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Astrana Health, Inc. (AMEH)·Q4 2023 Earnings Summary

Executive Summary

  • Solid Q4 revenue growth with mixed profitability: total revenue rose 20% y/y to $353.0M; GAAP diluted EPS was $0.26; Adjusted EBITDA was $29.0M, up 23% y/y but down sequentially vs Q3 as costs and year-end items weighed .
  • Full-year 2023 scaled well: revenue $1.3867B (+21% y/y) and Adjusted EBITDA $146.6M (+5% y/y); GAAP EPS diluted $1.29 (+30% y/y) .
  • 2024 guidance implies continued topline and EBITDA growth: revenue $1.65–$1.85B, Adjusted EBITDA $165–$185M, GAAP EPS diluted $1.28–$1.52; management framed this as sustainable growth with profitability focus .
  • Strategic catalysts: rebranding to Astrana Health (ASTH), BASS Medical Group partnership (SOFR+2.9% secured note), and initial closing of CFC assets; adding MSSP participation broadens value-based reach and should support longer-term membership and risk-mix expansion .

What Went Well and What Went Wrong

What Went Well

  • Strong revenue growth and return to profitability y/y in Q4: revenue +20% y/y to $353.0M; net income attributable swung to $12.4M from a $(3.7)M loss in Q4’22; Adjusted EBITDA +23% y/y to $29.0M .
  • Strategic execution and pipeline: first close of CFC assets (~200k members in LA) and long-term BASS partnership to expand value-based arrangements across payer types; management emphasized expanding membership and moving up the risk spectrum .
  • Full-year scale and platform KPIs: ~900k members in value-based arrangements, 10k+ providers, 32+ markets; 2023 revenue $1.39B and Adjusted EBITDA $146.6M underscore durable scale .

Management quote: “We continue to execute against our strategic roadmap: 1) expanding our membership base…, 2) increasing the level of accountability and risk…, 3) empowering our providers…, and 4) executing strategic acquisitions to further accelerate our growth trajectory…” — Brandon K. Sim, CEO .

What Went Wrong

  • Sequential margin/EBITDA pressure in Q4: despite y/y growth, Q4 Adjusted EBITDA of $29.0M was down vs Q3’s $52.0M; loss from operations in Q4 reflects higher cost of services/G&A and year-end items; adjustments included APC excluded assets costs ($10.9M) and higher stock-based comp .
  • Risk pool and management fee softness in Q4: risk pool settlements ($14.9M) and management fee income ($6.4M) were below Q3 levels, contributing to mix and profitability headwinds .
  • S&P Global consensus estimates unavailable via tool: we cannot quantify beat/miss vs Street in this recap; this reduces precision of estimate-based performance framing (note below) (S&P Global consensus data unavailable via tool).

Financial Results

MetricQ2 2023Q3 2023Q4 2023
Revenue ($M)$348.209 $348.173 $353.036
Net Income Attributable ($M)$13.170 $22.059 $12.356
Diluted EPS ($)$0.28 $0.47 $0.26
Adjusted EBITDA ($M)$35.772 $51.974 $29.014

Q4 2023 revenue breakdown ($M):

  • Capitation, net: $309.184
  • Risk pool settlements and incentives: $14.863
  • Management fee income: $6.390
  • Fee-for-service, net: $18.442
  • Other revenue: $4.157

Adjusted EBITDA reconciliation (Q4 2023, $M):

  • EBITDA: $6.657
    • Stock-based compensation: $8.676
    • APC excluded assets costs: $10.949
    • Other, net: $4.721
  • − Income from equity method investments: $(1.989)
  • = Adjusted EBITDA: $29.014

FY 2023 segment performance:

Segment (FY)Total Revenues ($M)Income from Operations ($M)
Care Partners$1,300.112 $91.721
Care Delivery$119.904 $5.873
Care Enablement$135.824 $19.077
Other/Intersegment/Corporate$(169.179) combined $(7.187) combined
Consolidated Total$1,386.661 $84.613

Selected platform KPIs and scale:

  • ~900k members in value-based care; 10k+ providers; 32+ markets; 20+ payer partners (as of early 2024) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($B)FY 2024N/A$1.65 – $1.85 New issuance
Net Income Attributable ($M)FY 2024N/A$61 – $73 New issuance
Adjusted EBITDA ($M)FY 2024N/A$165 – $185 New issuance
Diluted EPS ($)FY 2024N/A$1.28 – $1.52 New issuance

Note: 2023 guidance was updated in prior quarters; 2024 guidance was first provided with Q4 2023 results .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2023)Current Period (Q4 2023)Trend
M&A/Partnership ExpansionQ2: TIP and IntraCare partnerships announced; new CA primary care group . Q3: CFC asset acquisition plan; Associated Hispanic Physicians and Advantage Health Network partnerships .First closing of CFC assets (200k+ members) and BASS Medical Group long-term partnership with SOFR+2.9% note to expand value-based across payers .Accelerating scale and breadth
Risk Program ParticipationLimited references previously (no MSSP start) .Added MSSP ACO participation effective Jan 1, 2024, alongside ongoing ACO REACH .Expanding programs/risk exposure
Branding/TickerApolloMed branding persisted through Q3 .Rebranded to Astrana Health; began trading as ASTH on Feb 26, 2024 .Brand modernization complete
Guidance & ProfitabilityQ2 reiterated 2023 ranges . Q3 narrowed 2023 ranges .Issued FY24 ranges with revenue and EBITDA growth vs 2023 actuals .Confidence in forward growth
Tax/Restatement & RateQ2 disclosed tax restatement and strategy to reduce effective tax rate going forward ; Q3 maintained restatement disclosure .Q4 tax provision lower vs prior-year quarter ($1.018M vs $11.338M) amid structural/timing effects .Normalizing tax dynamics

Management Commentary

  • Strategic priorities: “expanding our membership base… increasing the level of accountability and risk… empowering our providers… executing strategic acquisitions to further accelerate our growth trajectory” — Brandon K. Sim, CEO .
  • Platform vision: technology-powered, provider-centric model to deliver accessible, high-quality, high-value care at scale (10k+ providers; ~900k value-based members) .

Q&A Highlights

  • Based on disclosures, investor focus likely centered on: CFC closing cadence (first close done; second close expected Q1 2024, subject to approvals) ; BASS partnership structure and capital support (senior secured note at SOFR+2.9%, 2031 maturity) ; breadth of 2024 guidance framework and drivers ; and new MSSP participation alongside ACO REACH beginning Jan 1, 2024 .
  • Clarifications provided in filings/supplement: 2024 Adjusted EBITDA reconciliation and components ; non-GAAP reconciliation mechanics (APC excluded assets costs, stock-based comp, other) .

Note: The full earnings call transcript could not be retrieved via the document reader; themes above are anchored to the company’s press release and earnings supplement .

Estimates Context

  • S&P Global (Capital IQ) consensus estimates for Q4 2023 were unavailable via the estimates tool at this time; as a result, we cannot quantify beats/misses vs S&P Global consensus in this recap. Where estimate comparisons are required for decision-making, we recommend refreshing S&P Global data directly.

Key Takeaways for Investors

  • Topline momentum intact: Q4 revenue rose 20% y/y to $353.0M; full-year revenue grew 21% to $1.3867B, powered predominantly by capitation gains and membership expansion .
  • Mixed sequential profitability in Q4: Adjusted EBITDA of $29.0M dropped sequentially from Q3 as cost mix and year-end items offset growth; watch Q1 run-rate normalization and risk pool seasonality .
  • 2024 framework guides to continued growth: revenue $1.65–$1.85B and Adjusted EBITDA $165–$185M; execution on CFC/BASS and MSSP ramp should be primary drivers .
  • Strategic expansion is broadening risk-mix and geography: CFC integration (Medicaid/full-risk capabilities), BASS multi-specialty footprint in Bay Area, and MSSP entry expand Astrana’s platform relevance across payers .
  • Non-GAAP bridges matter: recurring adjustments (APC excluded assets costs, stock comp, other non-cash items) are material to quarterly EBITDA; monitor these lines closely to assess core margin trajectory .
  • Watch tax and equity method lines: lower Q4 tax provision vs prior-year and variability in equity method/“other, net” affect GAAP earnings; underlying operating trends are better captured in Adjusted EBITDA and capitation growth .
  • Near-term trading lens: stock narrative likely tied to execution against 2024 guide, pace of CFC second close and integration synergies, and visibility on member growth and risk conversion in California and new markets .

Appendix: Additional Detail

Q4 2023 income statement snapshot ($M):

  • Loss from operations: $(3.870)
  • Total other income (expense), net: $4.794
  • Provision for income taxes: $1.018
  • Net income (loss): $(0.094)
  • Net income attributable to Astrana: $12.356 (reflects noncontrolling interest allocation) .

Full-year 2023 highlights:

  • Total revenue $1.3867B (+21% y/y); Adjusted EBITDA $146.6M (+5% y/y); GAAP EPS diluted $1.29 (+30% y/y) .
  • Balance sheet: cash and equivalents plus marketable securities ~$296.3M; stockholders’ equity $616.7M at year-end .

Sources:

  • Q4 2023 8-K press release and exhibits, including earnings supplement .
  • Q3 2023 8-K press release and supplement .
  • Q2 2023 8-K press release and supplement .

Estimate disclaimer: S&P Global consensus data were unavailable via tool at the time of analysis; therefore, we have not presented S&P-based beat/miss figures in this recap.