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. The fundamental resilience and effectiveness of our partnership model demonstrates a durable, long-term growth runway through trusted relationships with community-based physicians. 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 Notice. We believe the Advance 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.
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. First, we enter 2026 with an enhanced financial data pipeline and strengthened actuarial and analytical capabilities, improving financial discipline, clinical visibility, and overall predictability.
Second, through a disciplined approach to better underwriting the risks we take by contracting, agilon intentionally prioritized economic sustainability over membership growth. 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. Quality isn't just a scorecard for us, it's a lever for patient outcomes, member experience, cost, and revenue. 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 physician alignment.
| Metric | Period | Current guidance |
|---|---|---|
| Total revenue | FY2026 | $5.41 billion-$5.58 billion (midpoint ~$5.5 billion) |
| Medical margin | FY2026 | $300 million-$350 million (midpoint $325 million) |
| Adjusted EBITDA | FY2026 | -$15 million to +$15 million (breakeven at midpoint) |
| Year-end members on platform | FY2026 | 525,000-540,000 |
| Medicare Advantage membership | FY2026 | ~430,000 |
| ACO model membership | FY2026 | ~103,000 |
| ACO REACH adjusted EBITDA contribution | FY2026 | $20 million-$25 million |
| Net medical cost trend | FY2026 | ~7% net (7.5% gross, less ~50 bps payer-bid benefit) |
| G&A expense | FY2026 | ~$234 million (slightly below FY2025) |
| Geographic entry expense | FY2026 | ~$15 million |
| Metric | YoY | Note |
|---|---|---|
| Medicare Advantage membership (end 2025) | 511,000 members | Measured approach to growth including previously announced market exits and a smaller 2025 class |
| Total revenue | $1.57 billion in Q4; $5.93 billion full year | Lower-than-expected risk adjustment revenue and previously disclosed market and payer-contract exits |
| Medical margin | -$74 million in Q4; -$57 million full year | Elevated cost-trend assumptions, risk adjustment impact, -$60 million from exited markets and -$53 million from prior-year development |
| Adjusted EBITDA | -$142 million in Q4; -$296 million full year | Elevated cost trend and risk adjustment impact, partially offset by lower geographic entry costs and operating-cost discipline |
| Full-year medical cost trend | ~6.5% (raised from the low-to-mid 5% range) | Higher inpatient utilization, including several multimillion-dollar claims (~$6.5 million over $1 million each) in Q3, plus a prudent Q4 reserve at 7.4% |
| ACO REACH adjusted EBITDA | -$6 million in Q4; $41 million full year | In line with expectations |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Discipline: profitability over membership growth | — | Paused growth, walked away from unprofitable payer contracts, and moved certain members to a no-downside care coordination fee model (~25,000 members); MA membership cut ~50,000 from contract exits | — |
| Clinical pathways for chronic disease | — | Heart failure program in over 90% of the network as the most mature pathway; expanding into dementia, COPD, and palliative care | — |
| Enhanced data pipeline and actuarial capabilities | Limited detailed revenue/claims visibility in prior years | Pipeline now covers 85%+ of members with a 99%+ correlation rate, enabling member-level risk scores and faster intervention | — |
| Burden of Illness program and V28 offset | Offset the V28 implementation (~3%-3.5% per year) over the last two years | AI-assisted high-risk identification expected to deliver a net 40 bps improvement year-over-year, above the final year of V28 | — |
| Quality and Star performance | ~4.2 stars composite in 2024; ~$25 million quality opportunity targeted in 2025 | Improved on 2024, ran ahead of benchmarks, with the opportunity to more than double the quality incentive contribution in 2026 | — |
| 2027 rate environment and CMS models | — | Managing toward a potentially lower 2027 rate from the CMS Advance Notice; views ACO REACH's successor LEAD 10-year model as a positive signal for value-based care | — |