Agilon Health Q2 Earnings Call Highlights

Key Points

• Agilon Health exceeded Q2 guidance, reporting approximately $1.5 billion in revenue, $197 million in medical margin and $70 million in adjusted EBITDA, versus losses in the prior-year quarter.
• The company raised its 2026 outlook to roughly $5.8 billion in revenue, $485 million in medical margin and $85 million in adjusted EBITDA, supported by stronger risk-adjustment revenue and favorable medical-cost trends.
• Management is emphasizing operational consistency and clinical programs—particularly for heart failure, COPD and dementia—while prioritizing growth within existing markets and remaining disciplined on expansion into new markets.

Agilon Health NYSE: AGL reported second-quarter results that exceeded its guidance for medical margin and adjusted EBITDA, citing stronger risk-adjustment revenue, favorable medical-cost development and progress in its clinical and quality initiatives. The company also raised its full-year 2026 outlook.

CEO Tim O’Rourke, who joined the company in early May, said his first 90 days have included meetings with nearly all of agilon’s physician partners, time shadowing primary care physicians and discussions with payer partners. He said the company is focused on improving clinical and operational consistency, expanding data and risk-management capabilities, and building a more scalable operating model.

“We feel the results are evidence that our transformation efforts are gaining traction, our physician partnerships continue to strengthen, and our operating model is becoming increasingly resilient, scalable, and durable,” O’Rourke said.

Second-Quarter Financial Results

Chief Financial Officer Jeff Schwaneke said second-quarter revenue was approximately $1.5 billion, up from $1.4 billion a year earlier. The increase came despite lower Medicare Advantage membership, as more constructive 2026 rates, favorable payer contracting and higher revenue tied to improved diagnosis of members’ health conditions more than offset the membership decline.

• Medicare Advantage membership was 437,000 at the end of the second quarter, compared with 426,000 at the end of the first quarter and 498,000 a year earlier.
• ACO REACH membership was 112,000, compared with 110,000 in the first quarter and 116,000 in the second quarter of 2025.
• Medical margin was $197 million, compared with negative $53 million a year earlier.
• Adjusted EBITDA was $70 million, compared with negative $83 million in the prior-year quarter.

Medical margin exceeded the midpoint of the company’s quarterly guidance by approximately $74 million, while adjusted EBITDA exceeded the midpoint by about $50 million. Schwaneke attributed the performance to $22 million of favorable prior-year development, higher estimated risk-adjustment revenue and favorable first-quarter medical-cost trend development.

The company said second-quarter results included a $7 million contribution from ACO REACH adjusted EBITDA, roughly in line with its guidance.

Agilon ended the quarter with $257 million in cash and marketable securities, along with $83 million of off-balance-sheet cash held by its ACO entities. The company continued to expect at least $125 million in year-end 2026 cash.

Risk Adjustment and Medical-Cost Trends

Schwaneke said agilon now expects risk adjustment to contribute approximately 3% year-over-year, net of the V28 impact, compared with its prior estimate of about 1.5% at the end of the first quarter. The revised estimate reflects additional payer data, validation through midyear MAO-004 and MMR data, and the company’s burden-of-illness program.

The company’s enhanced data pipeline now includes more than 80% of its payers, according to Schwaneke. The system is intended to provide earlier data visibility and support forecasting, identification of high-risk patients and clinical interventions.

On costs, agilon lowered its estimate for full-year 2025 medical-cost trend to 5.8% from 6.2% previously. First-quarter 2026 cost trends have developed favorably and are now in the low 6% range, Schwaneke said. The company recorded a low-7% cost trend for the second quarter because of limited paid-claims data and its reserving approach.

Schwaneke said inpatient, surgical and emergency-room trends remain high by historical standards but have moderated from prior levels. For the remainder of 2026, agilon’s outlook assumes medical-cost trends in the 7% range.

Raised 2026 Outlook

Using the midpoint of its updated ranges, agilon now expects full-year 2026 revenue of approximately $5.8 billion, medical margin of approximately $485 million and adjusted EBITDA of approximately $85 million.

The outlook includes the benefit of higher estimated risk-adjustment revenue in the second half of the year, a conservative cost-trend assumption and an expected $25 million to $30 million contribution from ACO REACH adjusted EBITDA. Schwaneke said the guidance increase also accounts for higher incentive-compensation costs and incremental annual wellness visit spending.

For the third quarter, the company expects approximately $1.46 billion in revenue, medical margin of approximately $110 million and break-even adjusted EBITDA, based on the midpoint of its guidance ranges.

Clinical Pathways and Growth Priorities

O’Rourke highlighted agilon’s clinical pathways for chronic conditions, including congestive heart failure, chronic obstructive pulmonary disease and dementia. The CHF program has been deployed across 90% of agilon’s markets. O’Rourke said inpatient first-diagnosis rates for CHF within the company’s network have fallen from approximately 25% to less than 5% as the company focuses on earlier detection and treatment.

The company is also expanding a pharmacy-integrated approach for heart-failure patients. O’Rourke said fewer than 10% of heart-failure patients nationally are on appropriate medications, and agilon is working to improve that rate among its population.

Agilon expects to roll out its dementia pathway in several markets by year-end and continue expanding its COPD program. Management said the current focus remains on the CHF, dementia and COPD pathways through the rest of 2026.

Looking toward growth, O’Rourke said agilon is prioritizing execution in existing markets. Potential opportunities include converting certain care-coordination-fee arrangements to full-risk contracts, reengaging payer and physician partners where agreements were not reached for 2026, and pursuing opportunities through ACO programs. He said the company will remain measured and disciplined on new markets, noting that new-market implementation generally takes 12 to 18 months and is being evaluated with 2028 in mind.

Agilon also said its eight ACO REACH organizations delivered $229 million in gross savings and an average quality score of 96% for the 2024 performance year. Management said it is evaluating opportunities in the Medicare Shared Savings Program and the future ACO LEAD model for 2027.

About Agilon Health (NYSE:AGL)

Agilon Health NYSE: AGL is a healthcare company that partners with independent primary care physicians to deliver value-based care for Medicare beneficiaries. Through risk-sharing arrangements, Agilon assumes financial responsibility for patient populations, enabling physicians to focus on preventive and proactive health management. The company provides the administrative, clinical and operational infrastructure needed to support comprehensive care delivery.

Agilon’s platform encompasses data analytics, care management, patient engagement tools and population health programs.

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