Executive Summary

Revenue of $654.8M and Adjusted EBITDA of $48.1M came in at the high end of guidance; revenue beat S&P consensus by ~$16.5M while diluted EPS of $0.19 missed consensus by ~$0.16, driven by integration/transaction costs and Medicaid trend mix; full-year guidance was raised post-Prospect close .
Management reaffirmed disciplined medical cost control; blended trend was slightly below the 4.5% FY outlook, with MA/commercial below and Medicaid above, improving sequentially; approximately 78% of revenue now comes from full-risk contracts (up from 75% in Q1) .
Prospect Health closed July 1 with price reduced to ~$707.9M; pro forma net leverage improved to ~2.7x vs prior ~3.4x; FY25 guidance raised to $3.1–$3.3B revenue and $215–$225M Adjusted EBITDA; Q3 guide is $925–$965M revenue and $65–$70M Adjusted EBITDA .
Near-term stock catalysts: execution on Prospect integration/synergies ($12–$15M over 12–18 months), stable RAF (~1.02), and consistent trend discipline; medium-term EBITDA expansion expected as full-risk cohorts mature and synergies ramp .

What Went Well and What Went Wrong

What Went Well
- Revenue and Adjusted EBITDA landed at the high end of guidance; “strong second quarter results underscore the power of our physician-focused, technology-enabled model to drive profitable growth” .
- Medical cost trend disciplined: blended trend slightly below the 4.5% full-year expectation; MA/commercial below 4.5%, Medicaid above but improved sequentially from Q1 .
- Prospect closed on improved terms; leverage reduced and FY25 guidance raised: “close…at an approximately 2.7x net debt to pro forma Adjusted EBITDA…updating full-year 2025 guidance to $3.1–$3.3B revenue and $215–$225M Adjusted EBITDA” .
What Went Wrong
- Diluted EPS missed S&P consensus (actual $0.19 vs $0.348 estimate), reflecting higher “Other, net” add-backs (transaction/integration costs) and Medicaid trend/locked-rate headwinds .
- Adjusted EBITDA margin compressed YoY (7% vs 10% in Q2’24) amid integration costs and elevated Medicaid utilization; management noted these are manageable and expected to improve with synergies and cohort maturation .
- Ongoing Medicaid policy uncertainty (e.g., “One Big Beautiful Bill” and CA policy changes) introduces potential enrollment and acuity mix headwinds; management sized a conservative scenario (~$200–$250M revenue; ~$10–$15M EBITDA headwind) and emphasized active payer/state engagement .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$486.265	$620.390	$654.808
Diluted EPS ($)	$0.40	$0.14	$0.19
Adjusted EBITDA ($USD Millions)	$47.917	$36.386	$48.101
Adjusted EBITDA Margin (%)	10%	6%	7%

Segment revenue and operating income trend:

Segment (Revenue $000s)	Q1 2025	Q2 2025
Care Partners Revenue	$600,951	$631,442
Care Delivery Revenue	$33,388	$38,394
Care Enablement Revenue	$39,562	$40,901
Intersegment Elimination	$(53,511)	$(55,929)
Consolidated Total Revenue	$620,390	$654,808
Care Partners Income from Operations	$44,215	$49,685
Care Delivery Income (Loss) from Operations	$(3,108)	$2,147
Care Enablement Income from Operations	$3,535	$1,841
Consolidated Income from Operations	$20,583	$20,340

KPIs and balance sheet:

KPI	Q1 2025	Q2 2025
Full-Risk Share of Revenue (%)	75% (capitation)	~78% (total revenue)
RAF (Medicare Advantage)	—	~1.02; stable YoY
Cash and Cash Equivalents ($USD Millions)	$258.517	$339.703
Pro Forma Net Leverage (x)	—	~2.7x post-Prospect close

Non-GAAP adjustments detail (Q2 2025): Adjusted EBITDA adds back stock-based compensation ($11.709M), “Other, net” ($7.998M) mainly transaction/integration-related, and equity method items, reflecting integration and financing activities tied to Prospect/CHS and platform investments .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($USD Billions)	FY 2025	$2.5–$2.7	$3.1–$3.3	Raised
Adjusted EBITDA ($USD Millions)	FY 2025	$170–$190	$215–$225	Raised
Total Revenue ($USD Millions)	Q3 2025	—	$925–$965	New
Adjusted EBITDA ($USD Millions)	Q3 2025	—	$65–$70	New

Management reiterated Q2 guidance at the time of Prospect close and delivered at the high end (revenue/Adj. EBITDA) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
AI/Technology Enablement	~$10M efficiencies expected by early 2026; ongoing automation/AI investments	Integration accelerating; proprietary data platform/AI cited as synergy lever; new Chief Data & Analytics Officer	Scaling execution/upside potential
Full-Risk Progression	73% of capitation revenue full risk (FY’24)	~78% of revenue in full-risk; continued cohort maturation	Increasing alignment
Medical Cost Trend	FY’24 5.3% blended; MA low-single, commercial mid-single, Medicaid high-single	Trend “slightly below” 4.5% expectation; Medicaid above but sequentially improved	Stable/improving
Medicaid Policy/Rate vs Trend	Prop 35 and rate mismatch; conservative guidance	“One Big Beautiful Bill” headwinds sized; ~28% revenue exposure pro forma; scenario analysis shared	Manageable risk; active negotiations
Exchange Marketplace	Limited exposure; disciplined risk	<5% of members; CA market less fraud-prone; potential year-end utilization rush manageable	Monitored/contained
Regional Expansion	Nevada/Texas ramp to breakeven/profitability	Nevada profitable at four-wall EBITDA; Texas tracking to run-rate breakeven this year	Improving
Risk Adjustment/RAF/V28	No negative impact; de minimis Part D risk	RAF ~1.02 stable; <2% Part D exposure	Stable

Management Commentary

“Strong second quarter results underscore the power of our physician-focused, technology-enabled model to drive profitable growth and deliver better outcomes at scale.” – Brandon Sim, CEO .
“Approximately 78% of revenue now comes from full risk contracts… Adjusted EBITDA performance reflects the balanced approach… responsibly growing risk-bearing membership, while managing cost trends effectively.” – CEO .
“Closed the Prospect Health acquisition… reduced purchase price to ~$707.9M… closing at ~2.7x net debt to pro forma Adjusted EBITDA… reiterating full-year guidance.” – CEO .
“For Q3, revenue $925–$965M and Adjusted EBITDA $65–$70M; FY25 $3.1–$3.3B revenue and $215–$225M Adjusted EBITDA.” – CFO .
“Free cash flow conversion expected to be 40–45% of Adjusted EBITDA (~$90–$100M for FY25).” – CFO .

Q&A Highlights

Prospect integration/synergies: Management reiterates $12–$15M synergy target over 12–18 months with potential upside; emphasizes data/AI platform and clinical process standardization as levers .
Medicaid headwinds and rate vs trend: Conservative assumptions; scenario analysis shows ~$200–$250M revenue and ~$10–$15M EBITDA headwind under severe enrollment declines; active payer/state negotiations on acuity rate mismatch .
RAF stability and delegation: RAF ~1.02, not including Prospect (similar benchmark); continued progress toward fully delegated contracts in Texas/Nevada .
Cash flow timing: Elevated Q2 cash flow (ACO REACH payments and taxes) expected to revert in Q4; FY free cash flow guidance reaffirmed .
Exchange dynamics: CA’s state-based exchange less fraud-prone; small membership exposure; potential subsidy changes manageable .

Estimates Context

Revenue beat consensus in Q2 ($654.8M actual vs $638.3M consensus*); Q1 was modestly below consensus ($620.4M vs $630.7M*). Diluted EPS missed consensus in both Q2 ($0.19 actual vs $0.348* consensus) and Q1 ($0.14 vs $0.2072*), reflecting integration/“Other, net” costs and Medicaid rate vs trend dynamics .
Q3 revenue consensus* ($952.8M) sits within guidance ($925–$965M), implying balanced expectations into integration ramp .

Metric	Q1 2025	Q2 2025
Revenue Consensus Mean ($USD)	630,679,260*	638,299,870*
Actual Revenue ($USD)	620,390,000	654,808,000
Primary EPS Consensus Mean ($)	0.2072*	0.348*
Diluted EPS Actual ($)	0.14	0.19

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Revenue strength and disciplined medical trend underpin the model; the quarter delivered high-end guidance and a revenue beat vs consensus, while EPS underperformed due to integration and policy headwinds .
Guidance lift post-Prospect (FY25 to $3.1–$3.3B revenue; $215–$225M Adjusted EBITDA) and Q3 outlook ($925–$965M revenue; $65–$70M Adjusted EBITDA) provide near-term visibility; watch leverage reduction to <2.5x and synergy execution as catalysts .
Medicaid remains the key swing factor; management sized conservative headwinds and is actively renegotiating rates/acuity; expect continued disclosure on California policy impacts and payer dialogues .
RAF/V28 stability and minimal Part D exposure differentiate ASTH in a volatile environment, supporting margin defense as cohorts mature .
Trading implication: Near term, stock likely responds to integration updates and Q3 execution; medium term, EBITDA expansion in 2026–2027 as full-risk cohorts and synergies ramp supports multiple re-rating if trend discipline persists .
Monitor segment-level operating leverage (Care Partners) and improving performance in Nevada/Texas for incremental profit inflection .
Non-GAAP adjustments tied to transaction/integration are meaningful now but should fade as Prospect integration completes; Adjusted EBITDA margin trajectory is key to watch .

Citations:
Press release and 8-K (Q2 2025): .
Earnings call transcript (Q2 2025): .
Prospect closing 8-K and press release (Q2 2025): .
Prior quarter documents (Q1 2025 8-K and call): ; .
Q4 2024 call for trend context: .

Astrana Health, Inc. (ASTH)·Q2 2025 Earnings Summary