Skip to content
    OSCR
    Earnings call· Mar 2026(Q1 FY26)

    Oscar Health Q1 FY26 earnings call OSCR

    May 6, 2026 Source

    Executive summary

    Oscar Health Q1 FY26 — Strong Growth and Profitability Driven by Tech and Disciplined Execution

    Oscar Health delivered strong Q1 FY26 results, driven by significant membership growth and improved profitability metrics, leveraging its tech-first approach and AI initiatives. The company reaffirmed its full-year guidance, anticipating meaningful profitability in 2026, while actively shaping the individual health insurance market through new platforms and policy advocacy.

    Highlights

    5

    • Revenue of $4.6 billion, an increase of 53% year-over-year.

    • SG&A ratio improved 60 basis points year-over-year to 15.2%.

    • MLR improved 490 basis points year-over-year to 70.5%.

    • Earnings from operations of $704 million, an increase of nearly 2.5x over the same period last year.

    • Membership grew to 3.2 million, a 56% increase year-over-year.

    Concerns

    2

    • Risk adjustment transfer tracking around 24% in Q1, higher than the full-year expectation of 20%.

    • Gradual churn of members throughout the year, consistent with pre-ARPA levels.

    Guidance & targets

    5
    CategoryTargetConfidence
    Total revenues
    $18.7 billion to $19 billion
    high materiality
    High
    Medical Loss Ratio (MLR)
    82.4% to 83.4%
    high materiality
    High
    SG&A expense ratio
    15.8% to 16.3%
    medium materiality
    High
    Earnings from operations
    $250 million to $450 million
    high materiality
    High
    Adjusted EBITDA
    roughly $115 million higher than earnings from operations
    high materiality
    High

    Operational metrics

    15
    Net income
    $679 million$404 million increase year-over-year
    Q1 FY26

    Reported net income for the first quarter.

    Earnings from operations
    $704 million$407 million year-over-year improvement
    Q1 FY26

    Reported earnings from operations for the first quarter.

    Operating margin
    15.2%540 basis point increase year-over-year
    Q1 FY26

    Reported operating margin for the first quarter.

    Adjusted EBITDA
    $727 million$398 million increase year-over-year
    Q1 FY26

    Reported adjusted EBITDA for the first quarter.

    SG&A dollar growth
    46%
    Q1 FY26

    Growth in SG&A dollars, indicating leverage as revenue grew 53%.

    Taxes and fees as % of membership
    9% to 10%
    Q1 FY26

    Fixed portion of costs based on membership level.

    Claims from Bronze plans
    15.4%
    Q1 FY26

    Percentage of claims originating from Bronze plans.

    Cash and investments
    $8.1 billion
    Q1 FY26

    Total cash and investments at the end of the first quarter.

    Excess capital
    $809 million
    March 31, 2026

    Excess capital at insurance subsidiaries, driven by strong operating performance.

    Risk adjustment as % of direct premiums
    24%
    Q1 FY26

    Risk adjustment transfer as a percentage of direct premiums in Q1, higher than the full-year expectation due to seasonally low claims.

    Favorable prior period reserve development
    $68 million
    Q1 FY26

    Net favorable development primarily related to claims run out from the prior year, partially offset by adverse development in some states.

    Membership
    3.2 million56% year-over-year increase
    Q1 FY26 end

    Total members at the end of the first quarter, with paid members at the start of the second quarter in line with expectations.

    Revenue growth
    53%year-over-year
    Q1 FY26

    Year-over-year increase in total revenue, driven by higher membership and rate increases.

    Medical Loss Ratio (MLR) improvement
    490 basis pointsyear-over-year
    Q1 FY26

    Improvement in MLR, primarily driven by disciplined pricing, claims and risk adjustment seasonality, and favorable prior period reserve development.

    SG&A ratio improvement
    60 basis pointsyear-over-year
    Q1 FY26

    Improvement in SG&A ratio, driven by fixed cost leverage and disciplined expense management, including AI initiatives.

    Industry KPIs

    4
    MetricValueDetails
    ROE operating ROE15.2%%
    Net premiums written earned$4.6 billionUSD
    Statutory regulatory capital$1.7 billionUSD
    Prior year reserve development$68 millionUSD

    Product announcements

    4
    ProductTypeDetails
    Real-time drug pricing featurelaunch
    Bilingual voice agentsexpansion
    ICHRA Xlaunch
    Lucie Health Marketplacelaunch

    Deals & partnerships

    2
    Other carriers, benefit brokers, ICHRA platformsData exchange for ICHRA

    Oscar launched ICHRA X to create a more consistent employee experience for ICHRA.

    Allstate Health, Aflac, GuardianAncillary and supplemental product offerings on Lucie Health Marketplace

    Companies like Allstate Health, Aflac, and Guardian are joining the Lucie platform to provide additional benefit solutions.

    Risks & headwinds

    3
    Member churnThroughout the balance of the year

    Approximately 200,000 members churned between Q1 end and April 1, starting Q2 with 3 million paid members.

    Mitigation: Expects gradual churn consistent with pre-ARPA levels; no unusual utilization patterns observed for churned members.

    Risk adjustment uncertaintyQ2 FY26 and beyond

    Q1 risk adjustment transfer tracking around 24%, higher than the full-year expectation of 20%.

    Mitigation: Waiting for further clarity with the first 2026 Wakely report in Q2; current accruals are based on pricing expectations and have not yet factored in potential favorability from market morbidity reports.

    Market morbidityFull year 2026

    Wakely's new report shows market contraction tracking in line to favorable to Oscar's 20% to 30% estimate, with market morbidity potentially up 2.9% to 6.5% in 2026.

    Mitigation: Oscar's claims experience and third-party data point to market morbidity tracking in line to favorable with pricing expectations, potentially offering a tailwind. However, overall claims performance development is the most important factor.

    What to watch in Q2 FY26

    4

    Market Morbidity Assessment

    Q2 FY26 (with the first 2026 Wakely report)
    Currentin line to favorable with our expectations (Wakely report)
    TargetFurther clarity and confirmation of favorable trends

    Why it matters

    Morbidity assumptions directly impact risk adjustment and profitability.

    We look forward to further clarity with the first 2026 Wakely report in Q2.

    Q&A highlights

    6

    Describe the behavior and expense accounting for the 200,000 members who churned between Q1 and April 1.

    There were no unusual utilization patterns for churned members; most never made a payment. Claims are not paid once a member is delinquent, so no significant utilization was expected or observed for this group. The transition was in line with expectations.

    “So I would say that for members who churned off, nothing unusual about any of the utilization patterns that we experienced in the first quarter. And those members, in general, the biggest portion of the drop-off really are people that never made a payment.”

    asked by Jessica Tassan · answered by Richard Blackley

    2 min read5 chapters

    Detailed Narrative

    01

    Individual Market Dynamics and Policy

    The individual health insurance market remains resilient with 23 million lives, reflecting a consumer shift towards choice and transparency. Oscar is actively engaging with federal and state policymakers to advance policies that enhance transparency, product choice, and innovation. Early reports from Wakely indicate market contraction is tracking in line with or favorably to Oscar's 20% to 30% estimate, suggesting a stable market environment.

    02

    Technology and AI-Driven Operations

    Oscar is rapidly deploying advanced technology and AI solutions to optimize operations, reduce costs, and improve member experience. Recent innovations include a real-time drug pricing feature that predicts abandonment and guides members to lower-cost alternatives, and the scaling of new bilingual voice agents to enhance care navigation and speed to service. These initiatives are central to Oscar's strategy for continued expansion and efficiency.

    03

    ICHRA and Lucie Health Marketplace Initiatives

    The Individual Coverage Health Reimbursement Arrangement (ICHRA) is gaining traction, prompting Oscar to launch ICHRA X, a data exchange designed to connect carriers, brokers, and platforms for a more consistent employee experience. Building on this, Oscar introduced the Lucie Health Marketplace, a carrier-agnostic shopping platform for ACA plans and ancillary products. Lucie aims to empower consumers and brokers with personalized coverage options, representing a key step in Oscar's long-term vision for a consumer-driven health economy.

    04

    Cautious Approach to Risk Adjustment

    Oscar adopted a cautious stance on risk adjustment in Q1 FY26, basing reserves on market morbidity assumptions consistent with its pricing strategy. Despite seasonally low medical claims in Q1, which led to a higher risk adjustment accrual, the company is encouraged by third-party data and its own claims experience. These signals suggest market morbidity is tracking favorably, potentially offering a tailwind, though Oscar awaits further clarity from the Q2 Wakely report before adjusting accruals.

    05

    Membership Growth and Retention

    Oscar concluded the first quarter with 3.2 million members, marking a 56% year-over-year increase, driven by strong open enrollment growth and effective retention strategies. The company began Q2 with 3 million paid members, aligning with expectations for gradual churn consistent with pre-ARPA levels. This record membership underscores the success of Oscar's strategic plan and its positioning for sustained growth and profitability.

    AI-generated summary of the company’s earnings call. Not investment advice.