[Management View]
P3 Health Partners' management emphasized nearing the completion of a $130 million EBITDA improvement plan, with significant contract renegotiations and operational efficiencies. Key metrics include a 9% YoY decline in membership to 115,000, total revenue of $356 million (down 6% YoY), and an adjusted EBITDA loss of $17 million.

[Outlook]
Management revised the full-year 2025 adjusted EBITDA guidance to a loss of $39 million to $69 million, citing prior period adjustments and underperformance in one market. They identified $120 million to $170 million in EBITDA improvement opportunities for 2026, driven by base rate increases, benefit design changes, operational levers, and contractual enhancements.

[Financial Performance]
- Membership: 115,000 members, down 9% YoY
- Total Revenue: $356 million, down 6% YoY
- Capitated Revenue: $352 million
- Adjusted EBITDA: Loss of $17 million, normalized loss of $8 million excluding prior period adjustments
- Medical Margin: $39 million, or $114 per member per month
- Operating Expense: Reduced by 13% YoY
- Medical Cost Trend: Remained materially flat excluding prior period adjustments

[Q&A Highlights]
Question 1: Could you explain the causes of the prior year catch-up and how you plan to prevent future occurrences?
Answer: The prior period adjustments were due to a claims migration issue in 2024 and late data from a national payer. Improved JOC processes and regular meetings with payers have been implemented to prevent future issues.

Question 2: How confident are you that your plan partners have rebid their MA books appropriately for 2026?
Answer: While final bid information is not yet available, discussions with plans indicate positive changes in benefit design and network structuring, which are expected to have a favorable impact.

Question 3: Can you provide more details on the non-core asset issues affecting guidance?
Answer: The underperformance in the Oregon market and prior period adjustments contributed to the guidance revision. Efforts are ongoing to mitigate these issues and improve performance.

Question 4: What is the status of renegotiation efforts to reduce Part D exposure and improve funding?
Answer: Approximately 75% of renegotiations are complete, with changes expected to impact both 2025 and 2026. These include reducing Part D risk and optimizing county-level networks.

Question 5: Can you elaborate on the weight and timing of EBITDA improvement opportunities for 2026?
Answer: The opportunities are divided into base rate changes (40%), benefit design and network changes (10%), operational levers (30%), and contractual enhancements (20%). Some improvements are already locked in, while others depend on ongoing execution and final benefit design data.

[Sentiment Analysis]
The tone of the management was cautiously optimistic, focusing on strategic improvements and future profitability. Analysts' questions reflected concerns about prior period adjustments and confidence in future performance.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | YoY Change |
|-----------------------|-----------------|-----------------|------------|
| Membership | 115,000 | 126,500 | -9% |
| Total Revenue | $356 million | $379 million | -6% |
| Adjusted EBITDA | -$17 million | -$22 million | +23% |
| Medical Margin | $39 million | $42 million | -7% |
| Operating Expense | -13% | - | - |

[Risks and Concerns]
- Membership decline due to rationalization of payer and provider partnerships
- Prior period adjustments impacting financial performance
- Underperformance in one market affecting overall results

[Final Takeaway]
P3 Health Partners is navigating a transitional year with strategic contract renegotiations and operational improvements aimed at driving future profitability. Despite current headwinds, management is optimistic about achieving significant EBITDA improvements in 2026 through a combination of base rate increases, benefit design changes, and enhanced operational efficiencies. Investors should monitor the execution of these strategies and the resolution of prior period adjustments to gauge the company's progress towards sustained profitability.