage Members - 2022 (Membership metrics reflect end of period results) 2022 March 31, June 30, September 30, December 31, Medicare Advantage Members 250,300 261,300 266,600 269,500 Less: MDX Hawaii Medicare Advantage 38,900 38,800 38,700 38,700 Medicare Advantage Members, excluding MDX Hawaii 211,400 222,500 227,900 230,800 Average Medicare Advantage Members - 2022 2022 March 31, June 30, September 30, December 31, Average Medicare Advantage Members 248,000 265,400 270,100 271,900 Less: MDX Hawaii average Medicare 38,900 38,700 38,700 38,600 Average Medicare Advantage Members, excluding MDX Hawaii 209,100 226,700 231,400 233,300 Total Revenues - 2022 Three Months Ended 2022 March 31, June 30, September 30, December 31, Total revenues $ 653,445 $ 670,134 $ 694,858 $ 689,774 Less: MDX Hawaii total revenues 83,465 80,829 80,606 75,091 Total revenues, excluding MDX Hawaii (non-GAAP) $ 569,980 $ 589,305 $ 614,252 $ 614,683

 
Gross Profit - 2022 Three Months Ended 2022 March 31, June 30, September 30, December 31, Gross profit $ 42,464 $ 33,914 $ 25,912 $ 9,996 Less: MDX Hawaii gross profit(1) 8,490 2,346 (4,015) (5,895) Gross profit, excluding MDX Hawaii (non- GAAP) $ 33,974 $ 31,568 $ 29,927 $ 15,891 ___________________________________________ (1) For the three months ended March 31, 2022, June 30, 2022, September 30, 2022, and December 31, 2022, includes other medical expenses of $1.7 million, $3.3 million, $4.2 million, and $4.0 million, respectively. Medical Margin - 2022 Three Months Ended 2022 March 31, June 30, September 30, December 31, Medical margin $ 86,215 $ 82,044 $ 75,647 $ 60,692 Less: MDX Hawaii medical margin 10,109 5,498 20 (2,058) Medical margin, excluding MDX Hawaii (non-GAAP) $ 76,106 $ 76,546 $ 75,627 $ 62,750 Non-GAAP In addition to providing results that are determined in accordance with GAAP, we present medical margin and Adjusted EBITDA, which are non-GAAP financial measures. Additionally, we present our key financial and operating metrics on a non-GAAP basis to exclude of our MDX Hawaii operations (non-GAAP), the sale of which was completed on October 31, 2023. We define medical margin as medical services revenue after medical services expense is deducted. Medical services expense represents costs incurred for medical services provided to our members. As our platform matures over time, we expect medical margin to increase in absolute dollars. However, medical margin per member per month (PMPM) may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM. We believe this metric provides insight into the economics of our capitation arrangements as it includes all medical services expense directly associated with our members’ care. We define Adjusted EBITDA as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) stock-based compensation expense, (vi) severance and related costs, and (vii) certain other items that are not considered by us in the evaluation of ongoing operating performance. We reflect our share of Adjusted EBITDA for equity method investments by applying our actual ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis. Gross profit is the most directly comparable GAAP measure to medical margin. Net income (loss) is the most directly comparable GAAP measure to Adjusted EBITDA.

 
We believe medical margin and Adjusted EBITDA help identify underlying trends in our business and facilitate evaluation of period-to-period operating performance of our operations by eliminating items that are variable in nature and not considered by us in the evaluation of ongoing operating performance, allowing comparison of our recurring core business operating results over multiple periods. We also believe medical margin and Adjusted EBITDA provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics we use for financial and operational decision-making. We believe medical margin and Adjusted EBITDA or similarly titled non-GAAP measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance. Other companies may calculate medical margin and Adjusted EBITDA or similarly titled non-GAAP measures differently from the way we calculate these metrics. As a result, our presentation of medical margin and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, limiting their usefulness as comparative measures. Disclaimer Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or the results that would have been achieved if the disposition of MDX Hawaii had occurred prior to the periods presented. agilon health’s management advises investors that the information provided in this supplement should be read in conjunction with the following documents as filed by the Company with the Securities and Exchange Commission for further discussion both of the risks the Company faces and its historical performance: • Annual Report on Form 10-K for the year ended December 31, 2022; • Quarterly Reports on Form 10-Q for the periods ended March 31, June 30, and September 30, 2022 and 2023; and • Current Reports on Form 8-K filed or furnished during 2022 and 2023.

 
v3.23.3
Document And Entity Information
Nov. 02, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 02, 2023
Entity Registrant Name agilon health, inc.
Entity File Number 001-40332
Entity Incorporation, State or Country Code DE
Entity Tax Identification Number 37-1915147
Entity Address, Address Line One 6210 E Hwy 290
Entity Address, City or Town Austin
Entity Address, State or Province TX
Entity Address, Postal Zip Code 78723
City Area Code 562
Local Phone Number 256-3800
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $0.01 per share
Trading Symbol AGL
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001831097
Amendment Flag false
v3.23.3
Cover
Nov. 02, 2023
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 02, 2023
Entity Registrant Name agilon health, inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-40332
Entity Tax Identification Number 37-1915147
Entity Address, Address Line One 6210 E Hwy 290
Entity Address, Address Line Two Suite 450
Entity Address, City or Town Austin
Entity Address, State or Province TX
Entity Address, Postal Zip Code 78723
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $0.01 per share
Trading Symbol AGL
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001831097
Amendment Flag false
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