A reconciliation of these non-GAAP financial measures to the most comparable GAAP measures is available in the earnings press release and Form 8-K filed with the SEC. For the third quarter, we reported revenue of $1.44 billion, medical margin of -$57 million, and adjusted EBITDA of -$91 million. Allowing us to drive improved medical margin, adjusted EBITDA, and cash flow performance in 2026. While this may result in reduced membership, we're focused on profitable growth and earning the appropriate economics for the value we are delivering.
Approximately 75% of Agilon members are expected to be in 4+ Star plans, an increase from 71% in 2026 payment year. In the quarter, we have also taken steps to optimize our cost structure to align with current market dynamics, including a more balanced near-term growth outlook. Second, I will provide details on our reinstated 2025 guidance and a bridge to our jumping-off point for 2026. And finally, I will discuss the strength of our capital position based on our expectations for 2026 and a more disciplined near-term growth outlook.
As we discussed previously, our decision to take a measured approach to membership growth has resulted in a slight year-over-year decline driven by previously disclosed partner exits in a smaller 2025 class. Total revenue for the third quarter of 2025 was $1.44 billion compared to $1.45 billion in the same period of 2024. Our year-over-year revenue comparison continues to be impacted by lower-than-expected risk adjustment, as well as the impact from market and payer contract exits. The third quarter reflects the impact of lower-than-expected revenue associated with 2025 risk adjustment scores of $73 million, including a nine-month true-up of approximately $50 million for the remaining 28%.
| Metric | Period | Current guidance |
|---|---|---|
| Revenue (FY2025) | FY2025 | $5.81B-$5.83B (midpoint $5.82B) |
| Medical margin (FY2025) | FY2025 | -$5M to $15M (midpoint $5M) |
| Adjusted EBITDA (FY2025) | FY2025 | -$270M to -$245M (midpoint -$258M) |
| MA membership (FY2025) | FY2025 | 503,000-506,000 |
| ACO Model membership (FY2025) | FY2025 | 113,000-115,000 |
| Year-end cash | FY2025 | ~$310M (incl. ~$65M off-balance-sheet ACO cash) |
| Year-end cash | FY2026 | at least $100M |
| 2026 medical margin jumping-off point | FY2026 | ~$135M (includes ~$150M lower-than-expected 2025 risk adjustment) |
| Operating cost / adjusted EBITDA benefit from restructuring | FY2026 | ~$30M |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | $1.44B vs $1.45B (roughly flat, slightly down) | Lower-than-expected risk adjustment and impact from market and payer contract exits |
| Medical margin | -$57M vs -$58M | Continued elevated cost trends plus risk adjustment and exited-market impacts |
| Adjusted EBITDA | -$91M vs -$96M | Lower geography entry costs and continued operating cost discipline, partially offsetting headwinds |
| MA membership | 503,000 vs 525,000 | Measured approach to growth, previously disclosed partner exits and a smaller 2025 class |
| ACO REACH membership | 115,000 vs 132,000 | Measured membership growth approach |
| ACO REACH adjusted EBITDA | $18M, ahead of expectations | Strong program performance including final 2024 reconciliation |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Disciplined payer contracting | 2025 included a 1% benefit from payer bids | Actively negotiating 2026; prepared to exit specific payers/markets that miss profitability threshold, potentially reducing membership but benefiting medical margin; ~50% of contracts were open for renewal | — |
| Enhanced data pipeline / risk adjustment | — | Live since Q1; member-level risk scores on ~80% of members, now includes the outlier new-2024 payer, giving confidence in the 2026 baseline | — |
| Reducing volatility / exposure | — | Further reducing Part D exposure (potentially below 30%), multi-year contract terms and MAC clauses, narrowing supplemental benefit risk | — |
| Clinical pathways / BOI programs | — | Heart failure, palliative care live; expanding COPD and dementia pilots into more markets in 2026; expected to contribute to 2026 results | — |
| 2026 tailwinds | — | 9% CMS benchmark rate increase, PMPM growth potentially above 9%, favorable payer bids pricing for profitability, $30M cost savings | — |
| Capital / equity actions | — | Plans to pursue a reverse stock split, seeking stockholder approval at the 2026 AGM | — |
| CEO search | — | Ongoing with good candidates; no timeline; Office of the Executive Chairman meeting daily to drive performance | — |