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What changed in agilon health, inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of agilon health, inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+393 added−372 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-25)

Top changes in agilon health, inc.'s 2025 10-K

393 paragraphs added · 372 removed · 309 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

76 edited+21 added−9 removed159 unchanged
Biggest changeIn ACO REACH, the annual participation agreements between our ACOs and CMS expire two years after the “Model Performance Period” established by CMS, which lasts from April 1, 2021 through December 31, 2026. The ACO may terminate its participation agreement with CMS at any time upon advance written notice.
Biggest changeOur MSSP ACOs selected the Enhanced Track, in which the ACO assumes partial accountability for the total cost of care of the aligned FFS beneficiaries (risk sharing is set at 75%). 6 Table of Contents In ACO REACH, the annual participation agreements between our ACOs and CMS expire two years after the “Model Performance Period” established by CMS, which lasts from April 1, 2021 through December 31, 2026.
In ACO REACH, each of the ACOs selected the Global risk-sharing option, in which the ACO assumes accountability for the total cost of care of the FFS beneficiaries aligned to such ACO. In addition, each of our REACH ACOs selected the Primary Care Capitation Payment (the “PCC”) option.
In ACO REACH, each of our ACOs selected the Global risk-sharing option, in which the ACO assumes accountability for the total cost of care of the FFS beneficiaries aligned to such ACO. In addition, each of our REACH ACOs selected the Primary Care Capitation Payment (the “PCC”) option.
Our growth strategy is supported by a dedicated business development team that works closely with physician groups, senior management and key stakeholders to identify potential physician groups to partner with and integrate onto our platform and into our network.
Our growth strategy is supported by a dedicated business development team that works closely with physician groups, senior management and key stakeholders to identify potential physician groups to partner with and integrate onto our platform and into our physician network.
Our platform is delivered to our anchor physician groups through a long-term partnership model to support the adoption and success of a Medicare-centric, globally capitated line of business. agilon’s Long-term Physician Partner Model : We built the agilon platform to be deployed through an aligned long-term partnership model with community-based physician groups to move healthcare closer to the physician, be outcome-centric and optimize the long-term sticky relationship between a patient and their existing physician.
Our platform is delivered to our anchor physician groups through a long-term partnership model to support the adoption and success of a Medicare-centric, globally capitated line of business. agilon’s Long-term Physician Partner Model : We built the agilon platform to be deployed through an aligned long-term partnership model with community-based physician groups to move healthcare closer to the physician, be outcome-centric and optimize the long-term relationship between a patient and their existing physician.
They are frequently brought by individuals known as “relators” or “whistleblowers,” who may file a FCA lawsuit on behalf of the government. Relators and whistleblowers are incentivized to file such lawsuits because they may share in a percentage of any recovery. Healthcare-related fraud continues to be the leading source of recoveries in FCA settlements and judgments.
They are frequently brought by individuals known as “relators” or “whistleblowers,” who may file an FCA lawsuit on behalf of the government. Relators and whistleblowers are incentivized to file such lawsuits because they may share in a percentage of any recovery. Healthcare-related fraud continues to be the leading source of recoveries in FCA settlements and judgments.
Notably, compensation pursuant to a risk-sharing arrangement between a managed care organization or an independent practice association and a physician (either directly or indirectly through a contractor) for services provided to enrollees of a health plan (an MA plan, for example) does not constitute a financial arrangement for Stark purposes.
Notably, compensation pursuant to a risk-sharing arrangement between a managed care organization or an independent practice association and a physician (either directly or indirectly through a contractor) for services provided to enrollees of a health plan (an MA plan, for example) does not constitute a financial arrangement for Stark Law purposes.
In turn, in accordance with the PCC option, CMS compensates each physician partner for a portion of their billed services based on the applicable rate, and the remaining portion is paid to each ACO on a per Medicare beneficiary per month (“PBPM”) basis based on a prospective estimate of such remaining portion of billed services.
In turn, in accordance with the PCC option, CMS compensates each physician partner for a portion of their billed services based on the applicable rate, and the remaining portion is paid to each ACO on a per Medicare beneficiary per month (“PBPM”) basis based as a prospective estimate of such remaining portion of billed services.
A single data privacy or data security incident can, in the view of HHS, result in violations of multiple standards. HIPAA, as amended by the HITECH Act, also authorizes state attorneys general to file suit on behalf of their states’ residents.
A single data privacy or data security incident can, in the view of HHS, result in violations of multiple standards. HIPAA, as amended by the HITECH, also authorizes state attorneys general to file suit on behalf of their states’ residents.
Most of our contracts with our anchor physician groups contain exclusivity or other provisions intended to promote interconnectedness with our physician partners in order to facilitate the longevity and stability of the partnership.
Most of our contracts with our anchor physician groups contain exclusivity or other provisions intended to promote interconnectedness with our physician partners in order to facilitate longevity, continuity, and stability of the partnership.
This typically takes the form of letters of credit, surety bonds, or restricted deposits, or the payor may retain a percentage of the capitation payments due under the applicable contract. Risk-bearing capital required by payors varies by payor and geography, but typically averages between 1.0-3.0% of projected annual gross revenue attributable to the corresponding agreement.
This typically takes the form of letters of credit, surety bonds, or restricted deposits, or the payor may retain a percentage of the capitation payments due under the applicable contract. Risk-bearing capital required by payors varies by payor and geography, but is typically between 1.0-3.0% of projected annual gross revenue attributable to the corresponding agreement.
Our contracts with payors generally have terms of one to three years and are typically renewed for one-year periods unless terminated in accordance with the terms of such agreements. When we enter into a new payor contract, we are typically required by the payor to contribute risk-bearing capital to the local operating subsidiary.
Our contracts with payors generally have terms of one to three years and are typically renewed for varying periods unless terminated in accordance with the terms of such agreements. When we enter into a new payor contract, we are typically required by the payor to contribute risk-bearing capital to the local operating subsidiary.
The combination of these subscription-like agreements, the sticky patient-physician relationship and our long-term partnership model, which is typically 20 years in duration, results in a growing and recurring revenue stream and provides visibility into the near-term and long-term financial trajectory for both agilon and our anchor physician groups.
We believe the combination of these subscription-like agreements, the sticky patient-physician relationship and our long-term partnership model, which is typically 20 years in duration, results in a growing and recurring revenue stream and provides visibility into the near-term and long-term financial trajectory for both agilon and our anchor physician groups.
The FCA provides, in part, that the federal government may bring a lawsuit against any person whom it believes has knowingly or recklessly: presented, or caused to be presented, a false or fraudulent claim for payment or approval to the federal government; made, used or caused to be made or used a false statement or a false record to get a claim for payment approved, including a false or fraudulent claim; concealed, or knowingly and improperly avoided or decreased, an obligation to pay or transmit money or property to the federal 10 Table of Contents government; or conspired to commit any of the foregoing.
The FCA provides, in part, that the federal government may bring a lawsuit against any person whom it believes has knowingly or recklessly: presented, or caused to be presented, a false or fraudulent claim for payment or approval to the federal government; made, used or caused to be made or used a false statement or a false record to get a claim for payment approved, including a false or fraudulent claim; concealed, or knowingly and improperly avoided or decreased, an obligation to pay or transmit money or property to the federal government; or conspired to commit any of the foregoing.
Sanctions for violation of the Stark Law include denial of payment for claims for services provided in violation of the prohibition, refunds of amounts collected in violation of the prohibition, a civil penalty of up to $15,000 for each service 12 Table of Contents arising out of the prohibited referral, a civil penalty of up to $100,000 against parties that enter into a scheme to circumvent the Stark Law prohibition, civil assessment of up to three times the amount claimed, and potential exclusion from the federal healthcare programs, including Medicare and Medicaid.
Sanctions for violation of the Stark Law include denial of payment for claims for services provided in violation of the prohibition, refunds of amounts collected in violation of the prohibition, a civil penalty of up to $15,000 for each service arising out of the prohibited referral, a civil penalty of up to $100,000 against parties that enter into a scheme to circumvent the Stark Law prohibition, civil assessment of up to three times the amount claimed, and potential exclusion from the federal healthcare programs, including Medicare and Medicaid.
Such growth, and our long-term contracts with physician partners, could expose us to risks related to antitrust investigations and litigation. Competition and antitrust law inquiries often continue for several years and, if violations are found, can result in substantial financial exposure. 16 Table of Contents U.S. Foreign Corrupt Practices Act of 1977 and Various Anticorruption Laws The U.S.
Such growth, and our long-term contracts with physician partners, could expose us to risks related to antitrust investigations and litigation. Competition and antitrust law inquiries often continue for several years and, if violations are found, can result in substantial financial exposure. U.S. Foreign Corrupt Practices Act of 1977 and Various Anticorruption Laws The U.S.
Intellectual Property We rely on a combination of international and U.S. trademark law as well as confidentiality procedures and contractual provisions to protect our trade secrets, including proprietary technology, databases and our brand. 7 Table of Contents We have registered “agilon health,” and “Medicare Quick Thinking,” as trademarks in the United States, which expire in 2028 and 2034, respectively.
Intellectual Property We rely on a combination of international and U.S. trademark law as well as confidentiality procedures and contractual provisions to protect our trade secrets, including proprietary technology, databases and our brand. We have registered “agilon health,” and “Medicare Quick Thinking,” as trademarks in the United States, which expire in 2028 and 2034, respectively.
We embrace inclusion and belonging. Together with our physician partners, we empower the care that our families and friends deserve. • Innovation: We rapidly adapt to our changing world and embrace the creativity of our physician partners and each other. • Quality and Service Excellence: We value results, not activity.
Together with our physician partners, we empower the care that our families and friends deserve. • Innovation: We rapidly adapt to our changing world and embrace the creativity of our physician partners and each other. • Quality and Service Excellence: We value results, not activity.
Under Section 6031 of the Deficit Reduction Act of 2005, as amended, if a state enacts a false claims act that is at least as stringent as the federal statute and that also meets certain other requirements, the state will be eligible to receive a greater share of any monetary recovery obtained pursuant to certain actions brought under the state’s equivalent to the FCA.
Under Section 6031 of the Deficit Reduction Act of 2005, as amended, if a state enacts a false claims act that is at least as stringent as the federal statute and that also 11 Table of Contents meets certain other requirements, the state will be eligible to receive a greater share of any monetary recovery obtained pursuant to certain actions brought under the state’s equivalent to the FCA.
We have formed long-term partnerships with diverse leading community-based physician groups in geographies such as Connecticut, Georgia, Kentucky, Maine, Michigan, Minnesota, New York, North Carolina, Ohio, Pennsylvania, Tennessee, and Texas.
We have formed long-term partnerships with diverse leading community-based physician groups in geographies such as Connecticut, Georgia, Illinois, Kentucky, Michigan, Minnesota, New York, North Carolina, Ohio, Pennsylvania, Tennessee, and Texas.
Securities and Exchange Commission (“SEC”). Additionally, the SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us, at www.sec.gov. 17 Table of Contents
Securities and Exchange Commission (“SEC”). Additionally, the SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us, at www.sec.gov. 18 Table of Contents
There are certain AKS “safe harbors” which, if the respective requirements are met, would afford protection from the AKS. Failure to meet all requirements of an AKS safe harbor does not necessarily mean the arrangement violates 11 Table of Contents the AKS, but it may be subject to scrutiny by legal authorities, in light of the parties’ intent and arrangements.
There are certain AKS “safe harbors” which, if the respective requirements are met, would afford protection from the AKS. Failure to meet all requirements of an AKS safe harbor does not necessarily mean the arrangement violates the AKS, but it may be subject to scrutiny by legal authorities, in light of the parties’ intent and arrangements.
The ACA includes a variety of healthcare reform provisions and requirements, which continue to be implemented and substantially changed the way healthcare is financed by both governmental and private insurers. However, due to government action over the last several years, a number of changes have been made to the provisions of the ACA since 2010, including reduced funding.
The ACA includes a variety of healthcare reform provisions and requirements, which continue to be implemented and substantially changed the way healthcare is financed by both governmental and private insurers. 14 Table of Contents However, due to government action over the last several years, a number of changes have been made to the provisions of the ACA since 2010, including reduced funding.
While HIPAA does not create a private right of action allowing individuals to sue us in federal court for violations of HIPAA, its standards have been used as a basis for establishing a duty of care in state-law civil suits alleging negligence or recklessness for the misuse of PHI.
While HIPAA does not create a private right of action allowing individuals to sue us in federal court for violations of HIPAA, its standards have been used as a 15 Table of Contents basis for establishing a duty of care in state-law civil suits alleging negligence or recklessness for the misuse of PHI.
We refer to these groups as our “anchor physician groups.” Individual MA members whose care is provided by PCPs employed or affiliated with our anchor physician groups are attributed to the RBE, which bears financial responsibility for the associated medical costs of such members.
We refer to 4 Table of Contents these groups as our “anchor physician groups.” Individual MA members whose care is provided by PCPs employed or affiliated with our anchor physician groups are attributed to the RBE, which bears financial responsibility for the associated medical costs of such members.
Thus, although the FTC does not technically enforce the Sherman Act, it can bring cases under the FTC Act against the same kinds of activities that violate the Sherman Act. The FTC Act also reaches other practices that harm competition, but that may not fit neatly into categories of conduct formally prohibited by the Sherman Act.
Thus, although the FTC does not technically enforce the Sherman Act, it can bring cases under the FTC Act against the same kinds of activities that violate the Sherman Act. The FTC Act also reaches other practices that harm competition, but that may not 16 Table of Contents fit neatly into categories of conduct formally prohibited by the Sherman Act.
Our purpose-built platform is comprised of an integrated set of capabilities designed to continuously improve, helping our anchor physician groups to identify gaps in care, integrate seamlessly with payors, sustain their practices, and identify untapped opportunities for improved outcomes.
Our purpose-built platform is comprised of an integrated set of capabilities 3 Table of Contents designed to continuously improve, helping our anchor physician groups to identify gaps in care, integrate seamlessly with payors, sustain their practices, and identify untapped opportunities for improved outcomes.
This base compensation is initially negotiated with the RBE for the first ten years of each agreement, subject to annual 4 Table of Contents increases based on current market rates and other agreed upon adjustment factors, after which it is subject to renegotiation.
This base compensation is initially negotiated with the RBE for the first ten years of each agreement, subject to annual increases based on current market rates and other agreed upon adjustment factors, after which it is subject to renegotiation.
While we believe that our practices are in substantial compliance with the CPOM laws to which we are subject, if a state determines that we are not in compliance that may result in a material adverse effect on our business, results of operations or financial condition.
While we 10 Table of Contents believe that our practices are in substantial compliance with the CPOM laws to which we are subject, if a state determines that we are not in compliance that may result in a material adverse effect on our business, results of operations or financial condition.
Privacy and security laws and regulations often change due to new or amended legislation, regulations or administrative interpretation. 14 Table of Contents Congress enacted HIPAA, in part, to combat healthcare fraud and to protect the privacy and security of patients’ individually identifiable healthcare information.
Privacy and security laws and regulations often change due to new or amended legislation, regulations or administrative interpretation. Congress enacted HIPAA, in part, to combat healthcare fraud and to protect the privacy and security of patients’ individually identifiable healthcare information.
However, certain of our contracts are also terminable immediately upon the occurrence of certain events. For example, some of our contracts may be terminated immediately by the payor if we lose applicable licenses, go bankrupt, lose our liability insurance or receive an exclusion, suspension or debarment from state or federal government authorities.
However, certain of our contracts are also terminable immediately upon the occurrence of certain events. For example, some of our contracts may be terminated immediately by the payor if we lose applicable licenses, declare bankruptcy, lose our liability insurance, or receive an exclusion, suspension or debarment from certain state or federal government authorities.
Our company was formed in 2016, and we established our inaugural partnership with an anchor physician group in 2017. Our ability to rapidly build scaled positions in local communities has allowed us to grow to 29 anchor physician groups and 30 geographies as of December 31, 2024.
Our company was formed in 2016, and we established our inaugural partnership with an anchor physician group in 2017. Our ability to rapidly build scaled positions in local communities has allowed us to grow to 28 anchor physician groups and 30 geographies as of December 31, 2025.
Our enterprise marketing team develops branding strategies and identities in our geographies and supports the development of communication and branding materials to support the local growth of our physician partners and their Medicare patient population. This begins with our entry into a new geography.
Our marketing and communications team develops branding strategies and identities in our geographies and supports the development of educational communication programs and materials to support the local growth of our physician partners and their Medicare patient population. This begins with our entry into a new geography.
We perform monthly 13 Table of Contents checks on our employees, affiliated providers and certain affiliates and vendors using government databases to confirm that these individuals have not been excluded from federal programs.
We perform monthly checks on our employees, affiliated providers and certain affiliates and vendors using government databases to confirm that these individuals have not been excluded from federal programs.
We believe that our compliance program meets the relevant standards provided by the OIG of the HHS. An important part of our compliance program consists of conducting periodic audits of various aspects of our operations. We also conduct mandatory educational programs designed to familiarize our employees with the regulatory requirements and specific elements of our compliance program.
We believe that our compliance program meets the relevant standards provided by the OIG of the HHS. An important part of our compliance program 17 Table of Contents consists of conducting periodic audits of various aspects of our operations. We also conduct mandatory training designed to familiarize our employees with the regulatory requirements and specific elements of our compliance program.
The premium payments to payors are based on county-level benchmark rates established by CMS and payors’ annual bid of amounts necessary to cover the cost of a standard MA patient, and are influenced by several factors, including, but not limited to, the applicable MA plan’s STAR rating and CMS’ risk-adjustment model, which compensates payors based on the health status (acuity) of each individual patient in the preceding calendar year.
The premium payments to payors are based on county-level benchmark rates established by CMS and payors’ annual bid of amounts necessary to cover the cost of a standard MA patient, and are influenced by several factors, including, but not limited to, the applicable MA plan’s STAR rating, whereby CMS provides quality bonus payments tied to STAR ratings and CMS’ risk-adjustment model, which 5 Table of Contents compensates payors based on the health status (acuity) of each individual patient in the preceding calendar year.
As of December 31, 2024, the PCPs on our platform serve approximately 526,500 MA members and 132,100 Medicare fee-for-service (“FFS”) beneficiaries through ten Accountable Care Organizations (“ACOs”) through our participation in the Centers for Medicare & Medicaid Services’ (“CMS”) Accountable Care Organization Realizing Equity, Access, and Community Health (“ACO REACH”) Model and Medicare Shared Savings Program (“MSSP,” and together with ACO REACH, the “CMS ACO Models”) through its equity method investments.
As of December 31, 2025, the PCPs on our platform serve approximately 511,000 MA members and 114,000 Medicare fee-for-service (“FFS”) beneficiaries through nine Accountable Care Organizations (“ACOs”) through our participation in the Centers for Medicare & Medicaid Services’ (“CMS”) Accountable Care Organization Realizing Equity, Access, and Community Health (“ACO REACH”) Model and Medicare Shared Savings Program (“MSSP,” and together with ACO REACH, the “CMS ACO Models”) through its equity method investments.
We aim to attract, develop, retain and support a diverse workforce that reflects the many members, physician partners, and communities we serve. Our executive leadership team and other senior leaders support our efforts. To advance these objectives, the Company offers training on topics such as leading inclusively, anti-harassment, anti-discrimination, and unconscious bias.
We aim to attract, develop, retain and support a diverse workforce that reflects the many members, physician partners, and communities we serve. Our executive leadership team and other senior leaders support our efforts. To advance these objectives, we offer training on topics such as leading inclusively, anti-harassment, 9 Table of Contents and anti-discrimination.
Section 1876 of the Social Security Act Section 1876 of the Social Security Act prohibits MA plans and their downstream entities from entering into compensation arrangements with physicians that may directly or indirectly have an effect of reducing or limiting services to individual members. We have sought to structure our compensation arrangements with physicians to ensure compliance with this requirement.
Section 1876 of the Social Security Act Section 1876 of the Social Security Act prohibits MA plans and their downstream entities from entering into compensation arrangements with physicians that may directly or indirectly have an effect of reducing or limiting services to individual members.
Federal, State, and International Privacy and Security Requirements We are subject to various federal, state and local laws and rules regarding the use, security and disclosure of PHI, personally identifiable information, de-identified data and other categories of confidential or legally protected data that our businesses may handle.
Such changes could have a material adverse effect on our financial condition. Federal, State, and International Privacy and Security Requirements We are subject to various federal, state and local laws and rules regarding the use, security and disclosure of PHI, personally identifiable information, de-identified data and other categories of confidential or legally protected data that our businesses may handle.
By 2025, CMS has indicated that they will no longer pay any portion to such physician partner based on FFS compensation rates, and will transition to compensating physician partners through their applicable ACO on a PBPM basis.
Effective 2025, CMS no longer pays any portion to such physician partner based on FFS compensation rates and will transition to compensating physician partners through their applicable ACO on a PBPM basis.
Among other changes, the rules contain safe harbors for value-based arrangements centering around value-based enterprises, which are enterprises composed of participants collaborating to achieve one or more value-based purposes, including coordinating and managing the care of a target patient population and coordinating and managing the care of a target population.
Among other changes, the rules contain safe harbors for value-based arrangements centering around value-based enterprises, which are enterprises composed of participants collaborating to achieve one or more value-based purposes, including coordinating and managing the care of a target patient. These rules also provide additional protections to our payment models with providers.
For example, certain states may require ACOs to obtain specific licensure to participate in the ACO REACH Model and assume risk directly from CMS. There likely will continue to be regulatory proposals directed at containing or lowering the cost of healthcare. Further, CMS also routinely adjusts the risk adjustment factor which is central to payment under the MA program.
For example, certain states may require ACOs to obtain specific licensure to participate in the ACO REACH Model and assume risk directly from CMS. There likely will continue to be regulatory proposals directed at containing or lowering the cost of healthcare.
These rules also provide additional protections to our payment models with providers. We have endeavored to structure our business arrangements with healthcare providers to comply with the AKS or fit within an AKS safe harbor.
We have endeavored to structure our business arrangements with healthcare providers to comply with the AKS or fit within an AKS safe harbor.
The TCPA was enacted by Congress to combat aggressive telemarketing and fax advertising practices believed to invade consumer privacy. The TCPA also regulates the use of automated equipment to deliver calls or text messages to mobile phones without prior express consent. Congress empowered the FCC to interpret the TCPA through rules, regulations and declaratory rulings.
The TCPA also regulates the use of automated equipment to deliver calls or text messages to mobile phones without prior express consent. Congress empowered the FCC to interpret the TCPA through rules, regulations and declaratory rulings.
Health Care Fraud Statute The Health Care Fraud Statute, 18 U.S.C. § 1347, is a criminal statute that prohibits any person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, which can be either a government or private payor plan.
We have sought to structure our compensation arrangements with physicians to ensure compliance with this requirement. 13 Table of Contents Health Care Fraud Statute The Health Care Fraud Statute, 18 U.S.C. § 1347, is a criminal statute that prohibits any person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, which can be either a government or private payor plan.
Additionally, we believe our network of like-minded physician partners also attracts new physicians to join, as access to cross-market know-how and best practices encourages success in a Total Care Model.
Additionally, we believe our network of like-minded physician partners also attracts new physicians to join individual practices that are part of our physician network, as access to cross-market knowledge, experience, and best practices encourages success in our value-based care model, also known as the Total Care Model.
Our employees do not include our physician partners, whom we do not directly employ. 9 Table of Contents Healthcare and Other Applicable Regulatory Matters The healthcare industry is highly regulated under state, federal, and international laws and regulations.
None of our employees are members of a labor union, and we have not experienced a work stoppage. Our employees do not include our physician partners, whom we do not directly employ. Healthcare and Other Applicable Regulatory Matters The healthcare industry is highly regulated under state, federal, and international laws and regulations.
The distinct subsidiary entities of our company and the national payor are the parties to these contract. Payors with which we contract include large national health plans as well as smaller local and regional insurers.
We typically maintain various contracts with a single national payor in order to reflect varying economic terms across our geographies. The distinct subsidiary entities of our company and the national payor are the parties to these contracts. Payors with which we contract include large national health plans as well as smaller local and regional insurers.
The payor generally retains responsibility for paying claims on our behalf, funding under the applicable agreement is utilized by the payor to pay such claims, and we receive surplus distributions on a monthly or quarterly basis. In these arrangements, the payor maintains the responsibility for entering into contractual agreements with network hospitals, network specialty physicians, and ancillary or other providers.
The payor generally retains responsibility for paying claims on our behalf. Funding under the applicable payor agreement is utilized by the payor to pay such claims, and we receive surplus distributions on a monthly or quarterly basis.
Marketing and Distribution In accordance with Medicare marketing guidelines, health plan payors are responsible for marketing directly to patients. Our focus is on outreach to existing community-based physician groups to join our platform, establishing and maintaining our local branding and strategies to support education for our Medicare-eligible members in evaluating their Medicare options.
Our focus is on outreach to existing community-based physician groups to join our platform, as well as establishing and maintaining our local branding and strategies to support education for Medicare-eligible patients to assist in evaluating their Medicare options.
Our Total Rewards programs include short-term and long-term incentives, recognition programs, a 401(k) plan, health and welfare insurance benefits, unlimited paid time off for exempt employees and accrued paid time off for hourly employees, flexible work schedules, and family leave, among many others, depending on eligibility.
Our Total Rewards offerings include base pay, short- and long-term incentive opportunities, recognition programs, a 401(k) plan, health and welfare benefits, paid time off (including unlimited paid time off for exempt employees and accrued paid time off for hourly employees), flexible work arrangements, and family leave, among other benefits, subject to eligibility.
Additionally, certain of our contracts with payors incorporate provisions in which we are eligible to earn additional payments on top of our capitation payments based upon the attainment of defined quality performance criteria correlated to applicable STAR ratings criteria. Premiums received may be subject to future adjustment.
Additionally, certain of our contracts with payors incorporate provisions in which we are eligible to earn additional payments in addition to our capitation payments based upon the attainment of defined quality performance criteria correlated to applicable STAR ratings criteria, and may also subject us to reduced payments or penalties if we fail to meet such criteria.
We may be unable to obtain, maintain and enforce our intellectual property rights, and assertions by third parties that we violate their intellectual property rights could have a material adverse effect on our business, financial condition and results of operations.
We may be unable to obtain, maintain and enforce our intellectual property rights, and assertions by third parties that we violate their intellectual property rights could have a material adverse effect on our business, financial condition and results of operations. 8 Table of Contents Human Capital Overview At agilon, our people are an indispensable contributor to our success and are critical to our ability to execute our strategy.
We believe we have effective oversight of our health and safety programs, which includes performing regular health and safety reviews intended to ensure that proper policies are in place. Training and Development We prioritize and invest in creating opportunities to help employees grow and build their careers through a multitude of training and development programs.
We believe we have effective oversight of our health and safety programs, which includes performing regular health and safety reviews intended to ensure that proper policies are in place. Training and Development We aim to support employee growth and career development through a range of learning opportunities and resources.
We have developed local contracts across multiple payors, along with national form contracts with certain key payors, which provide a consistency of non-financial contract terms, data sharing, operational processes and governance structures and support portability of the agilon platform. We typically maintain various contracts with a single national payor in order to reflect varying economic terms across our geographies.
Premiums received may be subject to retroactive adjustment by CMS. We have developed local contracts across multiple payors, along with national form contracts with certain key payors, which provide a consistency of non-financial contract terms, data sharing, operational processes and governance structures and support portability of the agilon platform, where feasible.
CMS ACO Models agilon, in conjunction with some of our physician partners, participated in the ACO REACH Model and MSSP in certain geographies, through 10 approved ACOs. Both the ACO REACH Model and MSSP are voluntary payment model options established by CMS aimed at reducing expenditures and preserving or enhancing quality of care for beneficiaries in traditional Medicare FFS.
Both the ACO REACH Model and MSSP are voluntary payment model options implemented by CMS aimed at containing or reducing expenditures while preserving or enhancing quality of care for beneficiaries in traditional Medicare FFS.
CMS has certain additional termination rights, including in connection with the termination of the ACO REACH Model or non-compliance of the ACO.
The ACO may terminate its participation agreement with CMS at any time upon advance written notice. CMS has certain additional termination rights, including in connection with the termination of the ACO REACH Model or non-compliance of the ACO.
The 3 Table of Contents ability to share best practices, influence the development of the platform, compare notes on the transition to a Total Care Model and learn from one another represents a valuable opportunity for physicians.
We believe the value of this network is demonstrated by our ability to add new physician partners and to attract additional PCPs to our physician partners. The ability to share best practices, influence the development of the platform, compare notes on the transition to a Total Care Model and learn from one another represents a valuable opportunity for physicians.
Our ACOs participating medical group agreements provide for mutual indemnification rights, and have an initial term through December 31, 2026, unless earlier terminated. 6 Table of Contents All ACO REACH entities continue to be subject to the following requirements in 2025: (i) implementation of a robust health equity plan to identify and better serve underserved communities; (ii) 75% control of each ACOs governing body must be held by participating providers or their designated representatives and (iii) each ACO must have at least two beneficiary representatives on its governing board (at least one Medicare beneficiary and at least one consumer advocate), both of whom must hold voting rights.
All ACO REACH entities continue to be subject to the following requirements in 2026: (i) 75% control of each ACO’s governing body must be held by participating providers or their designated representatives and (ii) each ACO must have at least two beneficiary representatives on its governing board (at least one Medicare beneficiary and at least one consumer advocate), both of whom must hold voting rights.
For a description of our significant activities during 2024, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—2024 Results” in this Report. Our business model is differentiated by its focus on existing community-based physician groups and is built around three key elements: (1) agilon’s platform; (2) agilon’s long-term physician partnership approach; and (3) agilon’s network.
Our business model is differentiated by its focus on existing community-based physician groups and is built around three key elements: (1) agilon’s platform; (2) agilon’s long-term physician partnership approach; and (3) agilon’s network.
Members are able to select the plan and benefit design that meets their individual needs while our platform enables a seamless experience regardless of plan or product for all patients and physician groups. 5 Table of Contents The agreements with our payors outline the range of healthcare services for which we are financially responsible and at risk and the services for which we are contracted to perform on the payor’s behalf and the key financial terms.
Members are able to select the plan and benefit design that meets their individual needs while our platform enables a seamless experience regardless of plan or product for all patients and physician groups.
Federal and state consumer protection laws, including laws that do not, on their face, specifically address data privacy or security, have been applied to data privacy and security matters by a range of government agencies and courts. 15 Table of Contents Consumer Protection Laws agilon may be subject to the Telephone Consumer Protection Act (“TCPA”), which regulates the manner in which a business may advertise its products and services to consumers by phone, text and fax.
Federal and state consumer protection laws, including laws that do not, on their face, specifically address data privacy or security, have been applied to data privacy and security matters by a range of government agencies and courts.
People join agilon because of our vision: To transform the future of healthcare in communities across the country by empowering exceptional patient-physician relationships. Together with our employees and physician partners, we have defined our company values and commitments to guide our everyday actions in executing our mission: • Partnership and Collaboration: We are One Team. We collaborate deeply.
Together with our employees and physician partners, we have defined our company values and commitments to guide our everyday actions in executing our mission: • Partnership and Collaboration: We are One Team. We collaborate deeply. We embrace inclusion and belonging.
The ACOs operate in partnership pursuant to participating medical group agreements with one or more of our physician partners in certain geographies. In ACO REACH, our contracted physician partners provide Medicare services to their aligned beneficiaries, and bill CMS on a FFS basis for such services.
In ACO REACH, our contracted physician partners provide Medicare services to their aligned beneficiaries, and bill CMS on an FFS basis for such services.
Additionally, some states have enacted statutes and regulations similar to the AKS, but which may be applicable regardless of the payor source for the patient. These state laws may contain exceptions and safe harbors that are different from and/or more limited than those of federal law and that may vary from state to state.
Additionally, some states have enacted statutes and regulations similar to the AKS, but which may be applicable regardless of the payor source for the patient.
In addition, as in previous years, the CMS Innovation Center announced that ACO REACH would include technical adjustments to the model’s parameters, including changes to benchmark calculations, and the adjustments will continue into 2025. The overall effect of these changes on our ACOs financial performance is expected to be minimal.
In addition, as in previous years, the CMS Innovation Center announced that ACO REACH would include technical adjustments in 2026 to the model’s parameters, including changes to benchmark calculations, risk adjustment models and risk score growth, and risk corridors.
We create a local brand that embodies the value of the Total Care Model for patients and of our physician partner’s commitment to quality care. Each geography typically includes the anchor partner’s name and “Senior Health Connect” as part of the naming convention to help reinforce the value of our national network to payors and other industry constituents.
Each geography typically includes the anchor partner’s name and “Senior Health Connect” as part 7 Table of Contents of the naming convention to help reinforce the value of our national physician network to payors and other industry constituents. Patients are offered educational opportunities and materials to help them make informed decisions about their coverage options.
Human Capital Overview At agilon, our people are an indispensable contributor to our success and are critical to our ability to execute our strategy. We believe we have a responsibility to foster the best possible work environment for everyone in our organization through total rewards, inclusion and belonging, training and development, and health and safety.
We believe we have a responsibility to foster the best possible work environment for everyone in our organization through total rewards, inclusion and belonging, training and development, and health and safety. People join agilon because of our vision: To transform the future of healthcare in communities across the country by empowering exceptional patient-physician relationships.
As part of our efforts to promote pay equity, we have implemented measures in our U.S. offices such as routinely benchmarking roles against market comparables, increasing pay transparency for applicants and associates, setting pay ranges based on role and experience, applying consistent processes for annual merit increases and bonuses and driving additional ongoing and future improvements.
As part of our effort to promote fairness, we have implemented practices in our U.S. offices designed to promote fair and consistent pay decisions, including routine benchmarking of roles to market data, enhanced pay transparency for applicants and employees, establishing pay ranges based on role and experience, and applying consistent processes for annual merit increases and bonus determinations, along with ongoing enhancements to these practices.
Our Compensation and Human Capital Committee of our Board of Directors (the “Board”) is responsible for overseeing our human capital practices and management compensation philosophy. Our Chief People Officer reports on important human capital management topics to this committee every quarter. Our human capital management efforts are supported by our dedicated human resources team.
Our Compensation and Human Capital Committee of the Board of Directors (the “Board”) oversees our human capital practices and management compensation philosophy. Our Chief Legal Officer and Corporate Secretary, serving as Interim Chief People Officer, reports to the Compensation and Human Capital Committee each quarter on key human capital management topics.
We have also endeavored to structure our participation in the ACO REACH Model to comply with waivers of the AKS issued by the Secretary of HHS.
These state laws may contain exceptions and safe harbors that are different from and/or more limited than those of federal law and that may vary from state to state. 12 Table of Contents We have also endeavored to structure our participation in the ACO REACH Model to comply with waivers of the AKS issued by the Secretary of HHS.
This team supports the business in identifying and recruiting top talent, supporting the onboarding and orientation of new hires through a comprehensive new employee orientation, a manager’s toolkit and resources to support onboarding, goal setting, and in-year management, as well as a comprehensive semi-annual review process that ties to our company values and supports continuous learning and improvement.
Our human capital management efforts are supported by our dedicated People team, which partners with the business to attract and hire talent, support onboarding and orientation through a comprehensive employee orientation program and manager toolkits, and enable goal setting and ongoing performance management, including a semi-annual review process aligned to our company values and designed to support continuous learning and improvement.
We regularly assess our compensation and benefits programs to maintain a competitive and well-rounded Total Rewards strategy. Our offerings are designed to provide competitive compensation and benefits that cater to the diverse needs of our multi-generational workforce.
Total Rewards We recognize that our employees are critical to our success, and we seek to provide comprehensive and competitive compensation and benefits that support their diverse needs. We periodically evaluate and refine our Total Rewards programs to maintain market competitiveness and alignment with our workforce and business strategy.
Our efforts to promote a positive employee experience and build culture are further supported and enhanced by local and national in-person and 8 Table of Contents virtual events, including town halls, in-office and/or virtual celebrations, employee activity committees and recognition awards, meant to champion our employees and create a sense of community.
We also promote a positive employee experience and culture through local and national in-person and virtual events, including town halls, celebrations, employee activity committees, and recognition awards that foster connection and community. In addition, we conduct annual employee engagement surveys to gather feedback and inform annual planning for initiatives that support our team members.
Regulatory agencies have broad discretion to issue new regulations and enforce the laws and regulations and have been increasingly active in enforcing the laws and regulations against healthcare companies, including companies that provide managed care.
Congress may pass new laws, and regulatory agencies are directed by statute or delegated authority to issue new regulations and enforce new and existing laws and regulations. Recently, some federal agencies have increased enforcement activity regarding healthcare companies, including companies that provide managed care.
These programs, in addition to focusing on career development, and professional development, reinforce the importance of compliance and ethical behavior embodied in our Code of Conduct and related policies and training, which all employees must complete upon hire and annually thereafter.
Our training programs also emphasize compliance and ethical conduct, consistent with our Code of Conduct and related policies. All employees are required to complete Code of Conduct training upon hire and annually thereafter. We offer a mix of courses that build technical and role-specific skills, support leadership development, and strengthen capabilities needed for career progression.
Removed
Our platform has enabled us to grow our total membership by 36% and revenue by 40% from December 31, 2023 to December 31, 2024.
Added
On November 5, 2025, we received written notice (the “Notice”) from the NYSE informing us that we are no longer in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of our common stock was less than $1.00 per share over a consecutive 30 trading-day period ended November 4, 2025 (the “Price Criteria for Capital or Common Stock”).
Removed
We believe the value of this network is demonstrated by our ability to add new physician partners and to attract additional PCPs to our physician partners.
Added
We can regain compliance at any time within the six-month period following receipt of the Notice if, on the last trading day of any calendar month during the cure period (or the last trading day of the cure period), we have a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the prior 30 trading-day period ending on the last trading day of the applicable calendar month or the cure period.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks include, but are not limited to, the following: Risks Related to Our Business • our history of net losses and the expectation that our expenses will increase in the future; • failure to identify and develop successful new geographies, physician partners and payors, or execute upon our growth initiatives; • success in executing our operating strategies or achieving results consistent with our historical performance; • medical expenses incurred on behalf of our members may exceed revenues we receive; • inability to secure contracts with MA payors; • inability to grow new physician partner relationships sufficient to recover startup costs; • availability of additional capital, on acceptable terms or at all, to support our business in the future; • significant reduction in our membership; • transition to a Total Care Model may be challenging for physician partners; • public health crises, such as COVID-19, could adversely affect us; • inaccuracy in estimates of our members’ risk adjustment factors, medical services expense, incurred but not reported claims, and earnings pursuant to payor contracts; • the impact of restrictive clauses or exclusivity provisions in some of our contracts with physician partners; • inability to hire and retain qualified personnel; • ability to realize the full value of our intangible assets; • security breaches, cybersecurity attacks, loss of data and other disruptions to our information systems; • ability to protect the confidentiality of our know-how and other proprietary and internally developed information; • reliance on our subsidiaries; • our use of AI and machine learning in our business and challenges with properly managing the development and use of these technologies; Risks Related to Our Reliance on Third Parties • reliance on a limited number of key payors; • the limited terms of contracts with our payors and our ability to renew them upon expiration; • reliance on payors for membership attribution and assignment, timely data and reporting accuracy and claims payment; • dependence on physician partners and other providers to effectively manage the quality and cost of care and perform obligations under payor contracts; • ability to obtain accurate and complete diagnosis data; • dependence on physician partners to document their services and any inaccuracies could result in overpayments, recoupments or liability under the federal FCA or through RADV audits (defined below); • reliance on third-party software, data, infrastructure and bandwidth; Risks Related to Our Industry and Government Programs • consolidation in the healthcare industry; • discontinuance or reductions in federal government healthcare programs’ reimbursement rates or methodologies applied to derive reimbursement; 18 Table of Contents • uncertain or adverse economic and macroeconomic conditions, including a downturn or decrease in government expenditures; • competition in our industry; • dependence on government performance standards and benchmarks; • government funding for healthcare programs is subject to statutory and regulatory changes, administrative rulings, interpretations of policy and determinations by intermediaries and governmental funding restrictions; • regulatory proposals directed at containing or lowering the cost of healthcare, including the ACO REACH Model, and our participation, voluntary or otherwise, in such proposed models; • federal and state investigations, audits and enforcement actions; • regulatory inquiries and corrective action plans imposed by our payors; • repayment obligations arising out of payor audits; • modification of the methodology utilized to determine revenue associated with MA members; • negative publicity regarding the managed healthcare industry generally; Legal and Regulatory Risks • our ability to comply with regulation of the healthcare industry at the federal, state and local levels; • our and our physician partners’ ability to comply with federal and state fraud and abuse laws, including physician incentive plan laws and regulations; • implication of laws and regulations regarding marketing, beneficiary inducements, telemarketing and use of protected health information; • our use, disclosure and processing of personally identifiable information, PHI, and de-identified data is subject to HIPAA and state patient confidentiality laws; • failure to obtain or maintain an insurance license, a certificate of authority or an equivalent authorization; • regulation of the corporate practice of medicine; • inadvertent employment or contract with an excluded person by us or our physician partners; • changes in tax laws and regulations, or changes in related judgments or assumptions; Risks Related to Our Indebtedness • incurrence of substantially more indebtedness, which could increase the risks created by our indebtedness; • restrictions and limitations in our agreements and instruments governing our indebtedness; Risks Related to Our Common Stock • dependence on our subsidiaries for cash to fund all of our operations and expenses; • volatility of, or decline in, our stock price, could result in substantial losses for your investment; • coverage by securities analysts may not be favorable or may cease; • under our Certificate of Incorporation, Clayton, Dubilier & Rice, LLC (“CD&R”) and its affiliates and, in some circumstances, each of our directors and officers who is also a director, officer, employee, member or partner of CD&R and its affiliates, have no obligation to offer us corporate opportunities; • anti-takeover provisions in our Certificate of Incorporation and By-laws; • ability to achieve a return on your investment depends on appreciation in the price of our common stock; • exclusive forum provisions in our Certificate of Incorporation; General Risks • lawsuits not covered by insurance and securities class action litigation; and • sustainability issues, and our reporting on them. 19 Table of Contents You should carefully consider each of the following risk factors and all of the other information set forth in this report.
Biggest changeThese risks include, but are not limited to, the following: Risks Related to Our Business • our history of net losses and the expectation that our expenses will increase in the future; • failure to identify and develop successful new geographies, physician partners and payors, or execute upon our growth initiatives; • success in executing our operating strategies or achieving results consistent with our historical performance; • medical expenses incurred on behalf of our members may exceed revenues we receive; • inability to secure contracts with MA payors; • inability to grow new physician partner relationships sufficient to recover startup costs; • availability of additional capital, on acceptable terms or at all, to support our business in the future; • significant reduction in our membership; • transition to a Total Care Model may be challenging for physician partners; • inaccuracy in estimates of our members’ risk adjustment factors, medical services expense, incurred but not reported claims, and earnings pursuant to payor contracts; • public health crises, such as COVID-19, could adversely affect us; • the impact of restrictive clauses or exclusivity provisions in some of our contracts with physician partners; • inability to hire and retain qualified personnel; • ability to realize the full value of our intangible assets; • security breaches, cybersecurity attacks, loss of data and other disruptions to our information systems; • ability to protect the confidentiality of our know-how and other proprietary and internally developed information; • reliance on our subsidiaries; • our use of algorithms, AI, and machine learning in our business and challenges with properly managing the development and use of these technologies; Risks Related to Our Reliance on Third Parties • reliance on a limited number of key payors; • the limited terms of contracts with our payors and our ability to renew them upon expiration; • reliance on payors for timely and accurate membership attribution and assignment, data and reporting and claims payment; • dependence on physician partners and other providers to effectively manage the quality and cost of care and perform obligations under payor contracts; • ability to obtain accurate and complete diagnosis data; • dependence on physician partners to document their services and any inaccuracies could result in overpayments, recoupments or liability under the federal FCA or through RADV audits (defined below); • reliance on third-party software, data, infrastructure and bandwidth; Risks Related to Our Industry and Government Programs • consolidation in the healthcare industry; • discontinuance or reductions in federal government healthcare programs’ reimbursement rates or methodologies applied to derive reimbursement; 19 Table of Contents • uncertain or adverse economic and macroeconomic conditions, including a downturn or decrease in government expenditures; • competition in our industry; • dependence on government performance standards and benchmarks; • government funding for healthcare programs is subject to statutory and regulatory changes, administrative rulings, interpretations of policy and determinations by intermediaries and governmental funding restrictions; • regulatory proposals directed at containing or lowering the cost of healthcare, including the ACO REACH Model and the LEAD Model, and our participation, voluntary or otherwise, in such proposed models; • federal and state investigations, audits and enforcement actions; • regulatory inquiries and corrective action plans imposed by our payors; • repayment obligations arising out of payor audits; • modification of the methodology utilized to determine revenue associated with MA members; • negative publicity regarding the managed healthcare industry generally; Legal and Regulatory Risks • our ability to comply with regulation of the healthcare industry at the federal, state and local levels; • our and our physician partners’ ability to comply with federal and state fraud and abuse laws, including physician incentive plan laws and regulations; • our physician partners’ ability to submit accurate and supportable diagnosis information in compliance with CMS law and guidance; • implication of laws and regulations regarding marketing, beneficiary inducements, telemarketing and use of protected health information; • our use, disclosure and processing of personally identifiable information, PHI, and de-identified data is subject to HIPAA and state patient confidentiality laws; • failure to obtain or maintain an insurance license, a certificate of authority or an equivalent authorization; • regulation of the corporate practice of medicine; • inadvertent employment or contract with an excluded person by us or our physician partners; • changes in tax laws and regulations, or changes in related judgments or assumptions; Risks Related to Our Indebtedness • incurrence of substantially more indebtedness, which could increase the risks created by our indebtedness; • restrictions and limitations in our agreements and instruments governing our indebtedness; Risks Related to Our Common Stock • dependence on our subsidiaries for cash to fund all of our operations and expenses; • volatility of, or decline in, our stock price, could result in substantial losses for your investment; • coverage by securities analysts may not be favorable or may cease; • under our Certificate of Incorporation, Clayton, Dubilier & Rice, LLC (“CD&R”) and its affiliates and, in some circumstances, each of our directors and officers who is also a director, officer, employee, member or partner of CD&R and its affiliates, have no obligation to offer us corporate opportunities; • anti-takeover provisions in our Certificate of Incorporation and By-laws; • ability to achieve a return on your investment depends on appreciation in the price of our common stock; • exclusive forum provisions in our Certificate of Incorporation; • non-compliance with the rules of the NYSE could result in a delisting of our securities; 20 Table of Contents General Risks • lawsuits not covered by insurance and securities class action litigation; and • sustainability issues, and our reporting on them.
As our business grows, our physician partnership startup costs could outpace our buildup of recurring revenue if we do not achieve economies of scale, and we may be unable to achieve profitability until our revenues associated with new partnerships are more mature.
As our business grows, our physician partnership startup costs could outpace our buildup of recurring revenue if we do not achieve economies of scale, and we may be unable to achieve profitability until our revenues associated with new physician partnerships are more mature.
Accordingly, these restrictive provisions may limit growth and prevent us from entering into long-term relationships with potential partners and could cause our business, financial condition, cash flows, and results of operations to be harmed. Exclusivity provisions in some of our agreements with physician partners could subject us to investigations or litigation.
Accordingly, these restrictive provisions may limit growth and prevent us from entering into long-term relationships with potential physician partners and could cause our business, financial condition, cash flows, and results of operations to be harmed. Exclusivity provisions in some of our agreements with physician partners could subject us to investigations or litigation.
Our information technology and infrastructure, and that of our third-party service providers, may be vulnerable to various forms of attacks by hackers or to viruses, other technical failures or breaches due to third-party action, or due to employee and contractor negligence, error or malfeasance.
Our information technology and infrastructure, and that of our third-party service providers, may be vulnerable to various forms of attacks by hackers or to viruses, other technical failures or breaches due to third-party action, or due to employee and/or contractor negligence, error or malfeasance.
As our payors’ businesses respond to market dynamics and financial pressures, and as our payors make strategic business decisions with respect of the lines of business they pursue and programs in which they participate, certain of our payors have sought, and we expect that in the future additional payors will, from time to time, seek to renegotiate or terminate their contracts with us.
As our payors’ businesses respond to market dynamics and financial pressures, and as our payors make strategic business decisions with respect to the lines of business they pursue and programs in which they participate, certain of our payors have sought, and we expect that in the future additional payors will, from time to time, seek to renegotiate or terminate their contracts with us.
Our operations are subject to extensive federal, state and local government laws and regulations, such as: • Federal and state laws, and related regulations, including the fraud and abuse laws such as the FCA and Health Care Fraud Statute, which impose civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment, or knowingly make, or cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits, and impose civil monetary penalties on entities that fail to disclose and repay known overpayments; • Federal and state anti-kickback laws, and related regulations, which generally prohibit arrangements intended to induce or reward referrals for items or services reimbursable by a healthcare program; • Federal and state physician self-referral prohibition statutes, and related regulations, which generally prohibit physicians from referring a patient to an entity providing certain DHS if the physician (or his/her immediate family member) has a financial relationship with that entity; • Provisions of, and regulations enacted pursuant to, HIPAA, as amended, HITECH, and the American Recovery and Reinvestment Act of 2009, as well as similar or more stringent state laws, regarding the collection, use and disclosure of health information; • Provisions of, and regulations enacted pursuant to, the 21 st Century Cures Act, regarding interoperability and prohibitions against information blocking; • Federal laws and regulations that require providers to enroll in the Medicare program before submitting any claims for services, to promptly report certain changes in operations to the agencies that administer these programs, and to re-enroll in these programs when changes in direct or indirect ownership occur or in response to revalidation requests from Medicare; 38 Table of Contents • Federal and state laws that govern managed care organizations, such as our payors, and downstream contracted entities, such as our RBEs, including laws governing timely payment of claims, quality assurance, utilization review, credentialing, financial solvency, downstream transfers of risk and payor-provider contractual relationships; • State laws that govern the activities of third-party administrators and utilization review agents; • Laws relating to competition and anticorruption; and • State laws that prohibit general business entities from practicing medicine, controlling physicians’ medical decisions or engaging in certain practices, such as splitting fees with physicians.
Our operations are subject to extensive federal, state and local government laws and regulations, such as: • federal and state laws, and related regulations, including the fraud and abuse laws such as the FCA and Health Care Fraud Statute, which impose civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment, or knowingly make, or cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits, and impose civil monetary penalties on entities that fail to disclose and repay known overpayments; • federal and state anti-kickback laws, and related regulations, which generally prohibit arrangements intended to induce or reward referrals for items or services reimbursable by a healthcare program; • federal and state physician self-referral prohibition statutes, and related regulations, which generally prohibit physicians from referring a patient to an entity providing certain DHS if the physician (or his/her immediate family member) has a financial relationship with that entity; • provisions of, and regulations enacted pursuant to, HIPAA, as amended, HITECH, and the American Recovery and Reinvestment Act of 2009, as well as similar or more stringent state laws, regarding the collection, use and disclosure of health information; • provisions of, and regulations enacted pursuant to, the 21 st Century Cures Act, regarding interoperability and prohibitions against information blocking; • federal laws and regulations that require providers to enroll in the Medicare program before submitting any claims for services, to promptly report certain changes in operations to the agencies that administer these programs, and to re-enroll in these programs when changes in direct or indirect ownership occur or in response to revalidation requests from Medicare; • federal and state laws that govern managed care organizations, such as our payors, and downstream contracted entities, such as our RBEs, including laws governing timely payment of claims, quality assurance, utilization review, credentialing, financial solvency, downstream transfers of risk and payor-provider contractual relationships; • state laws that govern the activities of third-party administrators and utilization review agents; • laws relating to competition and anticorruption; and • state laws that prohibit general business entities from practicing medicine, controlling physicians’ medical decisions or engaging in certain practices, such as splitting fees with physicians.
There are several factors that may be considered a change in circumstances indicating that the carrying value of our intangible assets, including goodwill may not be recoverable, including macroeconomic conditions, industry considerations, our overall financial performance (including an analysis of our current and projected cash flows), revenue and earnings, a sustained decrease in our share price and other relevant entity-specific events (including changes in strategy, physicians, members or litigation).
There are several factors that may be considered a change in circumstances indicating that the carrying value of our intangible assets, including goodwill may not be recoverable, including macroeconomic conditions, industry considerations, our overall financial performance (including an analysis of our current and projected cash flows), revenue and earnings, a sustained decrease in our share price and other relevant entity-specific events (including changes in strategy, management, physicians, members or litigation).
We use and expect to expand our use of AI and machine learning in our business and challenges with properly managing the development and use of these technologies could result in harm to our reputation, business or customers, legal liability and adversely affect our results of operations We use AI and machine learning solutions in, and we may in the future integrate additional AI and/or machine learning solutions into, our platform, offerings, products and services, and these applications may become more important in our operations over time.
We use and expect to expand our use of algorithms, AI, and machine learning in our business and challenges with properly managing the development and use of these technologies could result in harm to our reputation, business or customers, legal liability and adversely affect our results of operations We use algorithms, AI, and machine learning solutions in, and we may in the future integrate additional algorithms, AI, and/or machine learning solutions into, our platform, offerings, products and services, and these applications may become more important in our operations over time.
For example, our Certificate of Incorporation and By-laws collectively: • authorize the issuance of “blank check” preferred stock that could be issued by the Board to thwart a takeover attempt; • provide for a classified board of directors, which divides the Board into three classes, with members of each class serving staggered three-year terms, which prevents stockholders from electing an entirely new board of directors at an annual meeting; • limit the ability of stockholders to remove directors if CD&R ceases to beneficially own at least 40% of the outstanding shares of our common stock; • provide that vacancies on the Board, including vacancies resulting from an enlargement of the Board, may be filled only by a majority vote of directors then in office; • prohibit stockholders from calling special meetings of stockholders if CD&R ceases to beneficially own at least 40% of the outstanding shares of our common stock; • prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders, if CD&R ceases to beneficially own at least 40% of the outstanding shares of our common stock; • opt out of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prohibits a publicly-held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the time the person became an interested stockholder, until CD&R ceases to beneficially own at least 5% of the outstanding shares of our common stock; • establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders; and • require the approval of holders of at least 66 2/3% of the outstanding shares of our common stock to amend our By-laws and certain provisions of our Certificate of Incorporation if CD&R ceases to beneficially own at least 40% of the outstanding shares of our common stock.
For example, our Certificate of Incorporation and By-laws collectively: • authorize the issuance of “blank check” preferred stock that could be issued by the Board to thwart a takeover attempt; 48 Table of Contents • provide for a classified board of directors, which divides the Board into three classes, with members of each class serving staggered three-year terms, which prevents stockholders from electing an entirely new board of directors at an annual meeting; • limit the ability of stockholders to remove directors if CD&R ceases to beneficially own at least 40% of the outstanding shares of our common stock; • provide that vacancies on the Board, including vacancies resulting from an enlargement of the Board, may be filled only by a majority vote of directors then in office; • prohibit stockholders from calling special meetings of stockholders if CD&R ceases to beneficially own at least 40% of the outstanding shares of our common stock; • prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of the stockholders, if CD&R ceases to beneficially own at least 40% of the outstanding shares of our common stock; • opt out of Section 203 of the Delaware General Corporation Law (the “DGCL”), which prohibits a publicly-held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the time the person became an interested stockholder, until CD&R ceases to beneficially own at least 5% of the outstanding shares of our common stock; • establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders; and • require the approval of holders of at least 66 2/3% of the outstanding shares of our common stock to amend our By-laws and certain provisions of our Certificate of Incorporation if CD&R ceases to beneficially own at least 40% of the outstanding shares of our common stock.
Our business development and member engagement activities may implicate laws and regulations regarding marketing, beneficiary inducements, telemarketing and use of protected health information a violation of which could subject us to significant penalties and have an adverse effect on our business. Medicare product marketing and sales activities are regulated by CMS and the states in which we operate.
Our business development and member engagement activities may implicate laws and regulations regarding marketing, beneficiary inducements, telemarketing and use of protected health information, a violation of which could subject us to significant penalties and have an adverse effect on our business. Medicare product marketing and sales activities are regulated by CMS and states in which we operate.
To operate without interruption, both we and our service providers must guard against: • damage from fire, power loss, natural disasters and other events outside our control; • communications failures; • software and hardware errors, failures and crashes; • data security breaches, ransomware attacks, computer viruses, hacking, denial-of-service attacks and similar disruptions; and • other potential interruptions.
To operate without interruption, both we and our service providers must guard against: • damage from fire, power loss, natural disasters and other events outside our control; • communications failures; • software and hardware errors, failures and crashes; • cyberattacks, data security breaches, ransomware attacks, computer viruses, hacking, denial-of-service attacks and similar disruptions; and • other potential interruptions.
We rely on our payors for membership attribution and assignment, timely data and reporting accuracy and claims payment, and if our payors do not adequately fulfill these functions, fewer members may be attributed to our platform or we may not receive complete and accurate information necessary to effectively manage our business and forecast our expected profitability.
We rely on our payors for timely and accurate membership attribution and assignment, data and reporting, and claims payment, and if our payors do not adequately fulfill these functions, fewer members may be attributed to our platform or we may not receive complete and accurate information necessary to effectively manage our business and forecast our expected profitability.
Such breaches of our infrastructure or information, or that of our third-party providers, whether as a result of physical break-ins, computer viruses, cyberattacks, or employee, vendor or contractor error, negligence or malfeasance, can create system disruptions, shutdowns or unauthorized access, use, disclosure or modification of sensitive information, including PHI.
Such breaches of our infrastructure or information, or that of our third-party service providers, whether as a result of physical break-ins, computer viruses, cyberattacks, or employee, vendor or contractor error, negligence or malfeasance, can create system disruptions, shutdowns or unauthorized access, use, disclosure or modification of sensitive information, including PHI.
Therefore, we may be unsuccessful in executing contractual relationships with MA payors, or such contracts may be established at financial terms which result in lower revenues or higher costs than we project or that are necessary to generate profits in a given geography.
Therefore, we may be unsuccessful in executing contractual relationships with MA payors, or such contracts may be established at financial terms which result in lower revenues and/or higher costs than we project or that are necessary to generate profits in a given geography.
Additionally, our competitors or other industry participants may incorporate AI and/or machine learning into their products more quickly or more successfully than us, which could change our market dynamics, impair our ability to compete effectively and adversely affect our results of operations.
Additionally, our competitors or other industry participants may incorporate algorithms, AI, and/or machine learning into their products more quickly or more successfully than us, which could change our market dynamics, impair our ability to compete effectively and adversely affect our results of operations.
Generally, the use of AI and machine learning applications has in the past resulted in, and may in the future result in, cybersecurity incidents that implicate the personal data of end users of such applications. Any such cybersecurity incidents related to our use of AI and machine learning applications could adversely affect our reputation and results of operations.
Generally, the use of algorithms, AI, and machine learning applications has in the past resulted in, and may in the future result in, cybersecurity incidents that implicate the personal data of end users of such applications. Any such cybersecurity incidents related to our use of algorithms, AI, and machine learning applications could adversely affect our reputation and results of operations.
Accordingly, if we are unable to effectively manage our growth and replicate the success of our platform, partnership and network model in new geographies and with new partners, our business, financial condition, cash flows, and results of operations could be harmed.
Accordingly, if we are unable to effectively manage our growth and replicate the success of our platform, partnership and network model in new geographies and with new physician partners, our business, financial condition, cash flows, and results of operations could be harmed.
AI and machine learning also present emerging ethical issues and if our use of AI and/or machine learning becomes controversial, we may experience brand or reputational harm, competitive harm or legal liability.
Algorithms, AI, and machine learning also present emerging ethical issues and if our use of algorithms, AI, and/or machine learning becomes controversial, we may experience brand or reputational harm, competitive harm or legal liability.
In particular, we have experienced, and may in the future experience, financial or operational impacts as a result of COVID-19 or other public health crises which may be material, including: impacts on our medical costs and medical services revenue, therefor affecting our total cost of care; increased delayed costs as a result of our enrolled members being unable to see their PCPs or long term complications of any pandemics or health crisis; labor shortages; complete or partial closure of partner medical care facilities; and inability to implement clinical initiatives to manage healthcare costs and chronic conditions of our enrolled members and appropriately document their risk profiles.
In particular, we have experienced, and may in the future experience, financial or operational impacts as a result of public health crises which may be material, including: impacts on our medical costs and medical services revenue, therefor affecting our total cost of care; increased delayed costs as a result of our enrolled members being unable to see their PCPs or long term complications of any pandemics or health crisis; labor shortages; complete or partial closure of partner medical care facilities; and the inability to implement clinical initiatives to manage healthcare costs and chronic conditions of our enrolled members and appropriately document their risk profiles.
Our payors are subject to a number of risks including reductions in payment rates from governmental programs, including STARS ratings, higher than expected healthcare costs and lack of predictability of financial results when entering into new lines of business, particularly with high-risk populations. For example, utilization rates in 2024 resulted in higher healthcare costs.
Our payors are subject to a number of risks including reductions in payment rates from governmental programs, including STARS ratings, higher than expected healthcare costs and lack of predictability of financial results when entering into new lines of business, particularly with high-risk populations. For example, utilization rates in 2025 resulted in higher healthcare costs.
In light of the Ukraine war and other geopolitical events and dynamics, including ongoing tensions with North Korea, Iran and other states, state-sponsored parties or their supporters may launch retaliatory cyberattacks or carry out other geopolitically motivated retaliatory actions that may adversely disrupt or degrade our operations and may result in data compromise.
In light of geopolitical events and dynamics, including the ongoing war in Ukraine, the war in the Middle East, tensions with North Korea, Iran and other states, state-sponsored parties or their supporters may launch retaliatory cyberattacks or carry out other geopolitically motivated retaliatory actions that may adversely disrupt or degrade our operations and may result in data compromise.
Should one or more of our significant payors declare bankruptcy, be declared insolvent or otherwise be restricted by state or federal laws or regulation from continuing in some or all of their operations, such payor may be unable to reimburse us for expenses incurred in managing patient care, and the members such payor attributes to our platform could transition to another payor who is not on our platform, which could have a material adverse effect on our business, financial condition, cash flows, and results of operations.
Should one or more of our significant payors declare bankruptcy, be declared insolvent or otherwise be restricted by state or federal laws or regulation from continuing in some or all of their operations, such payor 29 Table of Contents may be unable to reimburse us for expenses incurred in managing patient care, and the members such payor attributes to our platform could transition to another payor who is not on our platform, which could have a material adverse effect on our business, financial condition, cash flows, and results of operations.
Medicare Managed Care marketing requirements are outlined in the Medicare Marketing Guidelines, a sub-regulatory guidance document updated annually. CMS has oversight over all MA marketing materials and outreach activities. To maintain appropriate beneficiary safeguards while not impeding the physician-patient relationship, the Medicare Marketing Guidelines set forth acceptable activities in the healthcare setting.
Medicare Managed Care marketing requirements are outlined in the Medicare Marketing Guidelines, a sub-regulatory guidance document updated periodically. CMS has oversight over all MA marketing materials and outreach activities. To maintain appropriate beneficiary safeguards while not impeding the physician-patient relationship, the Medicare Marketing Guidelines set forth acceptable activities in the healthcare setting.
To the extent we or providers in our network fail to submit diagnosis data underlying our members’ existing disease condition, we may receive less medical services revenue than is necessary to provide healthcare services for such members. Furthermore, we project our medical services revenue in part based upon the data submitted and expected to be submitted to CMS.
To the extent we or providers in our network fail to submit diagnosis data underlying our members’ existing disease conditions, we may receive less medical services revenue than is necessary to provide healthcare services for such members. Furthermore, we project our medical services revenue in part based upon the data submitted and expected to be submitted to CMS.
Similarly, if physicians join a physician partner following the initial implementation period for a new partner market and we are unable to manage the integration of such new physician into our Total Care Model, the new physician may not achieve expected improvements in patient outcomes and related profitability.
Similarly, if physicians join as physician partners following the initial implementation period for a new partner market and we are unable to manage the integration of such new physician partners into our Total Care Model, the new physician partners may not achieve expected improvements in patient outcomes and related profitability.
Payments of dividends, if any, are at the sole discretion of the Board after taking into account various factors, including general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications of the payment of dividends by us to our stockholders or by our subsidiaries to us, 47 Table of Contents and such other factors as the Board may deem relevant.
Payments of dividends, if any, are at the sole discretion of the Board after taking into account various factors, including general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications of the payment of dividends by us to our stockholders or by our subsidiaries to us, and such other factors as the Board may deem relevant.
Certain failures by our physician partners to comply with these laws could have an adverse effect on us. We do not directly employ or control our physician partners, and accordingly any adverse effects on us regarding their noncompliance are uncertain and unpredictable.
Certain failures by our physician partners to comply with these laws could have an adverse effect on us. We do not directly employ or control our physician partners, and accordingly any adverse effects on us regarding their noncompliance are out of our control and are uncertain and unpredictable.
The final impact of the MA rates can vary from any estimate we may have and may be further impacted by the relative growth of our MA patient volumes across markets as well as by the benefit plan designs submitted by the health plans.
The final impact of the MA rates can vary from any estimate we, or the market may have and may be further impacted by the relative growth of our MA patient volumes across markets as well as by the benefit plan designs submitted by the health plans.
Although HIPAA does not itself provide a private right of action, it is commonly cited in consumer actions that allege improper use and disclosure of sensitive patient data: use of tracking technologies, such as cookies, web beacons, and pixels, by covered entities or their business associates has recently been subject to class action lawsuits alleging improper disclosure of patient information.
Although HIPAA does not itself provide a private right of action, it is commonly cited in consumer actions that allege improper use and disclosure of sensitive patient data: use of tracking technologies, such as cookies, web beacons, and pixels, by covered entities or their business associates has recently been subject to class action lawsuits alleging improper disclosure of patient 44 Table of Contents information.
Examples of currently known data security threats facing us and our third-party service providers include, but are not limited to, ransomware, phishing, business email compromise and 26 Table of Contents credential stuffing. Additionally, cyber threats and the techniques used in cyberattacks change, develop and evolve rapidly, including from emerging technologies, such as advanced forms of AI and quantum computing.
Examples of currently known data security threats facing us and our third-party service providers include, but are not limited to, ransomware, phishing, business email compromise and credential stuffing. Additionally, cyber threats and the techniques used in cyberattacks change, develop and evolve rapidly, including from emerging technologies, such as advanced forms of AI and quantum computing.
If we are not eligible for quality bonuses or if we contract with payors who experience a reduction in their STAR ratings, we may experience a negative impact on our revenues, which could materially and adversely affect the marketability of our platform, partnership and network model to physicians, our membership levels and our business, financial condition, cash flows, and results of operations.
If we are not eligible for quality bonuses or if we contract with payors who experience a reduction in their STAR ratings, we may experience a negative impact on our revenues, which could materially and 36 Table of Contents adversely affect the marketability of our platform, partnership and network model to physicians, our membership levels and our business, financial condition, cash flows, and results of operations.
If any diagnosis information or encounter data are inaccurate or incorrect, claims or encounter data submissions to payors may not be compliant, resulting in potential overpayments, possible recoupments and possible liability under the federal FCA or through RADV audits.
If any diagnosis information or encounter data is inaccurate or incorrect, claims or encounter data submissions to payors may not be compliant, resulting in potential overpayments, possible recoupments and possible liability under the federal FCA or through RADV audits.
Although these provisions are designed to resolve conflicts between us and CD&R and its affiliates fairly, conflicts may not be resolved in our favor or be resolved at all. 46 Table of Contents Anti-takeover provisions in our Certificate of Incorporation and By-laws could discourage, delay or prevent a change of control of our company and may affect the trading price of our common stock.
Although these provisions are designed to resolve conflicts between us and CD&R and its affiliates fairly, conflicts may not be resolved in our favor or be resolved at all. Anti-takeover provisions in our Certificate of Incorporation and By-laws could discourage, delay or prevent a change of control of our company and may affect the trading price of our common stock.
We rely on third-party internet infrastructure and bandwidth providers for our operations, and any failure or interruption in the services provided by these third parties could negatively impact our ability to operate and our relationships with members and physician partners and adversely affect our business, financial condition, cash flows, and results of operations.
Any failure or interruption in the services provided by these third parties could negatively impact our ability to operate, relationships with members and physician partners and adversely affect our business, financial condition, cash flows, and results of operations. 33 Table of Contents We rely on third-party internet infrastructure and bandwidth providers for our operations, and any failure or interruption in the services provided by these third parties could negatively impact our ability to operate and our relationships with members and physician partners and adversely affect our business, financial condition, cash flows, and results of operations.
Even 42 Table of Contents an unsuccessful challenge by regulatory authorities could result in adverse publicity and could require a costly response. Additionally, on December 1, 2022, HHS OCR issued guidance on the use of tracking technologies on websites and mobile applications, indicating that certain information collected from websites and applications may implicate HIPAA.
Even an unsuccessful challenge by regulatory authorities could result in adverse publicity and could require a costly response. Additionally, on December 1, 2022, HHS OCR issued guidance on the use of tracking technologies on websites and mobile applications, indicating that certain information collected from websites and applications may implicate HIPAA.
These and other healthcare laws and regulations that may affect us are further described in “Business—Healthcare and Other Applicable Regulatory Matters” in Item 1 of this Report. The laws and regulations applicable to our business are complex, changing and often subject to varying interpretations. Additionally, in its June 2024 decision in Loper Bright Enterprises v.
These and other healthcare laws and regulations that may affect us are further described in “Business—Healthcare and Other Applicable Regulatory Matters” in Item 1 of this Report. 40 Table of Contents The laws and regulations applicable to our business are complex, changing and often subject to varying interpretations. Additionally, in its June 2024 decision in Loper Bright Enterprises v.
However, we do not employ or control our physician partners, and accordingly any adverse effects on us regarding their noncompliance with documentation requirements are uncertain and unpredictable.
However, we do not employ or control our physician partners, and accordingly any adverse effects on us regarding their noncompliance with documentation requirements are out of our control and are uncertain and unpredictable.
Our contracts with payors generally have terms of one to three years and are typically renewed for one-year periods unless terminated in accordance with the terms of such agreements. In the ordinary course of business, we engage in active discussions and renegotiations with our payors with respect of the services we collectively provide and the terms of our payor agreements.
Our contracts with payors generally have terms of one to three years and are typically renewed for varying periods unless terminated in accordance with the terms of such agreements. In the ordinary course of business, we engage in active discussions and renegotiations with our payors with respect to the services we collectively provide and the provisions of our payor agreements.
In some cases, payors and regulatory bodies have required us to contribute a material amount of risk-bearing capital to our local operating subsidiaries in the form of letters of credit or restricted deposits, and we expect that payors and regulatory bodies will continue to require us to contribute risk-bearing capital going forward.
In some cases, payors and regulatory bodies have required us to contribute a material amount of risk-bearing capital to our local operating subsidiaries in the form of letters of credit or restricted deposits, and we expect that payors and regulatory bodies will continue to require us to contribute risk-bearing capital 38 Table of Contents going forward.
If we fail to realize quality of care outcomes and projected revenues or cost savings due to effectively managed healthcare costs with these program initiatives, our business, financial condition, cash flows, and results of operations could be materially adversely affected.
If we fail to realize quality of care outcomes and projected revenues or cost savings 23 Table of Contents due to effectively managed healthcare costs with these program initiatives, our business, financial condition, cash flows, and results of operations could be materially adversely affected.
For example, the CMS Innovation Center has created the ACO REACH Model to allow a variety of different organizations called ACOs to negotiate directly with the government to manage traditional Medicare beneficiaries and share in the savings and losses generated from managing such beneficiaries.
For example, the CMS Innovation Center has created the ACO REACH Model to allow a variety of different organizations called ACOs to negotiate directly with the government to 37 Table of Contents manage traditional Medicare beneficiaries and share in the savings and losses generated from managing such beneficiaries.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our financial conditions and results of operations; • the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, results of operations, or capital commitments; • changes in stock market valuations and operating performance of other healthcare and technology companies generally, or those in our industry in particular; and • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole.
The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including, but not limited to: • actual or anticipated fluctuations in our financial conditions and results of operations; • the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, results of operations, or capital commitments; • general economic, industry, political, and market conditions; • changes in stock market valuations and operating performance of other healthcare and technology companies generally, or those in our industry in particular; and • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole.
Further, our physician partners may not engage with our platform 29 Table of Contents sufficiently to assist in improving overall quality of care and management of healthcare costs, which could produce results that are inconsistent with our estimates and financial models and negatively impact our growth.
Further, our physician partners may not engage with our platform sufficiently to assist in improving overall quality of care and management of healthcare costs, which could produce results that are inconsistent with our estimates and financial models and negatively impact our growth.
Such a restructuring may not be feasible or acceptable to our partners and may not be accomplished within a reasonable time frame or on reasonable terms, any of which could have a material adverse effect on our business, financial condition, cash flows, and results of operations.
Such a restructuring may not be feasible or acceptable to our partners and may not be accomplished within a reasonable time frame or on reasonable terms, any of which could have a material adverse effect 45 Table of Contents on our business, financial condition, cash flows, and results of operations.
Such adverse macroeconomic conditions may also affect our physician partners’ or payors’ operations and financial condition, which may in turn cause our physician partners or payors to elect not to renew their services agreements or affect their ability to pay amounts owed to us in a timely manner or at all, or adversely affect prospective partners’ or payors’ ability or willingness to enter into services agreements with us.
Such adverse macroeconomic conditions may also affect our physician partners’ or payors’ operations and financial condition, which may in turn cause our physician partners or payors to elect not to renew their services agreements or affect their ability to pay amounts owed to us in a 35 Table of Contents timely manner or at all, or adversely affect prospective physician partners’ or payors’ ability or willingness to enter into services agreements with us.
If our subsidiaries suffer losses due to their lack of performance, our physician partners’ failure to perform under their contracts or other reasons, we may be required to fund such losses or our subsidiaries may be subject to 27 Table of Contents allegations of breach of their payor contracts or may incur regulatory consequences.
If our subsidiaries suffer losses due to their lack of performance, our physician partners’ failure to perform under their contracts or other reasons, we may be required to fund such losses or our subsidiaries may be subject to allegations of breach of their payor contracts or may incur regulatory consequences.
We cannot predict changes to these programs, and we may be unable to adapt our business to such changes, either at all or in relation to our competitors. On an annual basis, CMS issues a final rule to establish the MA county-level benchmark payment rates for the following calendar year.
We cannot predict changes to these programs, and we may be unable to adapt our business to such changes, either at all or in relation to our competitors. 34 Table of Contents On an annual basis, CMS issues a final rule to establish the MA county-level benchmark payment rates for the following calendar year.
It is possible that the licenses and rights necessary to use the software and data necessary for the provision of our services may not continue to be available on commercially reasonable terms, or at all, or that our use of such software or 31 Table of Contents data may be restricted.
It is possible that the licenses and rights necessary to use the software and data necessary for the provision of our services may not continue to be available on commercially reasonable terms, or at all, or that our use of such software or data may be restricted.
We may also be subject to other types of lawsuits, inquiries, audits, investigations or other proceedings, such as those initiated by our competitors, stockholders, employees, service providers, contractors or by government agencies, including when we terminate relationships with them, which could involve large claims and significant defense costs.
We have also been subject to other types of lawsuits, inquiries, audits, investigations or other proceedings, such as those initiated by our competitors, stockholders, employees, service providers, contractors or by government agencies, including when we terminate relationships with them, which could involve large claims and significant defense costs.
Factors that could contribute to a reduction in membership include: • failure to obtain new physician partners or members or to retain existing physician partners or members; • decision by a payor not to renew the existing contractual agreement upon termination of such contract; • low quality of care by our physician partners, including as a result of our failure to provide sufficient implementation in our Total Care Model, tools and information to deliver high-quality care; • alternative care opportunities that are more attractive than those provided by our physician partners; • premium increases, benefit revisions or other similar changes, which cause our current payor relationships to be less attractive to members than other alternatives, including traditional Medicare or MA plans with which we do not maintain a relationship; • negative publicity, through social media, news coverage or otherwise, related to us, our physician partners, payors or MA; • failure of our payors to maintain their annual ratings awarded by CMS to health plans which measure the quality of health services received by beneficiaries enrolled in MA based on various calculated quality metrics (“STAR ratings”), which leads to members disenrolling from such payors; and • federal and state regulatory changes.
Factors that could contribute to a reduction in membership include, but are not limited to: • failure to obtain new physician partners or members or to retain existing physician partners or members; • changes to member benefit types, categories, and levels established and otherwise offered by payors; • decision by a payor not to renew the existing contractual agreement upon termination of such contract; • low quality of care by our physician partners, including as a result of our failure to provide sufficient implementation in our Total Care Model, tools and information to deliver high-quality care; • alternative care opportunities that are more attractive than those provided by our physician partners; • premium increases, benefit revisions or other similar changes, which cause our current payor relationships to be less attractive to members than other alternatives, including traditional Medicare or MA plans with which we do not maintain a relationship; • negative publicity, through social media, news coverage or otherwise, related to us, our physician partners, payors or MA; 24 Table of Contents • failure of our payors to maintain their annual ratings awarded by CMS to health plans which measure the quality of health services received by beneficiaries enrolled in MA based on various calculated quality metrics (“STAR ratings”), which leads to members disenrolling from such payors; and • federal and state regulatory changes.
Our revenues could be further reduced by budget reconciliation bills, which could increase the MA coding intensity adjustment. 37 Table of Contents Negative publicity regarding the managed healthcare industry generally could adversely affect our results of operations or business.
Our revenues could be further reduced by budget reconciliation bills, which could increase the MA coding intensity adjustment. Negative publicity regarding the managed healthcare industry generally could adversely affect our results of operations or business.
Such alignment is often achieved through the design of risk or other incentive pools, with gating quality metrics that participating physicians must first satisfy before being allowed to share in cost savings.
Such alignment is often achieved through the design of risk or other incentive pools, with gating quality metrics that participating physician partners must first satisfy before being allowed to share in cost savings.
We may also fail to address factors within our control that could contribute to a reduction in enrollment, including providing our physician partners with sufficient implementation in our Total Care Model, as well as other tools and information to provide high-quality care. 23 Table of Contents The transition to a Total Care Model may be challenging for physician partners.
We may also fail to address factors within our control that could contribute to a reduction in enrollment, including providing our physician partners with sufficient implementation in our Total Care Model, as well as other tools and information to provide high-quality care. The transition to a Total Care Model may be challenging for physician partners.
We may be held liable for inaccuracies or deficiencies in the submitted encounter data and potentially could be subject to financial penalties imposed by government authorities and breach of contract claims by payors.
We may be held liable for inaccuracies or deficiencies in the submitted encounter data and potentially 31 Table of Contents could be subject to financial penalties imposed by government authorities and breach of contract claims by payors.
Our insurance coverages generally must be renewed annually and may not continue to be available to us in future years at acceptable costs and on favorable terms, which could increase our exposure to litigation. Further, such coverage typically has substantial deductibles for which we would be responsible.
Our 51 Table of Contents insurance coverages generally must be renewed annually and may not continue to be available to us in future years at acceptable costs and on favorable terms, which could increase our exposure to litigation. Further, such coverage typically has substantial deductibles for which we would be responsible.
Any contracts with restrictive provisions may limit our ability to conduct business with certain potential partners, including partnering with or providing services to other physicians or purchasing services from other physicians within certain time periods, and in certain regions.
Any contracts with restrictive provisions may limit our ability to conduct business with certain potential physician partners, including partnering with or providing services to other physicians or purchasing services from other physicians within certain time periods, and in certain geographies.
Such factors include the following: • changes to the Medicare fee schedule or other rate schedules that serve as the basis for payments issued to hospitals, specialty and ancillary physicians and other providers; • contractual rates paid to hospitals, specialty and ancillary physicians and other providers; 21 Table of Contents • the utilization rates of healthcare services, including inpatient hospitalization, outpatient procedures, high risk and chronic conditions and other services that result in medical expenses, by our members; • changes to member benefit types, categories, and levels established and otherwise offered by payors; and • the utilization rate and cost of pharmaceuticals or specialty drugs utilized by our members.
Such factors include, but are not limited to, the following: • changes to the Medicare fee schedule or other rate schedules that serve as the basis for payments issued to hospitals, specialty and ancillary physicians and other providers; • contractual rates paid to hospitals, specialty and ancillary physicians and other providers; • the utilization rates of healthcare services, including inpatient hospitalization, outpatient procedures, high risk and chronic conditions and other services that result in medical expenses, by our members; • changes to member benefit types, categories, and levels established and otherwise offered by payors; and • the utilization rate and cost of pharmaceuticals or specialty drugs utilized by our members.
Reimbursement is conditioned upon, in part, physician partners providing the correct procedure and 30 Table of Contents diagnosis codes and properly documenting the services themselves, including the level of service provided and the medical necessity for the services.
Reimbursement is conditioned upon, in part, physician partners providing the correct procedure and diagnosis codes and properly documenting the services themselves, including the level of service provided and the medical necessity for the services.
If we are subject to an audit or investigation, a finding could be made that we have violated 36 Table of Contents relevant state or federal legal standards in our operations or in how we have structured our arrangements and relationships or that we or our affiliates have erroneously billed or were incorrectly reimbursed.
If we are subject to an audit or investigation, a finding could be made that we have violated relevant state or federal legal standards in our operations or in how we have structured our arrangements and relationships or that we or our affiliates have erroneously billed or were incorrectly reimbursed.
See the section titled “Business—Healthcare and Other Applicable Regulatory Matters—Federal and State Anti-Kickback Statutes” and “Business—Healthcare and Other Applicable Regulatory Matters—Civil Monetary Penalties Statute” in Item 1 of this Report.
See the section titled “Business—Healthcare and Other Applicable Regulatory Matters—Federal and State Anti-Kickback Statutes” and “Business—Healthcare and Other Applicable Regulatory Matters—Civil Monetary Penalties Statute” in Item 42 Table of Contents 1 of this Report.
If our subsidiaries are in compliance with certain coverage ratios set forth in the agreements governing the Credit Facility, they may be able to incur substantial 44 Table of Contents additional indebtedness, which could increase the risks created by our current indebtedness.
If our subsidiaries are in compliance with certain coverage ratios set forth in the agreements governing the Credit Facility, they may be able to incur substantial additional indebtedness, which could increase the risks created by our current indebtedness.
Historically, government budget limitations have resulted in reduced spending. The existing federal deficit and continued deficit spending by the federal government and significant economic pressure on state budgets have the potential to lead to reduced government expenditures, including for government-funded programs in which we participate such as Medicare.
The existing federal deficit and continued deficit spending by the federal government and significant economic pressure on state budgets have the potential to lead to reduced government expenditures, including for government-funded programs in which we participate such as Medicare.
The general legal trend in the data privacy and security area is toward the broader adoption of more stringent laws and toward more aggressive enforcement. The data privacy and security measures we have implemented may not adequately protect us from the risks associated with the storage and transmission of customer information and PHI.
The general legal trend in the data privacy and security area is toward the broader adoption of more stringent laws and toward more aggressive enforcement. The data privacy and security measures we and our third-party service providers have implemented may not adequately protect us from the risks associated with the storage and transmission of customer information and PHI.
As a young and rapidly growing company, 20 Table of Contents we may be unfamiliar with the regulatory requirements in each geography that we enter, and we may be forced to incur significant expenditures to ensure compliance with requirements to which we may become subject.
As a young and rapidly growing company, we may be unfamiliar with the regulatory requirements in each geography that we enter, and we may be forced to incur significant expenditures to ensure compliance with requirements to which we may become subject.
If we are found in violation of applicable laws or regulations, we could suffer severe consequences that would have a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and stock price, including: • suspension or termination of our participation in federal or state health care programs; • criminal or civil liability, fines, damages or monetary penalties for violations of healthcare fraud and abuse laws, including the federal FCA, Healthcare Fraud Statutes, CMPL, Anti-Kickback Statute and Stark Law; • enforcement actions by governmental agencies or claims for monetary damages by patients under federal or state patient privacy laws, including HIPAA; • enforcement actions by governmental agencies or monetary penalties for violations of the 21 st Century Cures Act; • repayment of amounts received in violation of law or applicable payment program requirements, and related monetary penalties; • mandated changes to our practices or procedures that materially increase operating expenses; • imposition of corporate integrity agreements that could subject us to ongoing audits and reporting requirements as well as increased scrutiny of our billing and business practices; • termination of various relationships or contracts related to our business; and • harm to our reputation which could negatively affect our business relationships, decrease our ability to attract or retain patients and physicians, decrease access to new business opportunities and impact our ability to obtain financing, among other things. 39 Table of Contents Responding to lawsuits and other proceedings as well as defending ourselves in such matters may require management’s attention and cause us to incur significant legal expense.
If we are found in violation of applicable laws or regulations, we could suffer severe consequences that would have a material adverse effect on our business, results of operations, financial condition, cash flows, reputation and stock price, including: • suspension or termination of our participation in federal or state health care programs; • criminal or civil liability, fines, damages or monetary penalties for violations of healthcare fraud and abuse laws, including the federal FCA, Healthcare Fraud Statutes, CMPL, Anti-Kickback Statute and Stark Law; • enforcement actions by governmental agencies or claims for monetary damages by patients under federal or state patient privacy laws, including HIPAA; • enforcement actions by governmental agencies or monetary penalties for violations of the 21 st Century Cures Act; • repayment of amounts received in violation of law or applicable payment program requirements, and related monetary penalties; • mandated changes to our practices or procedures that materially increase operating expenses; • imposition of corporate integrity agreements that could subject us to ongoing audits and reporting requirements as well as increased scrutiny of our billing and business practices; • termination of various relationships or contracts related to our business; and • harm to our reputation which could negatively affect our business relationships, decrease our ability to attract or retain patients and physicians, decrease access to new business opportunities and impact our ability to obtain financing, among other things.
Our medical services expense may exceed our or our payors’ estimates, which may result in our establishing unfavorable financial terms in our contractual agreements with our payors, or may result in our payors’ actuarial projections submitted to CMS being inaccurate.
Our medical services expense may exceed our or our payors’ estimates, which may result in our establishing unfavorable financial terms in our contractual agreements with our payors, 25 Table of Contents or may result in our payors’ actuarial projections submitted to CMS being inaccurate.
Our physician partners may encounter difficulties in recruiting additional PCPs to their practices due to many factors, including significant competition in their geographies.
Our physician partners may encounter difficulties in recruiting additional PCPs to their practices due to many factors, including, but not limited to, significant competition in their geographies.
If our cash and cash equivalents and any cash generated from operations are not 22 Table of Contents sufficient to meet our future cash requirements, we will need to access additional capital to fund our operations and our continued growth and expansion.
If our cash and cash equivalents and any cash generated from operations are not sufficient to meet our future cash requirements, we will need to access additional capital to fund our operations and our continued growth and expansion.
For example, payors may not allow contracted physicians to accept/collect scope of appointment forms but may allow contracted physicians to make available communication materials regarding MA plans in areas where care is being delivered. Notably, the 2024 Final Rule includes, among other things, significant new MA marketing requirements for agent and broker compensation.
For example, payors may not allow contracted physicians to accept/collect scope of appointment forms but may allow contracted physicians to make available communication materials regarding MA plans outside of areas where care is being delivered. Notably, the 2024 Final Rule (for the 2025 plan year) included, among other things, significant new MA marketing requirements for agent and broker compensation.
State-sponsored parties have, and will continue, to conduct cyberattacks to achieve their goals that may include espionage, monetary gain, disruption, and destruction. We are subject to cybersecurity attacks and may experience cybersecurity incidents in the future.
State-sponsored parties have, and will continue, to conduct cyberattacks to achieve their goals that may include espionage, monetary gain, disruption, and destruction. We, and our third-party service providers, are subject to cybersecurity attacks and may experience cybersecurity incidents in the future.
Some of the states in which we operate limit the practice of medicine to licensed individuals or professional organizations comprising licensed individuals, and lay business corporations generally may not exercise control over the medical decisions of physicians.
As a corporate entity, we are not licensed to practice medicine. Some of the states in which we operate limit the practice of medicine to licensed individuals or professional organizations comprising licensed individuals, and lay business corporations generally may not exercise control over the medical decisions of physicians.
A health plan may seek repayment from us should CMS make any payment adjustments as a result of its audits or hold us liable for any penalties owed to CMS for inaccurate or unsupportable RAF scores provided by us or our affiliated physicians.
A health plan may seek repayment from us as a result of the health plan’s audit or should CMS make any payment adjustments as a result of its audits or hold us liable for any penalties owed to CMS for inaccurate or unsupportable RAF scores provided by us or our affiliated physician partners.
CMS finalized these changes to reduce the aggressive marketing practices. In addition, through our participation in the CMS ACO REACH Model, we (either as an ACO or as a service provider to our physician partners who are participating in the model) must comply with provisions in the participation agreements with CMS regarding marketing and outreach activities.
In addition, through our participation in the CMS ACO REACH Model, we (either as an ACO or as a service provider to our physician partners who are participating in the model) must comply with provisions in the participation agreements with CMS regarding marketing and outreach activities.
As a result, such data security breaches could result in the loss of data or inappropriate use of information.
As a result, such data security breaches could result in the loss of data or inappropriate use of such sensitive and/or confidential information.
To the extent we are unsuccessful in establishing contractual relationships with MA payors in new geographies, or such relationships are established at less favorable terms than we project, we may not be able to successfully launch into a given geography, or the membership or revenue levels we are able to attain will be lower than our projections.
To the extent we are unsuccessful in establishing contractual relationships with MA payors in new geographies, or such relationships are established at less favorable terms than we project, we may not be able to successfully launch into a given geography, or the membership or revenue levels we are able to attain will be lower than our projections, which could impact our ability to meet our estimated financial targets.
Because the ACO REACH Model is a new and evolving program, we are unable to determine how the ACO REACH Model, or other alternative payment models promulgated by the CMS Innovation Center, will affect Medicare reimbursement and capitation benchmarks.
Because the ACO REACH Model is an evolving program, we are unable to determine how the ACO REACH Model, or other alternative payment models promulgated by the CMS Innovation Center, such as the LEAD Model, will affect Medicare reimbursement and capitation benchmarks.
(“agilon management”) and its subsidiaries to: • incur additional indebtedness and create liens; • pay dividends and make other distributions or to purchase, redeem or retire capital stock; • purchase, redeem or retire certain junior indebtedness; • make loans and investments; • enter into agreements that limit agilon management’s or its subsidiaries’ ability to pledge assets or to make distributions or loans to us or transfer assets to us; • sell assets; • enter into certain types of transactions with affiliates; • consolidate, merge or sell substantially all assets; • make voluntary payments or modifications of junior indebtedness; and • enter into lines of business. agilon management and its subsidiaries account for substantially all of our assets and total liabilities.
(“agilon management”) and its subsidiaries to: • incur additional indebtedness and create liens; • pay dividends and make other distributions or to purchase, redeem or retire capital stock; • purchase, redeem or retire certain junior indebtedness; • make loans and investments; • enter into agreements that limit agilon management’s, or its subsidiaries’ ability to pledge assets or to make distributions or loans to us or transfer assets to us; • sell assets; • enter into certain types of transactions with affiliates; • consolidate, merge or sell substantially all assets; • make voluntary payments or modifications of junior indebtedness; • enter into lines of business; and • maintain less than $50.0 million of cash and cash equivalents at the end of each business day. agilon management and its subsidiaries account for substantially all of our assets and total liabilities.
It is possible that we may underestimate the impact of the changes in MA rates on our business, which could have a material adverse effect on our business, financial condition, cash flows, and results of operations.
We have in the past and may in the future underestimate the impact of the changes in MA rates on our business, which could have a material adverse effect on our business, financial condition, cash flows, and results of operations.
In the event we need access to additional capital to pay our operating expenses, fund subsidiary surplus requirements, make payments on or refinance our indebtedness, pay capital expenditures, or fund acquisitions, our ability to obtain such capital may be limited and the cost of any such capital may be significant, particularly if we are unable to access our credit facility agreement (as amended by the First Amendment to Credit Agreement, dated as of March 1, 2021 and the Second Amendment to Credit Agreement, dated as of May 25, 2023, the “Credit Facility”).
In the event we need access to additional capital to pay our operating expenses, fund subsidiary surplus requirements, make payments on or refinance our indebtedness, pay capital expenditures, or fund acquisitions, our ability to obtain such capital on favorable terms, within an acceptable timeframe, or at all may be limited and the cost of any such capital may be significant, particularly if we are unable to access our credit facility agreement, dated February 18, 2021, (as amended by the First Amendment to Credit Agreement, dated as of March 1, 2021, the Second Amendment to Credit Agreement, dated as of May 25, 2023, and the Third Amendment to Credit Agreement, dated as of February 12, 2026, the “Credit Facility”).
If our payors do not timely and accurately process claims and reimburse us for all covered members, are unable to contract with providers at market-based rates, change their utilization management methodologies, or are unable to secure an adequate network of specialists, our business, financial condition, cash flows, and results of operations could be adversely impacted.
If our payors do not timely and accurately process claims and reimburse us for all covered members, are unable to contract with providers at market-based rates, change their utilization management methodologies, or are unable to secure an adequate network of specialists, our business, financial condition, cash flows, and results of operations could be adversely impacted, particularly where we lack the ability to directly control or promptly remediate such issues.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe results of such assessments, audits and reviews are reported to senior management and the Board, and we adjust our cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits, and reviews. 50 Table of Contents The risks from cybersecurity threats have not to date materially affected us or are not reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.
Biggest changeThe results of such assessments, audits and reviews are reported to senior management and the Board, and we adjust our cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits, and reviews.
As discussed in more detail below under “Board Oversight of Cybersecurity Risks,” the Board’s oversight of cybersecurity risk management is supported by the Audit Committee and Compliance and Quality Committee, each of which regularly interacts with the Company’s enterprise risk management function, our Chief Technology Officer (“CTO”), Chief Information Security Officer (“CISO”), Chief Legal Officer (“CLO”), and Chief Ethics, Compliance and Risk Officer together with other members of management with responsibility for risk management and cybersecurity. • Collaborative Approach.
As discussed in more detail below under “Board Oversight of Cybersecurity Risks,” the Board’s oversight of cybersecurity risk management is supported by the Audit Committee and Compliance and Quality Committee, each of which regularly interacts with the Company’s enterprise risk management function, our Chief Technology Officer (“CTO”), Chief Information Security Officer (“CISO”), Chief Legal Officer (“CLO”), and Chief Ethics, Compliance and Risk Officer (“CCO”) together with other members of management with responsibility for risk management and cybersecurity. • Collaborative Approach.
Our CTO and CISO have a combined over 50 years of experience in managing large company technology operations and extensive expertise in the management of cybersecurity defense. 51 Table of Contents • The CTO holds an undergraduate degree in computer science and a master’s degree in business administration and has served in various roles in information technology for over 27 years, including serving as either the Chief Technology Officer or Chief Information Officer of large companies.
Our CTO and CISO have a combined over 50 years of experience in managing large company technology operations and extensive expertise in the management of cybersecurity defense. • The CTO holds an undergraduate degree in computer science and a master’s degree in business administration and has served in various roles in information technology for over 27 years, including serving as either the Chief Technology Officer or Chief Information Officer of large companies.
The CISO holds a CISSP certification and spent several years in law enforcement addressing computer crimes. • Our technology group management uses numerous processes to become informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents. Management regularly reviews the Company’s cybersecurity risk management program with the Board, Audit Committee and Compliance and Quality Committee.
The CISO holds a CISSP certification and spent several years in law enforcement addressing computer crimes. • Our technology group management uses numerous processes to become informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents. 54 Table of Contents Management regularly reviews the Company’s cybersecurity risk management program with the Board, Audit Committee, and Compliance and Quality Committee.
We have implemented a cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. 49 Table of Contents • Technical Safeguards.
We have implemented a cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. • Technical Safeguards.
Cyber Governance Board Oversight of Cybersecurity Risks . The Board is actively involved in oversight of the Company’s risk management program, and cybersecurity represents an important component of our overall approach to enterprise risk management.
The Board is actively involved in oversight of the Company’s risk management program, and cybersecurity represents an important component of our overall approach to enterprise risk management.
Refer to the risk factor titled “ Security breaches, cybersecurity attacks, loss of data and other disruptions to our information systems could compromise sensitive information related to our business and expose us to liability, which could adversely affect our operations, financial condition, cash flows and results of operation ” in Item 1A of this Report for additional information about the risks associated with cybersecurity threats.
Refer to the risk factor titled “ Security breaches, cybersecurity attacks, loss of data and other disruptions to our information systems could compromise sensitive information related to our business and expose us to liability, which could adversely affect our operations, financial condition, cash flows and results of operation ” in Item 1A of this Report for additional information about the risks associated with cybersecurity threats. 53 Table of Contents Cyber Governance Board Oversight of Cybersecurity Risks .
We provide regular, mandatory training for personnel regarding cybersecurity threats to equip our personnel with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices. Cybersecurity Processes and Risks.
We provide regular, mandatory training for personnel regarding cybersecurity threats to equip our personnel with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices. 52 Table of Contents Cybersecurity Processes and Risks.
Added
The risks from cybersecurity threats have not to date materially affected us or are not reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. Properties As of December 31, 2024, we leased approximately 105,800 gross square feet relating to 16 office facilities. We believe our facilities are adequate and suitable for our current needs and that should it be needed, suitable additional or alternative space will be available to accommodate our operations. ITEM 3.
Biggest changeITEM 2. Properties As of December 31, 2025, we leased approximately 72,000 gross square feet relating to 13 office facilities. We believe our facilities are adequate and suitable for our current needs and that should it be needed, suitable additional or alternative space will be available to accommodate our operations. ITEM 3.
Legal Proceedings See “Legal Proceedings” section of Note 12 to the Consolidated Financial Statements for information regarding legal proceedings, which information is incorporated by reference in this Item 3. ITEM 4. Mine Safety Disclosures Not applicable. 52 Table of Contents PART II
Legal Proceedings See “Legal Proceedings” section of Note 11 to the Consolidated Financial Statements for information regarding legal proceedings, which information is incorporated by reference in this Item 3. ITEM 4. Mine Safety Disclosures Not applicable. 55 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+3 added−6 removed5 unchanged
Biggest changeThe shares of common stock issued are subject to appropriate restrictive legends and the physician partner entities represented they would not transfer or distribute the common stock until all restrictions were cleared. All recipients had access, through their relationships with us or otherwise, to adequate information about us.
Biggest changeThese transactions did not involve any public offering, any underwriters, any underwriting discounts or commissions, or any general solicitation or advertising. The shares of common stock issued are subject to appropriate restrictive legends and the physician partner entities represented they would not transfer or distribute the common stock until all restrictions were cleared.
Total cumulative return is based on a $100 investment and assumes reinvestment of dividends before consideration of income taxes. Stockholder returns over the indicated periods should not be considered indicative of future stock prices or stockholder returns.
Total cumulative return is based on a $100 investment and assumes reinvestment of dividends before consideration of 56 Table of Contents income taxes. Stockholder returns over the indicated periods should not be considered indicative of future stock prices or stockholder returns.
Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities Unregistered Sales of Equity Securities Certain of our agreements with our physician partner entities provide for grants of time-vested restricted stock units and performance stock units (collectively, “RSUs”) to the physician partner entities.
Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities Unregistered Sales of Equity Securities Certain of our agreements with our physician partner entities provide for grants of time-vested restricted stock units to the physician partner entities.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN RATE OF RETURN TREND COMPARISON April 15, 2021–December 31, 2024 (April 15, 2021 = $100) Performance Graph Total Stockholder Return 4/15/21 12/31/21 12/31/22 12/31/23 12/31/24 agilon health, inc. $ 100 $ 117 $ 70 $ 55 $ 8 S&P 500 100 117 96 121 151 S&P 500 Health Care 100 120 118 120 124 ITEM 6. [Reserved] 54 Table of Contents
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN RATE OF RETURN TREND COMPARISON April 15, 2021 – December 31, 2025 (April 15, 2021 = $100) Performance Graph Total Stockholder Return 4/15/21 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 agilon health, inc. $ 100 $ 117 $ 70 $ 55 $ 8 $ 3 S&P 500 100 116 93 116 143 166 S&P 500 Health Care 100 119 115 117 116 131 ITEM 6. [Reserved] 57 Table of Contents
Issuer Purchases of Equity Securities There were no repurchases of equity securities during the three months ended December 31, 2024. 53 Table of Contents Performance Graph The graph and table below compare the cumulative total return of agilon, the S&P 500, and the S&P 500 Health Care Index from April 15, 2021 (the date our common stock began trading on the NYSE) to December 31, 2024.
Performance Graph The graph and table below compare the cumulative total return of agilon, the S&P 500, and the S&P 500 Health Care Index from April 15, 2021 (the date our common stock began trading on the NYSE) to December 31, 2025.
Prior to that date, there was no public trading market for our common stock. Holders of Common Stock As of February 21, 2025, we had 749 stockholders of record of common stock.
Prior to that date, there was no public trading market for our common stock.
On November 11, 2024, we issued 98,788 shares of our common stock to our physician partners to settle provider incentive liabilities for a total of $213,382. On December 15, 2024, we issued 114,679 shares of our common stock to our physician partners to settle provider incentive liabilities for a total of $256,881.
On December 15, 2025, we issued 114,679 shares of our common stock to our physician partners to settle provider incentive liabilities for a total of $76,032. The issuances of the common stock were exempt from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities Act.
Removed
On January 11, 2024, January 16, 2024, and January 25, 2024, we issued 8,743, 31,871, and 23,992 shares of our common stock upon vesting of RSUs, respectively, to our physician partners for a total of $447,287.
Added
See the risk factor titled “ The listing of shares of our common stock does not currently comply with the continued listing requirements of the NYSE, and if the NYSE delists our common stock, it could have an adverse impact on the trading, liquidity and market price of our common stock ” in Item 1A.
Removed
On February 7, 2024, we issued 178,402 shares of our common stock upon vesting of RSUs to our physician partners for a total of $1,168,533. On February 15, 2024, we issued 1,973,830 shares of our common stock to our physician partners to settle provider incentive liabilities for a total of $14,330,006.
Added
Risk Factors included in this Report. Holders of Common Stock As of February 19, 2026, we had 716 stockholders of record of common stock.
Removed
On March 14, 2024, we issued 503,326 shares of our common stock upon vesting of RSUs to our physician partners for a total of $2,632,395. On April 4, 2024 and April 11, 2024, we issued 23,992 and 131,801 shares of our common stock upon vesting of RSUs, respectively, to our physician partners for a total of $818,621.
Added
All recipients had access, through their relationships with us or otherwise, to adequate information about us. Issuer Purchases of Equity Securities There were no repurchases of equity securities during the three months ended December 31, 2025.
Removed
On May 19, 2024, we issued 80,092 shares of our common stock to our physician partners to settle provider incentive liabilities for a total of $433,298. On June 16, 2024 and June 24, 2024, we issued 14,401 and 38,958 shares of our common stock upon vesting of RSUs, respectively, to our physician partners for a total of $352,983.
Removed
On September 1, 2024, September 7, 2024, and September 22, 2024, we issued 178,401, 56,255, and 100,222 shares of our common stock upon vesting of RSUs, respectively, to our physician partners for a total of $1,242,706.
Removed
The issuances of the common stock were exempt from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities Act. These transactions did not involve any public offering, any underwriters, any underwriting discounts or commissions, or any general solicitation or advertising.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFor additional discussion, see Note 20 to the Consolidated Financial Statements in Item 8 of this Report. 59 Table of Contents Results of Operations The following table summarizes key components of our results of operations (dollars in thousands): Year Ended December 31, 2024 2023 2022 Revenues: Medical services revenue $ 6,047,715 $ 4,307,350 $ 2,384,889 Other operating revenue 12,815 9,013 3,331 Total revenues 6,060,530 4,316,363 2,388,220 Expenses: Medical services expense 5,842,530 4,008,659 2,093,860 Other medical expenses 213,159 238,034 183,000 General and administrative 268,912 285,760 207,789 Depreciation and amortization 24,463 16,043 8,949 Impairments 3,596 — — Total expenses 6,352,660 4,548,496 2,493,598 Income (loss) from operations (292,130) (232,133) (105,378) Other income (expense): Income (loss) from equity method investments 14,992 16,489 10,720 Other income (expense), net 34,489 27,840 13,930 Gain (loss) on lease terminations — — (5,458) Interest expense (6,177) (6,658) (4,484) Income (loss) before income taxes (248,826) (194,462) (90,670) Income tax benefit (expense) (1,451) (791) (1,640) Income (loss) from continuing operations (250,277) (195,253) (92,310) Discontinued operations: Income (loss) before gain (loss) on sales and income taxes (1,061) (20,002) (14,528) Gain (loss) on sales of assets, net (8,763) (47,548) — Income tax benefit (expense) — — (26) Total discontinued operations (9,824) (67,550) (14,554) Net income (loss) (260,101) (262,803) (106,864) Noncontrolling interests’ share in (earnings) loss (50) 207 311 Net income (loss) attributable to common shares $ (260,151) $ (262,596) $ (106,553) 60 Table of Contents The following table summarizes our results of operations as a percentage of total revenues: Year Ended December 31, 2024 2023 2022 Revenues: Medical services revenue 100 % 100 % 100 % Other operating revenue — — — Total revenues 100 100 100 Expenses: Medical services expense 96 93 88 Other medical expenses 4 6 8 General and administrative 4 7 9 Depreciation and amortization — — — Impairments — — — Total expenses 105 105 104 Income (loss) from operations (5) (5) (4) Other income (expense): Income (loss) from equity method investments — — — Other income (expense), net 1 1 1 Gain (loss) on lease terminations — — — Interest expense — — — Income (loss) before income taxes (4) (5) (4) Income tax benefit (expense) — — — Income (loss) from continuing operations (4) (5) (4) Discontinued operations: Income (loss) before income taxes — — (1) Gain (loss) on sales of assets, net — (1) — Income tax benefit (expense) — — — Total discontinued operations — (2) (1) Net income (loss) (4) (6) (4) Noncontrolling interests’ share in (earnings) loss — — — Net income (loss) attributable to common shares (4) % (6) % (4) % Comparison of Year Ended December 31, 2024 and 2023 Medical Services Revenue Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Medical services revenue $ 6,047,715 $ 4,307,350 $ 1,740,365 40 % % of total revenues 100 % 100 % Medical services revenue increased by $1.74 billion, or 40%, for the year ended December 31, 2024 compared to 2023 due primarily to growth in average membership of 38%, which was attributable to seven new geographies that became operational in 2024 as well as growth in our existing geographies.
Biggest changeFor additional discussion, see Note 19 to the Consolidated Financial Statements in Item 8 of this Report. 62 Table of Contents Results of Operations The following table summarizes key components of our results of operations (dollars in thousands): Year Ended December 31, 2025 2024 2023 Revenues: Medical services revenue $ 5,921,341 $ 6,047,715 $ 4,307,350 Other operating revenue 11,235 12,815 9,013 Total revenues 5,932,576 6,060,530 4,316,363 Expenses: Medical services expense 5,977,906 5,842,530 4,008,659 Other medical expenses 114,691 213,159 238,034 General and administrative 238,536 268,912 285,760 Depreciation and amortization 28,594 24,463 16,043 Impairments 36,085 3,596 — Total expenses 6,395,812 6,352,660 4,548,496 Income (loss) from operations (463,236) (292,130) (232,133) Other income (expense): Income (loss) from equity method investments (1,835) 14,992 16,489 Other income (expense), net 67,616 34,489 27,840 Interest expense (6,641) (6,177) (6,658) Income (loss) before income taxes (404,096) (248,826) (194,462) Income tax benefit (expense) (1,251) (1,451) (791) Income (loss) from continuing operations (405,347) (250,277) (195,253) Discontinued operations: Income (loss) before gain (loss) on sales — (1,061) (20,002) Gain (loss) and adjustments on sales of assets, net 14,000 (8,763) (47,548) Total discontinued operations 14,000 (9,824) (67,550) Net income (loss) (391,347) (260,101) (262,803) Noncontrolling interests’ share in (earnings) loss — (50) 207 Net income (loss) attributable to common shares $ (391,347) $ (260,151) $ (262,596) 63 Table of Contents The following table summarizes our results of operations as a percentage of total revenues: Year Ended December 31, 2025 2024 2023 Revenues: Medical services revenue 100 % 100 % 100 % Other operating revenue — — — Total revenues 100 100 100 Expenses: Medical services expense 101 96 93 Other medical expenses 2 4 6 General and administrative 4 4 7 Depreciation and amortization — — — Impairments 1 — — Total expenses 108 105 105 Income (loss) from operations (8) (5) (5) Other income (expense): Income (loss) from equity method investments — — — Other income (expense), net 1 1 1 Interest expense — — — Income (loss) before income taxes (7) (4) (5) Income tax benefit (expense) — — — Income (loss) from continuing operations (7) (4) (5) Discontinued operations: Income (loss) before gain (loss) on sales — — — Gain (loss) and adjustments on sales of assets, net — — (1) Total discontinued operations — — (2) Net income (loss) (7) (4) (6) Noncontrolling interests’ share in (earnings) loss — — — Net income (loss) attributable to common shares (7) % (4) % (6) % Comparison of Year Ended December 31, 2025 and 2024 The following discussion should be read in conjunction with “Cautionary Language Regarding Forward-Looking Statements,” Part I, Item 1 "Business," Part I, Item 1A "Risk Factors," and our consolidated financial statements and related notes included under Item 8 of this Report.
We will discuss and provide our analysis in the following order: • Overview and Key Developments • Key Financial and Operating Metrics • Key Components of Our Results of Operations • Results of Operations • Non-GAAP Financial Measures • Liquidity and Capital Resources • Critical Accounting Estimates • Recent Accounting Pronouncements Overview and Key Developments Our business is transforming healthcare by empowering the PCP to be the agent for change in the communities they serve.
We will discuss and provide our analysis in the following order: • Overview and Recent Developments • Key Financial and Operating Metrics • Key Components of Our Results of Operations • Results of Operations • Non-GAAP Financial Measures • Liquidity and Capital Resources • Critical Accounting Estimates • Recent Accounting Pronouncements Overview and Recent Developments Our business is transforming healthcare by empowering the PCP to be the agent for change in the communities they serve.
Under the typical capitation arrangement, we are entitled to PMPM fees to provide a defined range of healthcare services for MA health plan members through our contracted physician partners and affiliated PCPs. Such fees are typically based on a defined percentage of corresponding premium that payors receive from CMS.
Under the typical capitation arrangement, we are entitled to PMPM fees to provide a defined range of healthcare services for MA health plan members through our contracted physician partners and affiliated PCPs. Such fees are typically based on a defined percentage of corresponding premium that payors receive from CMS.
We define Adjusted EBITDA as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) stock-based compensation expense, (vi) severance and related costs, and (vii) certain other items that are not considered by us in the evaluation of ongoing operating performance.
We define Adjusted EBITDA as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) stock-based compensation expense, (vi) severance and related costs, and (vii) certain other items that are not considered by us in the evaluation of ongoing operating performance.
We reflect our share of Adjusted EBITDA for equity method investments by applying our actual ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis. Gross profit is the most directly comparable U.S. GAAP measure to medical margin. Net income (loss) is the most directly comparable U.S. GAAP measure to Adjusted EBITDA.
We reflect our share of Adjusted EBITDA for equity method investments by applying our actual ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis. Gross profit (loss) is the most directly comparable U.S. GAAP measure to medical margin. Net income (loss) is the most directly comparable U.S. GAAP measure to Adjusted EBITDA.
Subject to specified conditions and receipt of commitments, the Secured Term Loan Facility may be expanded (or a new term loan facility, revolving credit facility or letter of credit facility added) by up to (i) $50.0 million plus (ii) an additional amount determined in accordance with a formula tied to repayment of certain of our indebtedness.
Subject to specified conditions and receipt of commitments, the Secured Term Loan may be expanded (or a new term loan facility, revolving credit facility or letter of credit facility added) by up to (i) $50.0 million plus (ii) an additional amount determined in accordance with a formula tied to repayment of certain of our indebtedness.
Medical services expenses are recognized in the period in which services are provided and include estimates of our obligations for medical services that have been rendered by third parties, but for which claims have either not yet been received, processed or paid.
Medical services expenses are recognized in the period in which services are provided and include estimates of our obligations for medical services that have been rendered by third parties, but for which claims have either not yet been received, processed or paid.
The Credit Facility is guaranteed by certain of our subsidiaries, including those identified as variable interest entities, and contain customary covenants including, among other things, limitations on restricted payments such as: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios.
The Credit Facility is guaranteed by certain of our subsidiaries, including those identified as variable interest entities, and contain customary covenants including, among other things, limitations on restricted payments including: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios.
Gross profit is the most directly comparable financial measure calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to medical margin. Net income (loss) is the most directly comparable financial measure calculated in accordance with U.S. GAAP to Adjusted EBITDA. See “—Non-GAAP Financial Measures" for additional information.
Gross profit (loss) is the most directly comparable financial measure calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to medical margin. Net income (loss) is the most directly comparable financial measure calculated in accordance with U.S. GAAP to Adjusted EBITDA. See “—Non-GAAP Financial Measures" below for additional information.
If we do raise additional capital through public or private equity, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders’ rights.
If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders’ rights.
We recognize capitation revenue over the period eligible members are entitled to receive healthcare services. Gross Profit Gross profit represents the amount earned from total revenues less medical services expense and other medical expenses. Total revenues include medical services revenue and other operating revenue.
We recognize capitation revenue over the period eligible members are entitled to receive healthcare services. Gross Profit (Loss) Gross profit (loss) represents the amount earned from total revenues less medical services expense and other medical expenses. Total revenues include medical services revenue and other operating revenue.
Our business model is differentiated by its focus on existing community-based physician groups and is built around three key elements: (1) agilon’s platform; (2) agilon’s long-term physician partnership approach; and (3) agilon’s network.
Our business model is differentiated by its focus on existing community-based physician groups and is built around three key elements: (1) agilon’s platform; (2) agilon’s long-term physician partnership model; and (3) agilon’s network.
See “—Non-GAAP Financial Measures” below, for additional information regarding our use of medical margin and a reconciliation of gross profit to medical margin.
See “—Non-GAAP Financial Measures” below, for additional information regarding our use of medical margin and a reconciliation of gross profit (loss) to medical margin.
We recognize capitation revenue over the period eligible members are entitled to receive healthcare services. In certain of our payor arrangements, we are also financially responsible for Medicare Part D pharmaceutical costs for prescriptions rendered to members. Medical services revenue constitutes substantially all of our total revenue for the years ended December 31, 2024, 2023, and 2022.
We recognize capitation revenue over the period eligible members are entitled to receive healthcare services. In certain of our payor arrangements, we are also financially responsible for Medicare Part D pharmaceutical costs for prescriptions rendered to members. Medical services revenue constitutes substantially all of our total revenue for the years ended December 31, 2025, 2024, and 2023.
See “—Non-GAAP Financial Measures” below, for additional information regarding our use of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA. 57 Table of Contents Key Components of Our Results of Operations Revenues Medical Services Revenue Our medical services revenue consists of capitation revenue under contracts with various payors.
See “—Non-GAAP Financial Measures” below, for additional information regarding our use of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA. 60 Table of Contents Key Components of Our Results of Operations Revenues Medical Services Revenue Our medical services revenue consists of capitation revenue under contracts with various payors.
The maturity date of the Credit Facility is February 18, 2026. Effective with the Second Amendment to Credit Agreement on May 25, 2023, we transitioned to the Secured Overnight Financing Rate (“SOFR”) as a benchmark interest rate used in the credit agreement.
The maturity date of the Credit Facility was February 18, 2026. Effective with the Second Amendment to Credit Agreement on May 25, 2023, we transitioned to the Secured Overnight Financing Rate (“SOFR”) as a benchmark interest rate used in the Credit Agreement.
Based on our planned operations, we believe that our existing cash and cash equivalents, investments in marketable securities, as well as available borrowing capacity under the Credit Facility, will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months, though we may require additional capital resources in the future (i.e., beyond the next 12 months).
Based on our planned operations, we believe that our existing cash and cash equivalents, investments in marketable securities, as well as available borrowing capacity under the Credit Facility, will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months, though we may require additional capital resources in the future.
Contracts with payors are generally multi-year arrangements and have a single performance obligation that constitutes a series, as defined by ASC 606, to stand ready on a monthly basis to provide all aspects of 69 Table of Contents necessary medical care to members for the contracted period.
Contracts with payors are generally multi-year arrangements and have a single performance obligation that constitutes a series, as defined by ASC 606, to stand ready on a monthly basis to provide all aspects of necessary medical care to members for the contracted period.
Depreciation includes expenses associated with buildings, computer equipment and software, furniture 58 Table of Contents and fixtures, and leasehold improvements. Amortization primarily includes expenses associated with acquired intangible assets. Other Income (Expense) Income (loss) from equity method investments Income (loss) from equity method investments consists primarily of income associated with our participation in the CMS ACO Models programs.
Depreciation includes expenses associated with computer equipment and software, furniture and fixtures, and leasehold improvements. Amortization primarily includes expenses associated with acquired intangible assets. 61 Table of Contents Other Income (Expense) Income (loss) from equity method investments Income (loss) from equity method investments consists primarily of income associated with our participation in the CMS ACO Models programs.
We recognize incentive revenue as earned using the most likely amount methodology and only to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. The determination of these estimates is subject to significant judgment.
We recognize incentive revenue as earned using the most likely amount methodology and only to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any uncertainty is resolved. 71 Table of Contents The determination of these estimates is subject to significant judgment.
Includes costs in geographies that are in implementation and are not yet generating revenue and investments to grow existing markets. For the years ended December 31, 2024, 2023, and 2022, costs incurred in implementing geographies were $5.4 million, $33.7 million and $23.9 million, respectively. Medical Margin We define medical margin as medical services revenue after medical services expense is deducted.
Includes costs in geographies that are in implementation and are not yet generating revenue and investments to grow existing markets. For the years ended December 31, 2025, 2024, and 2023, costs incurred in implementing geographies were $3.7 million, $5.4 million and $33.7 million, respectively. Medical Margin We define medical margin as medical services revenue after medical services expense is deducted.
Our cash flow from operations is dependent upon the number of members on our platform, the timing of settlements with payors and the level of operating and general and administrative expenses necessary to operate and grow our business, among other factors.
Our cash flow from operations is dependent 70 Table of Contents upon the number of members on our platform, the timing and amounts of settlements with payors and the level of operating and general and administrative expenses necessary to operate and grow our business, among other factors.
Daily Simple SOFR Rate Loans and SOFR Rate Loans bear interest at a rate equal to the sum of 3.50% and the higher of (a) SOFR, as defined in the credit agreement, and (b) 0%.
Daily Simple SOFR Rate Loans and Term SOFR Rate Loans bear interest 69 Table of Contents at a rate equal to the sum of 3.50% and the higher of (a) SOFR, as defined in the Credit Agreement, and (b) 0%.
For certain of our divestiture transactions, we continue to be responsible for any liabilities arising from the business that were incurred prior to the closing date of such transaction, including any fines, penalties, and other sanctions, the payment of claims for medical services incurred prior to the effective date of each transaction, a liability for unrecognized tax benefits for which we are indemnified, and other contingent liabilities that we currently believe are remote.
For certain of our divestiture transactions, we continue to be responsible for any liabilities arising from the business that were incurred prior to the closing date of such transaction, including any fines, penalties, and other sanctions, the payment of claims for medical services incurred prior to the effective date of each transaction, and other contingent liabilities that we currently believe are remote.
Investments to support geography entry decreased to $28.5 million for the year ended December 31, 2024, compared to $40.8 million in 2023 due to the decreased costs associated with our geographies that are expected to become operational in the following calendar year and expansion into existing geographies.
Investments to support geography entry decreased to $22.2 million for the year ended December 31, 2025, compared to $28.5 million in 2024 due to the decreased costs associated with our geographies that are expected to become operational in the following calendar year and expansion into existing geographies.
The table below represents costs to support our live geographies and enterprise functions, which are included in general and administrative expenses (dollars in thousands): Year Ended December 31, 2024 2023 2022 Platform support costs $ 169,402 $ 163,652 $ 127,458 % of Revenue 3 % 4 % 5 % Net Income (Loss) and Adjusted EBITDA Net income (loss) is the most directly comparable U.S.
The table below presents costs to support our live geographies and enterprise functions, which are included in general and administrative expenses (dollars in thousands): Year Ended December 31, 2025 2024 2023 Platform support costs $ 159,986 $ 169,402 $ 163,652 % of Revenue 3 % 3 % 4 % Net Income (Loss) and Adjusted EBITDA Net income (loss) is the most directly comparable U.S.
Partner physician compensation expense decreased to $63.4 million in 2024 compared to $94.5 million in 2023 as a result of the losses generated in our geographies, which is a function of medical services revenues less the sum of medical services expenses, other provider costs and market operating costs, for the respective geography.
Partner physician compensation expense, which is a function of medical services revenues less the sum of medical services expenses, other provider costs and market operating costs, for the respective geography, decreased to $18.1 million in 2025 compared to $63.4 million in 2024 as a result of the recent losses generated in certain of our geographies.
Medical services expense represents costs incurred for medical services provided to our members. As our platform matures over time, we expect medical margin to increase in absolute dollars. However, medical margin PMPM may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM.
As our platform matures over time, we expect medical margin to increase in absolute dollars. However, medical margin PMPM may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM.
(3) See Note 12 to the Consolidated Financials Statements in Item 8 of this Report for additional information regarding capital commitments to physician partners to support physician partner expansion and related purposes.
See Note 10 to the Consolidated Financial Statements in Item 8 of this Report for additional information. • Capital commitments . See Note 11 to the Consolidated Financial Statements in Item 8 of this Report for additional information regarding capital commitments to physician partners to support physician partner expansion and related purposes.
At our option, borrowings under the credit agreement can be either: (i) SOFR Rate Loans, (ii) Daily Simple SOFR Rate Loans, or (iii) Base Rate Loans.
At our option, borrowings under the Credit Facility can be either: (i) Term SOFR Rate Loans, (ii) Daily Simple SOFR Rate Loans, or (iii) Base Rate Loans, each as defined in the Credit Agreement.
The Company’s costs of revenues consist of medical services expense and other medical expenses, which represents the costs that are directly related to providing the services that generate revenue. 56 Table of Contents The following table presents our gross profit (dollars in thousands): Year Ended December 31, 2024 2023 2022 Total revenues $ 6,060,530 $ 4,316,363 $ 2,388,220 Medical services expense (5,842,530) (4,008,659) (2,093,860) Other medical expenses (1) (213,159) (238,034) (183,000) Gross profit $ 4,841 $ 69,670 $ 111,360 _____________________________________________________________________ (1) Represents physician compensation expense related to surplus sharing and other care management expenses that help to create medical cost efficiency.
The Company’s costs of revenues consist of medical services expense and other medical expenses, which represents the costs that are directly related to providing the services that generate revenue. 59 Table of Contents The following table presents our gross profit (loss) (dollars in thousands): Year Ended December 31, 2025 2024 2023 Total revenues $ 5,932,576 $ 6,060,530 $ 4,316,363 Medical services expense (5,977,906) (5,842,530) (4,008,659) Other medical expenses (1) (114,691) (213,159) (238,034) Gross profit (loss) $ (160,021) $ 4,841 $ 69,670 _____________________________________________________________________ (1) Represents physician compensation expense related to surplus sharing and other care management expenses that help to create medical cost efficiency.
For additional discussion on our debt obligations, see Note 11 to the Consolidated Financial Statements in Item 8 of this Report. 68 Table of Contents Equity As of December 31, 2024, we had 412.2 million shares of common stock outstanding.
For additional discussion on our debt obligations, see Note 10 to the Consolidated Financial Statements in Item 8 of this Report. Equity As of December 31, 2025, we had 414.7 million shares of common stock outstanding.
The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA using data derived from the consolidated financial statements for the periods indicated (dollars in thousands): Year Ended December 31, 2024 2023 2022 Net income (loss) $ (260,101) $ (262,803) $ (106,864) (Income) loss from discontinued operations, net of income taxes 9,824 67,550 14,554 Interest expense 6,177 6,658 4,484 Income tax expense (benefit) 1,451 791 1,640 Depreciation and amortization 24,463 16,043 8,949 Impairments and (gain) loss on lease terminations 3,596 — 5,458 Severance and related costs 4,577 188 2,470 Stock-based compensation expense 50,657 69,326 28,069 EBITDA adjustments related to equity method investments (1) 17,582 22,694 3,737 Other (2) (12,441) (15,448) (7,967) Adjusted EBITDA $ (154,215) $ (95,001) $ (45,470) _____________________________________________________________________ (1) Includes elimination of certain administrative services provided by us to our equity method investments.
The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA using data derived from our consolidated financial statements for the periods indicated (dollars in thousands): Year Ended December 31, 2025 2024 2023 Net income (loss) $ (391,347) $ (260,101) $ (262,803) (Income) loss from discontinued operations, net of income taxes (14,000) 9,824 67,550 Interest expense 6,641 6,177 6,658 Income tax expense (benefit) 1,251 1,451 791 Depreciation and amortization 28,594 24,463 16,043 Impairments 36,085 3,596 — Severance and related costs 6,075 4,577 188 Stock-based compensation expense 49,119 50,657 69,326 EBITDA adjustments related to equity method investments (1) 43,304 17,582 22,694 Other (2) (61,877) (12,441) (15,448) Adjusted EBITDA $ (296,155) $ (154,215) $ (95,001) _____________________________________________________________________ (1) Includes elimination of certain trademark licensing, operating and administrative services provided by us to our equity method investments.
The following table sets forth changes in cash flows for the periods indicated (dollars in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ (57,777) $ (156,199) $ (130,808) Net cash provided by (used in) investing activities 139,891 (44,019) (444,388) Net cash provided by (used in) financing activities (2,583) (193,133) 28,056 67 Table of Contents Net Cash Provided By (Used In) Operating Activities Net cash used in operating activities was $57.8 million for the year ended December 31, 2024 compared to $156.2 million and $130.8 million for the years ended December 31, 2023 and 2022, respectively.
The following table sets forth changes in cash flows for the periods indicated (dollars in thousands): Year Ended December 31, 2025 2024 2023 Net cash provided by (used in) operating activities $ (105,763) $ (57,777) $ (156,199) Net cash provided by (used in) investing activities 88,610 139,891 (44,019) Net cash provided by (used in) financing activities (2,994) (2,583) (193,133) 2025 Cash Flows Compared to 2024 Cash Flows Net cash used in operating activities was $105.8 million for the year ended December 31, 2025 compared to $57.8 million for the year ended December 31, 2024.
We believe the following key metrics are useful in evaluating our business (dollars in thousands): As of and for the Year Ended December 31, 2024 2023 2022 MA members 526,500 388,400 230,800 Medical services revenue $ 6,047,715 $ 4,307,350 $ 2,384,889 Gross profit $ 4,841 $ 69,670 $ 111,360 Medical margin (1) $ 205,185 $ 298,691 $ 291,029 Platform support costs $ 169,402 $ 163,652 $ 127,458 Net income (loss) $ (260,101) $ (262,803) $ (106,864) Adjusted EBITDA (1) $ (154,215) $ (95,001) $ (45,470) _____________________________________________________________________ (1) Medical margin and Adjusted EBITDA are non-GAAP financial measures.
We believe the following key metrics are useful in evaluating our business (dollars in thousands): As of and for the Year Ended December 31, 2025 2024 2023 MA members 511,000 526,500 388,400 Medical services revenue $ 5,921,341 $ 6,047,715 $ 4,307,350 Gross profit (loss) $ (160,021) $ 4,841 $ 69,670 Medical margin (1) $ (56,565) $ 205,185 $ 298,691 Platform support costs $ 159,986 $ 169,402 $ 163,652 Net income (loss) $ (391,347) $ (260,101) $ (262,803) Adjusted EBITDA (1) $ (296,155) $ (154,215) $ (95,001) _____________________________________________________________________ (1) Medical margin and Adjusted EBITDA are non-GAAP financial measures.
With our model, our goal is to remove the barriers that prevent community-based physicians from evolving to a Total Care Model, where the physician is empowered to manage health outcomes and the total healthcare needs of their attributed Medicare patients. 2024 Results: • Medicare Advantage members of approximately 526,500 as of December 31, 2024 increased 36% from 2023. • The CMS ACO Models attributed beneficiaries of approximately 132,100 as of December 31, 2024 increased 48% from 2023. • Total revenue of $6.06 billion increased 40% from 2023. • Gross profit of $4.8 million, compared to $69.7 million in 2023. • Medical margin of $205.2 million, compared to $298.7 million in 2023. • Net loss of $260.1 million, compared to $262.8 million in 2023. • Adjusted EBITDA loss of $154.2 million, compared to Adjusted EBITDA loss of $95.0 million in 2023.
With our model, our goal is to remove the barriers that prevent community-based physicians from evolving to a Total Care Model, where the physician is empowered to manage health outcomes and the total healthcare needs of their attributed Medicare patients. 2025 Results: • MA members of approximately 511,000 as of December 31, 2025 decreased 3% from 2024. • The CMS ACO Models attributed beneficiaries of approximately 114,000 as of December 31, 2025 decreased 13% from 2024. • Total revenue of $5.93 billion decreased 2% from 2024. • Gross loss of $160.0 million, compared to gross profit of $4.8 million in 2024. • Medical margin was negative $56.6 million, compared to earnings of $205.2 million in 2024. • Net loss of $391.3 million, compared to net loss of $260.1 million in 2024. • Adjusted EBITDA loss of $296.2 million, compared to Adjusted EBITDA loss of $154.2 million in 2024.
General and Administrative Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % General and administrative $ 268,912 $ 285,760 $ (16,848) (6) % % of total revenues 4 % 7 % General and administrative expenses decreased $16.8 million, or 6%, for the year ended December 31, 2024 compared to 2023.
General and Administrative Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % General and administrative $ 238,536 $ 268,912 $ (30,376) (11) % % of total revenues 4 % 4 % General and administrative expenses decreased $30.4 million, or 11%, for the year ended December 31, 2025 compared to 2024.
Operating costs to support our live geographies and enterprise functions as a percentage of revenue decreased to 3% for the year ended December 31, 2024 compared to 4% in 2023.
Operating costs to support our live geographies and enterprise functions as a percentage of revenue remained consistent at 3% for each of the years ended December 31, 2025 and 2024.
Other provider costs in 2024 include $5.4 million related to geographies that became operational in January 2025, while other provider costs in 2023 include $33.7 million of costs related to geographies that became operational in 2024.
Other provider costs decreased by $17.0 million to $132.8 million in 2025 compared to $149.8 million in 2024. Other provider costs in 2025 include $3.7 million related to geographies that became operational in January 2026, while other provider costs in 2024 include $5.4 million of costs related to geographies that became operational in 2025.
Our model operates by forming RBEs within local geographies, that enter into arrangements with payors providing for monthly payments to manage the total healthcare needs of our physician partners’ attributed patients (or, global capitation arrangements), contract with agilon to perform certain functions and enter into long-term professional service agreements with one or more anchor physician groups pursuant to which the anchor physician groups receive a base compensation rate and share in the savings from successfully improving quality of care and reducing costs.
The RBEs also contract with agilon to perform certain functions and enter into long-term professional service agreements with one or more anchor physician groups pursuant to which the anchor physician groups receive a base compensation rate and share in the savings from successfully improving quality of care and reducing costs.
Other Medical Expenses Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Other medical expenses $ 213,159 $ 238,034 $ (24,875) (10 %) % of total revenues 4 % 6 % Other medical expenses decreased by $24.9 million, or 10%, for the year ended December 31, 2024 compared to 2023.
Other Medical Expenses Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Other medical expenses $ 114,691 $ 213,159 $ (98,468) (46) % % of total revenues 2 % 4 % Other medical expenses decreased by $98.5 million, or 46%, for the year ended December 31, 2025 compared to 2024.
We may seek to raise any necessary additional capital through a combination of public or private equity offerings and/or debt financings. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us, if at all.
There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us, if at all.
We base estimates on the best information available to us at the time, our historical experience, known trends and events and various other assumptions that we believe are reasonable under the circumstances.
The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our historical experience, known trends and events and various other assumptions that we believe are reasonable under the circumstances.
GAAP measures as net income (loss), cash flows provided by or used in operating, investing or financing activities or other 65 Table of Contents financial statement data presented in our consolidated financial statements as an indicator of financial performance or liquidity.
Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as an alternative to such U.S. GAAP measures as net income (loss), cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our consolidated financial statements as an indicator of financial performance or liquidity.
Stock-based compensation expense decreased $18.7 million in 2024 primarily due to the cancellation of stock-based instruments during 2024. 62 Table of Contents Other income (expense), net Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Other income (expense), net $ 34,489 $ 27,840 $ 6,649 24 % % of total revenues 1 % 1 % Other income (expense), net increased $6.6 million, or 24%, for the year ended December 31, 2024 compared to 2023 primarily from income related to services rendered to our CMS ACO Models investments.
Other income (expense), net Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Other income (expense), net $ 67,616 $ 34,489 $ 33,127 96 % % of total revenues 1 % 1 % Other income (expense), net increased $33.1 million, or 96%, for the year ended December 31, 2025 compared to 2024 primarily from increase in income related to services rendered to our CMS ACO Models investments during 2025.
GAAP, we present medical margin and Adjusted EBITDA, which are non-GAAP financial measures. We define medical margin as medical services revenue after medical services expense is deducted. Medical services expense represents costs incurred for medical services provided to our members. As our platform matures over time, we expect medical margin to increase in absolute dollars.
Non-GAAP Financial Measures In addition to providing results that are determined in accordance with U.S. GAAP, we present medical margin and Adjusted EBITDA, which are non-GAAP financial measures. 66 Table of Contents We define medical margin as medical services revenue after medical services expense is deducted. Medical services expense represents costs incurred for medical services provided to our members.
Other Income (Expense), Net Other income (expense), net includes interest income, which consists primarily of interest earned on our cash and cash equivalents, restricted cash and cash equivalents, and marketable securities, including amortization/accretion of discount/premium. Interest Expense Interest expense consists primarily of interest expense associated with our outstanding debt, including amortization of debt issuance costs.
Other Income (Expense), Net Other income (expense), net includes: (i) trademark licensing and other operating and administrative services to our equity method investments and (ii) interest income, which consists primarily of interest earned on our cash and cash equivalents, restricted cash and cash equivalents, and marketable securities, including amortization/accretion of discount/premium.
The year ended December 31, 2023 includes $15.2 million of physician compensation expenses to reduce the physician partners’ compensation percentage in current and future years in exchange for our common stock.
The year ended December 31, 2023 includes $15.2 million of physician compensation expenses to reduce the physician partners’ compensation percentage in current and future years in exchange for our common stock. (2) Includes interest income, transaction-related costs and elimination of certain trademark licensing, operating and administrative services provided by agilon health, inc. to equity method investments.
As a result, we may require additional capital resources in the future to execute strategic initiatives to grow our business. Our primary uses of cash include payments for medical claims and other medical expenses, general and administrative expenses, costs associated with the development of new geographies and expansion of existing geographies, debt service and capital expenditures.
Our primary uses of cash include payments for medical claims and other medical expenses, including physician compensation expense, general and administrative expenses, costs associated with the development of new geographies and expansion of existing geographies, debt service and capital expenditures.
Income Tax Benefit (Expense) We are subject to corporate U.S. federal, state, and local income taxation. Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.
Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management makes estimates and judgments about future taxable income based on assumptions that are consistent with our plans and estimates.
However, medical margin PMPM may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM. We believe this metric provides insight into the economics of our capitation arrangements as it includes all medical services expense directly associated with our members’ care.
We believe this metric provides insight into the economics of our capitation arrangements as it includes all medical services expense directly associated with our members’ care.
Key Financial and Operating Metrics All of our key metrics exclude historical results from our Hawaii and California operations (which are included as discontinued operations in our consolidated financial statements). We monitor the following key financial and operating metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions.
We monitor the following key financial and operating metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions.
Some of these limitations are: • Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; • Adjusted EBITDA does not reflect interest expense, or the requirements necessary to service interest or principal payments on debt; • Adjusted EBITDA does not reflect income tax expense (benefit) or the cash requirements to pay taxes; • Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; • Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and • The expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from similarly titled non-GAAP financial measures.
Some of these limitations are: • Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs; • Adjusted EBITDA does not reflect interest expense, or the requirements necessary to service interest or principal payments on debt; • Adjusted EBITDA does not reflect income tax expense (benefit) or the cash requirements to pay taxes; • Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments; • Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and • The expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from similarly titled non-GAAP financial measures. 67 Table of Contents The following table sets forth a reconciliation of gross profit (loss) to medical margin using data derived from our consolidated financial statements for the periods indicated (dollars in thousands): Year Ended December 31, 2025 2024 2023 Gross profit (loss) (1) $ (160,021) $ 4,841 $ 69,670 Other operating revenue (11,235) (12,815) (9,013) Other medical expenses 114,691 213,159 238,034 Medical margin $ (56,565) $ 205,185 $ 298,691 _____________________________________________________________________ (1) Gross profit (loss) is defined as total revenues less medical services expense and other medical expenses.
Net Cash Provided By (Used In) Investing Activities Net cash provided by investing activities was $139.9 million for the year ended December 31, 2024, compared to net cash used in investing activities of $44.0 million and $444.4 million for the years ended and December 31, 2023 and 2022, respectively.
Net cash provided by investing activities was $88.6 million for the year ended December 31, 2025, compared to $139.9 million for the year ended December 31, 2024. Net cash provided by investing activities in 2025 and 2024 was primarily due to proceeds from the maturities, net of investments, of marketable securities of $103.6 million and $175.4 million, respectively.
Final reconciliation and receipt of amounts due from payors are typically settled in arrears, following completion of the contractual program year.
Final reconciliation and receipt of amounts due from payors are typically settled in arrears, following completion of the contractual program year. 68 Table of Contents We are party to various contractual obligations that we will be required to satisfy over the short and long term.
The Credit Facility includes: (i) a $100.0 million senior secured term loan (the “Secured Term Loan Facility”) and (ii) a $100.0 million senior secured revolving credit facility (the “Secured Revolving Facility”) with a capacity to issue standby letters of credit in certain circumstances up to a maximum of $100.0 million.
Debt Obligations On February 18, 2021, we executed a credit facility agreement (as amended by the First Amendment to Credit Agreement, dated as of March 1, 2021 and the Second Amendment to Credit Agreement, dated as of May 25, 2023 (the “Credit Agreement”), which includes: (i) a $100.0 million senior secured term loan (the “Secured Term Loan,” and together with the Secured Term Loan, the “Credit Facility”) and (ii) a $100.0 million senior secured revolving credit facility (the “Secured Revolving Facility”) with a capacity to issue standby letters of credit in certain circumstances up to a maximum of $100.0 million.
Operating costs to support our live geographies and enterprise functions (platform support costs) increased by $5.8 million to $169.4 million in 2024 compared to $163.7 million in 2023 due primarily to growth in operating costs incurred to support geographies that became operational in 2024.
Operating costs to support our live geographies and enterprise functions (platform support costs) decreased by $9.4 million to $160.0 million in 2025 compared to $169.4 million in 2024 due primarily to partnership exits during 2024.
We generally invest any excess cash in money market accounts, which are classified as cash equivalents, and marketable securities. Our investment strategies are designed to provide safety and preservation of capital, sufficient liquidity to meet the cash flow needs of our business operations and attainment of a competitive return.
Over the long term, our investment strategies are designed to provide safety and preservation of capital, and sufficient liquidity to meet the cash flow needs of our business operations. As of December 31, 2025, we had cash and cash equivalents of $173.7 million and investments in marketable securities of $111.4 million.
Critical Accounting Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions.
Net cash used in financing activities was $3.0 million for the year ended December 31, 2025 compared to $2.6 million for the year ended December 31, 2024. Critical Accounting Estimates Management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP.
The increase in net cash used in operating activities in 2023 compared to 2022 was primarily a result of the increase in medical margin contributed from new and existing geographies, partially offset by increased provider costs, including partner physician incentive expenses and the timing of settlements with payors from new and existing geographies.
The increase in net cash used in operating activities was primarily the result of a decline in medical margin and the timing of settlements with payors.
See Note 13 to the Consolidated Financial Statements in Item 8 of this Report for additional information about our equity transactions.
See “—Overview and Recent Developments” above for information related to our actions to pursue a reverse stock split and Note 12 to the Consolidated Financial Statements in Item 8 of this Report for additional information about our equity transactions. Cash Flows The following summary discussion of our cash flows is based on the consolidated statements of cash flows.
We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. We may require additional financing in the future to fund working capital and pay our obligations.
We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. Our cash flows are impacted by the timing of receipts from payors. Our business normally should produce positive cash flows during periods of positive medical margin.
Total Discontinued Operations Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Total discontinued operations $ (9,824) $ (67,550) $ 57,726 85 % % of total revenues — % (2 %) Discontinued operations generated losses of $9.8 million for the year ended December 31, 2024 compared to $67.6 million for the year ended December 31, 2023.
Total Discontinued Operations Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Total discontinued operations $ 14,000 $ (9,824) $ 23,824 243 % % of total revenues — % — % Total discontinued operations relates to the sale of our Hawaii operations in October 2023.
Income (loss) from equity method investments Year Ended December 31, Change (dollars in thousands) 2023 2022 $ % Income (loss) from equity method investments $ 16,489 $ 10,720 $ 5,769 54 % % of total revenues — % — % Income (loss) from equity method investments increased $5.8 million, or 54%, for the year ended 2023 compared to 2022 primarily from our CMS ACO Models investments as a result of stronger performance driven primarily by increased medical margin during 2023 compared to 2022.
Income (loss) from equity method investments Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Income (loss) from equity method investments $ (1,835) $ 14,992 $ (16,827) (112) % % of total revenues — % — % Income (loss) from equity method investments decreased $16.8 million, or 112%, for the year ended December 31, 2025 compared to 2024 primarily from an increase in operating expenses related to services we provided to our CMS ACO Models investees in 2025.
We expect to continue to incur operating losses and generate negative cash flows from operations for the foreseeable future due to the investments we intend to continue to make in expanding our business and additional general and administrative costs we expect to incur related to our operation as a public company.
From time to time, we may incur operating losses and may generate negative cash flows from operations. As a result, we may require additional capital resources in the future to execute strategic initiatives to grow our business.
In 2023, we completed the disposition of our Hawaii operations and recognized a loss on sale of assets of $47.5 million. For additional discussion related to discontinued operations, see Note 20 to the Consolidated Financial Statements in Item 8 of this Report.
Total discontinued operations for the year ended December 31, 2025 relates to the release of a contingent obligation from our Hawaii operations compared to losses from discontinued operations for the year ended December 31, 2024. For additional discussion related to discontinued operations, see Note 19 to the Consolidated Financial Statements in Item 8 of this Report.
(2) Includes interest income, transaction-related costs and elimination of certain administrative services provided by agilon health, inc. to equity method investments. 66 Table of Contents Liquidity and Capital Resources We have historically financed our operations primarily through funds generated from our capitation arrangements with payors, issuances of equity securities, and borrowings under credit agreements.
We have historically financed our operations primarily through funds generated from our capitation arrangements with payors, distributions and or payments from our equity method investments, issuances of equity securities, and borrowings under credit agreements. We generally invest any excess cash in money market accounts and marketable securities.
Platform Membership Details Medicare Advantage members increased 36% during 2024, which includes contributions from new geographies and growth within geographies existing prior to 2024. Total members live on the agilon platform include 55 Table of Contents 526,500 Medicare Advantage members and 132,100 CMS ACO Models attributed beneficiaries. Average Medicare Advantage membership during 2024 was approximately 522,100.
Platform Membership Details MA members decreased 3% during 2025, which was primarily attributable to partnership exits during 2024. Total members live on the agilon platform include 511,000 MA members and 114,000 attributed CMS ACO Models beneficiaries.
The increase in medical services revenue was partially offset by higher costs associated with prescription drug benefits provided under the Medicare Part D program, which is a reduction to medical services revenue, and lower risk adjustment revenue related to unfavorable prior period development. 61 Table of Contents Medical Services Expense Year Ended December 31, Change (dollars in thousands) 2024 2023 $ % Medical services expense $ 5,842,530 $ 4,008,659 $ 1,833,871 46 % % of total revenues 96 % 93 % Medical services expense increased by $1.83 billion, or 46% for the year ended December 31, 2024 compared to 2023 due primarily to average membership growth of 38%, which was attributable to seven new geographies that became operational in 2024 as well as growth in our existing geographies.
Medical Services Revenue Year Ended December 31, Change (dollars in thousands) 2025 2024 $ % Medical services revenue $ 5,921,341 $ 6,047,715 $ (126,374) (2) % % of total revenues 100 % 100 % 64 Table of Contents Medical services revenue decreased by $126.4 million, or 2%, for the year ended December 31, 2025 compared to 2024 due primarily due to: (i) declines in average membership of 2%, which was attributable to partnership exits during 2024, and (ii) lower risk adjustment revenue, including unfavorable prior period development of approximately 1%, as a result of additional risk adjustment data received from payors.
Removed
Management makes estimates and judgments about future taxable income based on assumptions that are consistent with our plans and estimates. Total Discontinued Operations Total discontinued operations consist of the results of our Hawaii and California operations.
Added
Our model operates by forming RBEs within local geographies, that enter into arrangements with payors providing for monthly or quarterly payments to manage the total healthcare needs of our physician partners’ attributed patients (or, global capitation arrangements).
Removed
The increase in medical services revenue was also driven, to a lesser extent, by a 2% increase in PMPM capitation rates.
Added
Average MA membership during 2025 was approximately 510,000. 58 Table of Contents Reverse Stock Split On February 6, 2026, we filed a preliminary proxy statement indicating our intent to seek stockholder approval at a special meeting of stockholders to be held on March 17, 2026 for the purpose of seeking: (i) an amendment to our Amended and Restated Certificate of Incorporation to effect a reverse stock split of our common stock at a ratio of one-for-five to one-for-twenty-five, with the exact ratio to be set within this range by the Board in its sole discretion without further stockholder approval, and (ii) authority to adjourn the special meeting, if necessary, to solicit additional proxies if there are insufficient votes to approve the amendment.
Removed
The increase in medical services expense was also driven by an increase in average medical services expense per member of 6%, which was primarily due to the continued impact of elevated medical cost trends and unfavorable prior period reserve development.
Added
See the risk factor titled “ The listing of shares of our common stock does not currently comply with the continued listing requirements of the NYSE, and if the NYSE delists our common stock, it could have an adverse impact on the trading, liquidity and market price of our common stock ” in Item 1A.
Removed
Other provider costs increased by $6.0 million to $149.8 million in 2024 compared to $143.5 million in 2023, as the number of geographies and members on our platform increased in 2024.
Added
Risk Factors included in this Report. Key Financial and Operating Metrics All of our key metrics exclude historical results from our Hawaii operations (which are included as discontinued operations in our consolidated financial statements).
Removed
Comparison of Year Ended December 31, 2023 and 2022 Medical Services Revenue Year Ended December 31, Change (dollars in thousands) 2023 2022 $ % Medical services revenue $ 4,307,350 $ 2,384,889 $ 1,922,461 81 % % of total revenues 100 % 100 % Medical services revenue increased by 81%, due primarily to growth in average membership of 69%, which was attributable to eight new geographies that became operational in 2023 as well as growth in our existing geographies.
Added
Medical services expense represents costs incurred for medical services provided to our members. However, medical margin PMPM may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM.
Removed
The increase in medical services revenue was also driven, to a lesser extent, by a 7% increase in PMPM capitation rates.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hypothetical 100 basis point change in interest rates would not have a material impact on our interest expense. 70 Table of Contents We held cash, cash equivalents, restricted cash equivalents, and marketable securities of $405.6 million and $495.1 million as of December 31, 2024 and 2023, respectively, consisting of bank deposits, certificates of deposits, money market funds, U.S.
Biggest changeA hypothetical 100 basis point change in interest rates would not have a material impact on our interest expense. We held cash, cash equivalents, restricted cash equivalents, and marketable securities of $285.1 million and $405.6 million as of December 31, 2025 and 2024, respectively, consisting of bank deposits, certificates of deposits, money market funds, U.S.
The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes. 71 Table of Contents
The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes. 72 Table of Contents

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