A reconciliation of these non-GAAP financial measures for the most comparable GAAP measures is available in the earnings press release and Form 8-K filed with the SEC today. In 2025, we made meaningful progress across all of our initiatives, which has translated into strong first quarter performance and increased expectations for our full year 2026 outlook. Each of these efforts are designed to improve predictability and alignment with our physician partners, reduce variability, and support durable margin expansion over time. As Jeff will discuss in more detail, this has enabled us to increase our revenue and Adjusted EBITDA expectations, in part due to better progress on the validation of our burden of illness initiatives.
Going forward, we will continue to enhance the data pipeline to support clinically actionable insights, as well as improve network design and care model innovation. We are continuing to increase our focus on high-risk patients, an increasingly important focus for all constituents in the Medicare space. With that said, given it is early in the year, we believe it remains prudent to maintain our net cost trend outlook of approximately 7% for full year 2026. As a reminder, the congestive heart failure, or CHF program, remains the most mature pathway deployed across 90% of our markets.
We are working with partners to deploy enhanced caregiver models, structured early-stage pathways, and virtual diagnostics. We're beginning our 2027 payer contracting process, where we plan to take the same disciplined and partnership-oriented approach with our payers, focused on shared profitability and durable margin expansion. Second, our AI-enabled technology platform and enhanced data capabilities deployed in very close proximity to the physician are allowing us to identify opportunities earlier, act faster, and manage performance with greater precision. We are raising our outlook for financial performance this year due to the early impact of these initiatives and remain confident in the long-term strength of our unique partnership model.
| Metric | Period | Current guidance |
|---|---|---|
| Revenue | FY2026 | ~$5.7 billion (midpoint) |
| Medical margin | FY2026 | ~$375 million (midpoint) |
| Adjusted EBITDA | FY2026 | ~$25 million (midpoint) |
| Net cost trend | FY2026 | ~7% |
| Risk-score increase (net of V28) | FY2026 | 1.5% |
| Revenue | Q2 2026 | $1.45 billion (midpoint) |
| Medical margin | Q2 2026 | $123 million (midpoint) |
| Adjusted EBITDA | Q2 2026 | $20 million (midpoint) |
| ACO REACH Adjusted EBITDA | FY2026 | $25 million-$30 million |
| Year-end cash | FY2026 | at least $125 million |
| Metric | YoY | Note |
|---|---|---|
| Revenue | ~$1.42B vs ~$1.53B (down) | Membership decline, partially offset by more constructive 2026 rates and higher estimated risk scores |
| Adjusted EBITDA | $54M vs $21M (up) | Higher medical margin, OpEx discipline, and favorable ACO REACH performance |
| Medical margin | $149M vs $128M (up) | Higher revenue and lower overall medical expenses in the quarter |
| Medicare Advantage membership | 426,000 vs 491,000 (down) | Measured growth approach, market exits finalized Jan 1 2026, and payer exits from profitability-focused contracting |
| ACO REACH membership | 110,000 vs 114,000 (down) | Not separately explained beyond membership trend |
| ACO REACH Adjusted EBITDA | $27M, ~$5M ahead of expectations | CMS removal of fraudulent urinary catheter and suspect skin substitute costs from 2025 and corresponding benchmark changes |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Enhanced data pipeline and risk-adjustment visibility | Pipeline went live end of Q1 2025; prior full-year risk-score estimate 0.4% | Member-level risk scores on ~85% of members; full-year risk-score increase now estimated at 1.5% net of V28 | — |
| AI in clinical and operational workflows | — | Generative-AI insights integrated into clinical workflows and AI-driven risk stratification/suspecting; limited early OpEx impact, larger impact on revenue and medical cost | — |
| Clinical program scaling | CHF program initiated about a year ago | CHF most mature (90% of markets); scaling COPD/lung health and dementia pathways through 2026 | — |
| Disciplined payer contracting | ~$127 million full-year contracting benefit from 2026 executed contracts | 2026 contracts finalized and flowing through; 2027 contracting underway with focus on percent-of-premium, Part D, and risk corridors | — |
| Part D risk reduction | ~30% of members carried Part D risk in 2025 | Less than 15% Part D exposure in 2026, with aim to reduce further | — |
| 2027 rate notice | — | Starting point in line with CMS's 5.33% effective growth rate; minimal exposure to unlinked chart reviews; confident it can offset the 1.12% normalization factor | — |