Astrana Health : Earnings Release HTML PDF Q1 2025

Published: 2025-05-08 17:08:40 ET ASTH

Published on 05/08/2025 at 17:08

May 8, 2025

ALHAMBRA, Calif., May 8, 2025 /PRNewswire/ -- Astrana Health, Inc. ("Astrana," and together with its subsidiaries and affiliated entities, the "Company") (NASDAQ: ASTH), a leading provider-centric, technology-powered healthcare company enabling providers to deliver accessible, high-quality, and high-value care to all, today announced its consolidated financial results for the first quarter ended March 31, 2025.

"Astrana's strong start to the year reflects the continued momentum behind our mission to build the nation's leading patient-centered healthcare platform. Our differentiated clinical capabilities and technology-enabled delegated model continue to drive strong, profitable growth while delivering better outcomes for both patients and providers. Even in a complex regulatory and economic environment, we continue to prove that value-based care can deliver meaningful impact at scale with long-term sustainability," said Brandon Sim, President and CEO of Astrana Health.

All comparisons are to the three months ended March 31, 2024 unless otherwise stated.

(1) See "Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin" and "Use of Non-GAAP Financial Measures" below for additional information.

Officer, helping Astrana further invest in the talent and culture that drive Astrana forward.

All comparisons are to the three months ended March 31, 2024 unless otherwise stated.

(in thousands)

Total revenues

Care Partners

$ 600,951

Care Delivery

$ 33,388

Care Enablement

$ 39,562

Intersegment Elimination

$ (53,511)

Corporate Costs

$ -

Consolidated Total

$ 620,390

% change vs. prior year quarter

Cost of services

512,668

27,139

25,818

(16,564)

549,061

General and administrative(1)

44,068

9,357

10,209

(36,950)

24,062

50,746

Total expenses

556,736

36,496

36,027

(53,514)

24,062

599,807

Income (loss) from operations

44,215

(3,108)

3,535

(2) $

(24,062)

20,583

% change vs. prior year quarter

1 %

* Percentage change of over 500%

(1) Balance includes general and administrative expenses and depreciation and amortization.

(2) Income from operations for the intersegment elimination represents sublease income between segments. Sublease income is presented within other income that is not presented in the table.

Astrana is providing the following guidance for total revenue and Adjusted EBITDA for the quarter ended June 30, 2025 and reiterating guidance for the year ended December 31, 2025 based on the Company's existing business, current view of existing market conditions, and assumptions. The following guidance for the year ended December 31, 2025 includes approximately $15 million in expected costs associated with continued strategic investments in automation and AI, as well as ongoing and expected integration costs associated with planned acquisitions, but does not include contributions from any acquisitions which have not yet closed.

($ in millions)

Total revenue $ 615 $ 655 $ 2,500 $ 2,700

Adjusted EBITDA $ 45 $ 50 $ 170 $ 190

See "Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA" and "Use of Non-GAAP Financial Measures" below for additional information. There can be no assurance that actual amounts will not be materially higher or lower than these expectations. See "Forward-Looking Statements" below for additional information.

Astrana will host a conference call at 2:30 p.m. PT/5:30 p.m. ET today (Thursday, May 8, 2025), during which management will discuss the results of the first quarter ended March 31, 2025. To participate in the conference call, please use the following dial-in numbers about 5 minutes prior to the scheduled conference call time:

U.S. & Canada (Toll-Free): +1 (877) 858-9810

International (Toll): +1 (201) 689-8517

The conference call can also be accessed via webcast

at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=HE6dr7eJ

An accompanying slide presentation will be available in PDF format on the "IR Calendar" page of the Company's website (https://ir.astranahealth.com/news-events/ir-calendar) after issuance of the earnings release and will be furnished as an exhibit to Astrana's current report on Form 8-K to be filed with the SEC, accessible at https://www.sec.gov.

Those who are unable to attend the live conference call may access the recording at the above webcast link, which will be made available shortly after the conclusion of the call.

The Company consolidates entities in which it has a controlling financial interest. The Company consolidates subsidiaries in which it holds, directly or indirectly, more than 50% of the voting rights, and variable interest entities ("VIEs") in which the Company is the primary beneficiary. Noncontrolling interests represent third party equity ownership interests in the Company's consolidated entities (including certain VIEs). The amount of net income attributable to noncontrolling interests is disclosed in the Company's consolidated statements of income.

Astrana Health is a physician-centric, technology-enabled healthcare company committed to delivering access to high-quality, patient-centered care. Through its proprietary end-to-end technology platform, Astrana empowers providers to deliver more proactive, preventive care

- improving patient outcomes, elevating patient experiences, improving the well-being of providers, and driving greater value.

Today, Astrana supports more than 12,000 providers and over one million Americans in value-based arrangements through its affiliated provider networks, management services organization, and primary, specialty, and ancillary care delivery clinics. Together, Astrana is building what our healthcare system should be - one that delivers better care, better experiences, and better outcomes for all. For more information, visit https://www.astranahealth.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company's guidance for the quarter ending June 30, 2025 and the year ending December 31, 2025, ability to meet operational goals, ability to meet expectations in deployment of care coordination and management capabilities, ability to decrease cost of care while improving quality and

outcomes, ability to deliver sustainable revenue and EBITDA growth as well as long-term value, ability to respond to the changing environment, statements about the Company's liquidity, and successful completion and implementation of strategic growth plans, acquisition strategy, and merger integration efforts. Forward-looking statements reflect current views with respect to future events and financial performance and therefore cannot be guaranteed. Such statements are based on the current expectations and certain assumptions of the Company's management, and some or all of such expectations and assumptions may not materialize or may vary significantly from actual results. Actual results may also vary materially from forward-looking statements due to risks, uncertainties and other factors, known and unknown, including the risk factors described from time to time in the Company's reports to the SEC, including, without limitation the risk factors discussed in the

Company's Annual Report on Form 10-K for the year ended December 31, 2024, and any subsequent quarterly reports on Form 10-Q. Any forward-looking statement made by the Company in this release speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

Investor Relations (626) 943-6491

[email protected]

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

Cash and cash equivalents

$ 258,517

$ 288,455

Investment in marketable securities

2,397

2,378

Receivables, net

241,078

225,733

Receivables, net - related parties

56,846

50,257

Income taxes receivable

15,802

19,316

Other receivables

14,919

29,496

Prepaid expenses and other current assets

23,711

22,861

Total current assets

613,270

638,496

Non-current assets

Property and equipment, net

16,849

14,274

Intangible assets, net

111,916

118,179

Goodwill

416,386

419,253

Income taxes receivable

15,943

Loans receivable, non-current

48,134

51,266

Investments in other entities - equity method

38,005

39,319

Investments in privately held entities

8,896

Restricted cash

647

646

Operating lease right-of-use assets

30,698

32,601

Other assets

30,512

16,021

Total non-current assets

717,986

716,398

Total assets(1)

Liabilities, Mezzanine Deficit, and Stockholders' Equity

$ 1,331,256

$ 1,354,894

Current liabilities

Accounts payable and accrued expenses

$ 105,559

$ 106,142

Fiduciary accounts payable

4,840

8,223

Medical liabilities

204,101

209,039

Dividend payable

638

Finance lease liabilities

471

554

Operating lease liabilities

4,979

5,350

Current portion of long-term debt

12,500

9,375

Other liabilities

28,180

26,287

Total current liabilities

361,268

365,608

Non-current liabilities

Deferred tax liability

4,197

4,555

Finance lease liabilities, net of current portion

543

607

Operating lease liabilities, net of current portion

28,963

30,654

Long-term debt, net of current portion and deferred financing costs

403,894

425,299

Other long-term liabilities

14,685

14,003

Total non-current liabilities

452,282

475,118

Total liabilities(1)

813,550

840,726

Mezzanine deficit

Noncontrolling interest in Allied Physicians of California, a Professional Medical Corporation ("APC")

(232,733)

(202,558)

Preferred stock, $0.001 par value per share; 5,000,000 shares authorized as of March 31, 2025 and December 31, 2024

Series A Preferred stock, zero authorized and issued and zero outstanding as of

March 31, 2025 and zero authorized and issued and zero outstanding as of

December 31, 2024

Series B Preferred stock, zero authorized and issued and zero outstanding as of March 31, 2025 and zero authorized and issued and zero outstanding as of December 31, 2024

Common stock, $0.001 par value per share; 100,000,000 shares authorized,

49,028,624(2) and 47,929,872 shares issued and outstanding, excluding 9,903,953

and 10,603,849 treasury shares, as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

452,439

426,389

Retained earnings

292,880

286,283

Total stockholders' equity

745,368

712,720

Non-controlling interest

5,071

4,006

Total equity

750,439

716,726

Total liabilities, mezzanine deficit, and stockholders' equity

$ 1,331,256

$ 1,354,894

(1) The Company's condensed consolidated balance sheets include the assets and liabilities of its consolidated VIEs. The condensed consolidated balance sheets include total assets that can be used only to settle obligations of the Company's consolidated VIEs totaling $678.1 million and $712.3 million as of March 31, 2025 and December 31, 2024, respectively, and total liabilities of the Company's consolidated VIEs for which creditors do not have recourse to the general credit of the primary beneficiary of $212.1 million and $207.9 million as of March 31, 2025 and December 31, 2024, respectively. These VIE balances do not include $190.2 million of investment in affiliates and $4.5 million of amounts due to affiliates as of March 31, 2025, and $224.9 million of investment in affiliates and $48.1 million of amounts due to affiliates as of December 31, 2024, as these are eliminated upon consolidation and not presented within the condensed consolidated balance sheets.

(2) As of May 5, 2025, there were 56,061,712 shares of common stock of the registrant issued and outstanding, which includes 6,132,802 treasury shares that are owned by Allied Physicians of California, a Professional Medical Corporation d.b.a. Allied Pacific of California IPA ("APC"). The shares owned by APC are legally issued and outstanding but excluded from shares of common stock outstanding in the Company's consolidated financial statements. The shares are treated as treasury shares for accounting purposes and not included in the number of shares of common stock outstanding used to calculate the Company's earnings per share.

Included in the Company's common stock as outstanding in the consolidated financial statements are 41,048 holdback shares that have not been issued to certain former shareholders of the Company's subsidiary, Astrana Health Management, Inc. ("AHM"). The former AHM shareholders, who were AHM shareholders at the time of closing of the merger, have yet to submit properly completed letters of transmittal to Astrana in order to receive their pro rata portion of Astrana's common stock as contemplated under that certain Agreement and Plan of Merger, dated December 21, 2016, among Astrana, AHM, Apollo Acquisition Corp. ("Merger Subsidiary") and Kenneth Sim, M.D., as amended, pursuant to which Merger Subsidiary merged with and into AHM, with AHM as the surviving corporation. Pending such receipt, such former AHM shareholders have the right to receive, without interest, their pro rata share of dividends or distributions with a record date after the effectiveness of the merger. The Company's consolidated financial statements have treated such shares of common stock as outstanding, given the receipt of the letter of transmittal is considered perfunctory and Astrana is legally obligated to issue these shares in connection with the merger.

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) (UNAUDITED)

2025

2024

Revenue

Capitation, net

$ 583,963

$ 365,910

Risk pool settlements and incentives

14,491

17,377

Management fee income

2,310

4,078

Fee-for-service, net

14,890

15,937

Other revenue

4,736

1,054

Total revenue

620,390

404,356

Operating expenses

Cost of services, excluding depreciation and amortization

549,061

330,399

General and administrative expenses

43,897

38,722

Depreciation and amortization

6,849

5,096

Total expenses

599,807

374,217

Income from operations

20,583

30,139

(Loss) income from equity method investments

(867)

632

Interest expense

(7,308)

(7,585)

Interest income

2,312

3,996

Unrealized (loss) gain on investments

(44)

1,099

Other loss

(5,072)

(4,277)

Total other expense, net

(10,979)

(6,135)

Income before provision for income taxes

9,604

24,004

Provision for income taxes

3,383

7,142

Net income

6,221

16,862

Net (loss) income attributable to non-controlling interest

(471)

2,027

Net income attributable to Astrana Health, Inc.

$ 6,692

$ 14,835

Earnings per share - basic

$ 0.14

$ 0.31

Earnings per share - diluted

$ 0.14

$ 0.31

(IN THOUSANDS) (UNAUDITED)

2025

2024

Cash flows from operating activities

Net income

$ 6,221

$ 16,862

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

6,849

5,096

Amortization of debt issuance cost

691

458

Share-based compensation

7,811

5,748

Non-cash lease expense

1,287

3,155

Change in fair value of contingent consideration liabilities

1,407

Loss on debt extinguishment

375

Unrealized loss (gain) on investments

(1,099)

Loss (income) from equity method investments

867

(632)

Deferred tax

(358)

(7,248)

Other

(557)

6,795

Changes in operating assets and liabilities, net of business combinations:

Receivables, net

(10,368)

(26,128)

Receivables, net - related parties

(6,589)

(3,374)

Other receivables

3,688

(1,403)

Prepaid expenses and other current assets

2,674

(4,255)

Other assets

(314)

Accounts payable and accrued expenses

905

Fiduciary accounts payable

(3,383)

Medical liabilities

3,319

(808)

Income taxes receivable

3,514

14,542

Operating lease liabilities

(1,090)

(3,083)

Other long-term liabilities

531

298

Net cash provided by operating activities

16,627

5,977

Cash flows from investing activities

Payments for business acquisition, net of cash acquired

(50,649)

Proceeds from repayment of promissory notes, including those with related parties

600

Purchase of marketable securities

(24)

(27)

Issuance of loan receivable

(20,000)

Purchases of property and equipment

(3,070)

(369)

Distribution from investment - equity method

100

Net cash used in investing activities

(2,394)

(71,039)

Cash flows from financing activities

Dividends paid

(5,455)

(95)

Borrowings on long-term debt

412,000

110,000

Repayment of long-term debt

(428,232)

(3,500)

Payment of finance lease obligations

(147)

(179)

Deferred financing cost

(17,241)

Proceeds from ESPP purchases

301

Taxes paid from net share settlement of restricted stock

(4,052)

Repurchase of treasury shares

(1,316)

Proceeds from sale of non-controlling interest

150

Purchase of non-controlling interest

(28)

(25)

Net cash (used in) provided by financing activities

(44,170)

106,351

Net (decrease) increase in cash, cash equivalents, and restricted cash

(29,937)

41,289

Cash, cash equivalents, and restricted cash, beginning of period

289,101

294,152

Cash, cash equivalents, and restricted cash, end of period

$ 259,164

$ 335,441

Supplemental disclosures of cash flow information

Cash paid for income taxes

$ 4,338

$ 194

Cash paid for interest

$ 7,360

$ 6,430

Supplemental disclosures of non-cash investing and financing activities

Business acquisition in accounts payable and accrued liabilities

63,935

Right-of-use assets obtained in exchange for operating lease liabilities

5,729

4,910

Common stock issued in business combination

21,952

Purchase of investments - equity method in accounts payable and accrued liabilities and other liabilities

9,487

Draw on letter of credit through Revolver Loan

4,759

Dividend paid in the form of common stock

21,935

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total amounts of cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows (in thousands):

2025

2024

Cash and cash equivalents

$ 258,517

$ 334,796

Restricted cash

647

645

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows

$ 259,164

$ 335,441

Set forth below are reconciliations of Net Income to EBITDA and Adjusted EBITDA as well as the reconciliation to Adjusted EBITDA margin for the three months ended March 31, 2025 and 2024. The Company defines Adjusted EBITDA margin as Adjusted EBITDA over total

revenue.

(in thousands)

2025

2024

Net income

$ 6,221

$ 16,862

Interest expense

7,308

7,585

Interest income

(2,312)

(3,996)

Provision for income taxes

3,383

7,142

Depreciation and amortization

6,849

5,096

EBITDA

21,449

32,689

(Income) loss from equity method investments

867

(632)

Other, net

6,259

(1)

4,440

(2)

Stock-based compensation

7,811

5,748

Adjusted EBITDA

$ 36,386

$ 42,245

Total revenue

$ 620,390

$ 404,356

Adjusted EBITDA margin

(1) Other, net for the three months ended March 31, 2025, relates to debt issuance costs expensed in connection with our Second Amended and Restated Credit Facility, transaction costs for our acquisition of Prospect, data transition costs for our recent acquisitions, certain costs associated with the CHS transaction, non-cash changes related to change in the fair value of our call option and Collar Agreement, and severance fees incurred.

(2) Other, net for the three months ended March 31, 2024, relates to financial guarantee via a letter of credit that we provided almost three years ago in support of two local provider-led ACOs, non-cash changes related to change in the fair value of our financing obligation to purchase the remaining equity interests in one of our investments, non-cash changes related to change in the fair value of the Company's Collar Agreement, and transaction costs incurred for our investments and tax restructuring fees.

(in thousands)

Low

High

Net income

$ 62,500

$ 73,500

Interest expense

16,000

19,000

Provision for income taxes

34,000

40,000

Depreciation and amortization

32,500

EBITDA

145,000

165,000

Income from equity method investments

(5,500)

Other, net

9,500

Stock-based compensation

21,000

Adjusted EBITDA

$ 170,000

$ 190,000

The Company has not provided a quantitative reconciliation of EBITDA and Adjusted EBITDA for the quarter ending June 30, 2025 to the most comparable GAAP measure on a forward-looking basis within this press release because the Company is unable, without unreasonable efforts, to provide reconciling information with respect to certain line items that cannot be calculated for the three month period. These items, which could materially affect the computation of forward-looking GAAP net income, are inherently uncertain and depend on various factors, some of which are outside of the Company's control.

This press release contains the non-GAAP financial measures EBITDA and Adjusted EBITDA, of which the most directly comparable financial measure presented in accordance with U.S. generally accepted accounting principles ("GAAP") is net income. These measures are not in accordance with, or alternatives to GAAP, and may be calculated differently from similar non-GAAP financial measures used by other companies. The Company uses Adjusted EBITDA as a supplemental performance measure of our operations, for financial and operational decision-making, and as a supplemental means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization, excluding income or loss from equity method investments, non-recurring and non-cash transactions, and stock-based compensation. The Company defines Adjusted EBITDA margin as Adjusted EBITDA over total revenue.

The Company believes the presentation of these non-GAAP financial measures provides investors with relevant and useful information, as it allows investors to evaluate the operating performance of the business activities without having to account for differences recognized because of non-core or non-recurring financial information. When GAAP financial measures are viewed in conjunction with non-GAAP financial measures, investors are provided with a more meaningful understanding of the Company's ongoing operating performance. In addition, these non-GAAP financial measures are among those indicators the Company uses as a basis for evaluating operational performance, allocating resources, and planning and forecasting future periods. Non-GAAP financial measures are not intended to be considered in isolation, or as a substitute for, GAAP financial measures. Other companies may calculate both EBITDA and Adjusted EBITDA differently, limiting the usefulness of these measures for comparative purposes. To the extent this release contains historical or future non-GAAP financial measures, the Company has provided corresponding GAAP financial measures for comparative purposes. The reconciliation between certain GAAP and non-GAAP measures is provided above.

View original content to download multimedia:https://www.prnewswire.com/news-releases/astrana-health-inc-reports-first-quarter-2025-results-302450483.html

SOURCE Astrana Health, Inc.

Disclaimer

Astrana Health Inc. published this content on May 08, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 08, 2025 at 21:02 UTC.