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 today. Against that backdrop, I am pleased to report that agilon exceeded our second quarter guidance across our key financial metrics. With that, I'll turn the call over to Jeff to discuss our financial results and update outlook in greater detail. As Tim mentioned, we're pleased by our second quarter results, which exceeded the high end of our guidance for medical margin and adjusted EBITDA.
As a reminder, the year-over-year decline reflects our disciplined, profitability-focused approach to contracting in 2026 and measured approach to growth. We continue to view these as a long-term risk-adjusted growth opportunity to potentially recontract these members to full risk when appropriate. Revenue for the second quarter was approximately $1.5 billion, compared to $1.4 billion in the second quarter of 2025. Our performance in the second quarter was driven by higher than expected revenue associated with the risk adjustment, which is now estimated at approximately 3% year-over-year net of the V28 impact.
This is above our prior estimate of approximately 1.5% increase at the end of the first quarter. We continue to see the benefit of the enhanced data pipeline, which provided additional visibility from intra-quarter mid-year risk adjustment data from payers, which is validated with mid-year MAO-004 and MMR data. The full year 2025 cost trend is now estimated at 5.8%, down from the 6.2% we estimated when we reported our first quarter results. Medical margin for the second quarter was $197 million, compared to -$53 million in the second quarter of 2025.
| Metric | Period | Current guidance |
|---|---|---|
| Revenue (FY 2026) | FY 2026 | ~$5.8B |
| Medical margin (FY 2026) | FY 2026 | ~$485M |
| Adjusted EBITDA (FY 2026) | FY 2026 | ~$85M |
| ACO REACH adjusted EBITDA (FY 2026) | FY 2026 | $25M-$30M |
| Risk adjustment YoY (net of V28) | FY 2026 | ~3% |
| Cost trend assumption (remainder of year) | H2 2026 | ~7% range |
| Year-end cash | FY 2026 | at least $125M |
| Revenue (Q3) | Q3 2026 | ~$1.46B |
| Medical margin (Q3) | Q3 2026 | ~$110M |
| Adjusted EBITDA (Q3) | Q3 2026 | break even |
| Metric | YoY | Note |
|---|---|---|
| Revenue | ~$1.5B vs ~$1.4B in Q2 2025 | More constructive 2026 CMS benchmark rates, favorable payer contracting, and higher revenue from improved diagnosis of members' conditions, more than offsetting the membership decline |
| Medical margin | $197M vs -$53M in Q2 2025 | Favorable prior-year development of $22M, $38M year-to-date impact from revised risk-score estimates, and $14M of favorable Q1 cost-trend development |
| Adjusted EBITDA | $70M vs -$83M in Q2 2025 | Favorable prior-year development of $22M, $20M year-to-date impact from the increased risk-adjustment estimate, and $7M of favorable Q1 cost-trend development |
| Medicare Advantage membership | 437,000 vs 498,000 in Q2 2025 | Disciplined, profitability-focused contracting and measured approach to growth in 2026 |
| ACO REACH membership | 112,000 vs 116,000 in Q2 2025 | Measured membership positioning; ACO REACH contributed $7M of adjusted EBITDA in the quarter, in line with guidance |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Enhanced data pipeline | — | Now covers above 80% of payers, starting with the largest; provides intra-quarter mid-year risk-adjustment data validated with MAO-004 and MMR data, improving visibility and forecasting | — |
| Clinical / quality pathways | COPD and dementia targeted for 50%-70% of markets by end of Q2 | CHF deployed across 90% of markets (most mature pathway); dementia pathway expected in a number of markets by year-end and COPD expanding; also advancing lung health and pharmacy-integrated heart-failure medication | — |
| AI investment | — | Viewed as a force multiplier for primary care, not a replacement; used to drive operational/clinical insights, reduce administrative burden, and surface evidence-based interventions | — |
| Growth strategy | — | Measured and disciplined; near-term growth from existing markets, converting care-coordination-fee members to full risk, re-engaging prior partners, and ACO opportunities; new markets carry a 12-18 month implementation, so new-market growth is being evaluated toward 2028 | — |
| 2027 ACO model expansion | — | Medicare Shared Savings Program and future ACO LEAD model seen as important 2027 opportunities and expected to be positive contributors, building on strong ACO REACH performance | — |
| Part D exposure reduction | — | Less than 15% of the book has Part D exposure, with intent to further reduce it; Part D recorded net in revenue so it does not drive seasonality as it does for payers | — |