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    PIII
    Earnings call· Jun 2026(Q2 FY26)

    P3 Health Partners Q2 FY26 earnings call PIII

    Aug 10, 2026 Source

    Executive summary

    P3 Health Partners Q2 FY26 — Strong Performance and Raised Outlook Driven by Operational Execution and Payer Settlements

    P3 Health Partners reported a strong second quarter, driven by robust operational execution and significant one-time payer settlements. The company raised its full-year adjusted EBITDA outlook, reflecting confidence in its underlying business and improved payer economics. Management highlighted sustained progress in medical cost management, quality performance, and disciplined growth, positioning the company for more predictable earnings.

    Highlights

    5

    • Delivered $54 million of adjusted EBITDA in Q2 FY26, bringing H1 FY26 total to $80 million.

    • Raised full-year 2026 adjusted EBITDA outlook to a range of $80 million to $110 million, with a midpoint of $95 million.

    • MA medical cost trend for H1 FY26 was 1.8% lower than full-year 2025 baseline, a significant differentiator.

    • Quality performance is tracking ahead of internal glide path towards 4 stars on HEDIS and medication adherence measures.

    • Per member funding for at-risk population improved approximately 15% year-over-year despite lower membership.

    Concerns

    2

    • Total at-risk membership declined to approximately 105,000 at the end of Q2 FY26, down from 116,000 in Q2 FY25.

    • Q2 FY26 adjusted EBITDA included $45 million from favorable payer settlements and prior year development, with underlying EBITDA at $9 million.

    Guidance & targets

    1
    CategoryTargetConfidence
    Full-year 2026 Adjusted EBITDA
    $80 million to $110 million
    high materiality
    High

    Operational metrics

    21
    Adjusted EBITDA
    $54 millionvs loss of $17 million in Q2 FY25
    Q2 FY26

    Includes $45 million from favorable contractual settlements and prior year development.

    Adjusted EBITDA
    $80 millionvs loss of $39 million in H1 FY25
    H1 FY26

    Includes $62 million from favorable contractual settlements and prior year development recognized across the first half ($17 million in Q1, $45 million in Q2).

    Underlying Adjusted EBITDA
    $9 million
    Q2 FY26

    Excludes favorable contractual settlements and prior year development.

    Underlying Adjusted EBITDA
    $18 million
    H1 FY26

    Excludes favorable contractual settlements and prior year development. Represents positive adjusted EBITDA from core business operations.

    Revenue
    $386 millionvs $356 million in Q2 FY25
    Q2 FY26

    Achieved despite a lower membership base.

    Medical claims expense
    $269 million
    Q2 FY26

    Includes approximately $45 million of favorable payer settlements and prior year development.

    Medical margin
    $98 million
    Q2 FY26

    Also reported as $311 PPMP (Per Member Per Month).

    Adjusted operating expense
    $32 million
    Q2 FY26

    Includes continued investment in professional fees for coding documentation and infrastructure costs for the Nebraska market.

    Cash and equivalents
    $21 million
    End of Q2 FY26

    Managed with discipline within the communicated liquidity framework.

    Favorable payer settlements and prior year development
    $45 million
    Q2 FY26

    Reflects constructive resolution of legacy contractual matters and strong alignment with payer partners.

    Favorable payer settlements and prior year development
    $62 million
    H1 FY26

    Contributed to overall adjusted EBITDA performance.

    Per member funding improvement
    15%YoY
    Q2 FY26

    Reflects continued success in rate progression, contractual restructuring, and maturation of burden of illness documentation.

    Point-of-care tools lives reached
    >65,000ahead of schedule
    Q2 FY26

    Allows for more accurate burden of illness capture and quality gap closures.

    Care gaps addressed at point of care
    nearly 90%
    Q2 FY26

    Capture rates running several points ahead of broader enterprise average.

    Point-of-care tools usage in eligible visits
    roughly half
    Q2 FY26

    Company is closing this gap through in-office training.

    Patients seen by provider network and clinical teams
    87%2 points ahead of internal glide path
    Q2 FY26

    Foundational to caring for the population.

    Highest risk members seen
    99.5%well ahead of 90% glide path
    Q2 FY26

    Care management team and senior wellness centers play a key role in this effort.

    Utilization management redirect rate
    17%
    YTD

    Reflects commitment to caring for patients in the best setting and responsible stewardship of healthcare resources.

    P3 Restore program expansion
    4
    H1 FY26

    Supports stability and engagement of the provider network; expanded to include asynchronous education and CME credit.

    Quality submissions
    3xvs prior year
    YTD

    Improved process around alternative submissions.

    Members impacted by quality submissions
    up close to 20%from Q1
    Q2 FY26

    Reflects the scale and effectiveness of improved processes.

    Industry KPIs

    6
    MetricValueDetails
    Utilization trends1.8% lower%
    Stars rate environmenttracking ahead
    Medical loss care ratio85.6%%
    Membership covered lives by line105,000members
    Adjusted EPS EBITDA leverage guidance$80 million to $110 millionUSD
    Medical cost trend vs pricing assumption1.8% lower%

    Deals & partnerships

    1
    Payer partners in NebraskaEngagement for geographic expansion2026-2028

    Executing on expected trajectory. Company will perform services in 2027, with full risk arrangement beginning in 2028. This sequencing reduces downside exposure and positions for disciplined full-risk entry.

    Risks & headwinds

    2
    Membership declineYear-over-year

    At-risk membership at 105,000 in Q2 FY26, down from 116,000 in Q2 FY25

    Mitigation: Reflects deliberate portfolio actions to exit arrangements not meeting economic thresholds; current membership base is more concentrated in relationships where the model performs best.

    Seasonal build in medical expense trendSecond half of the year

    Not quantified, but noted as 'typical'

    Mitigation: Actively managing through care management, utilization management, and payment integrity programs.

    What to watch in Q3 FY26

    5

    Underlying Adjusted EBITDA

    Next quarter (Q3 FY26)
    Current$18 million (H1 FY26)
    TargetContinued positive underlying EBITDA, contributing to FY26 midpoint of $95 million

    Why it matters

    Management stated the core business is now generating positive adjusted EBITDA, excluding one-time📎 settlements. Continued growth in underlying EBITDA is crucial for demonstrating sustainable profitability.

    Excluding those items, underlying first half adjusted EBITDA was approximately $18 million. For us, this is an important milestone. It shows the improvement in our economics is not solely dependent on contractual settlements for prior period development, the core business itself is now generating positive adjusted EBITDA.

    Q&A highlights

    5

    Can you clarify the nature and size of the payer settlement, its impact on revenue/expense, and provide insight into the seasonality of earnings for the back half of the year?

    The Q2 payer settlement was $41 million, impacting only medical claims expense, not revenue. The underlying H1 EBITDA was $18 million, and the guidance midpoint implies an additional $15 million in underlying EBITDA for H2, factoring in typical seasonal medical expense pressure offset by in-year programmatic efforts. The MA medical cost trend is down 1.8% compared to FY25.

    “specifically, the payer settlement amount was $41 million, and that did not affect revenue that only affected medical claims expense.”

    asked by Ryan Langston · answered by Leif Pedersen

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Execution and Technology Adoption

    P3 Health Partners emphasized strong operational execution, expanding point-of-care tools to over 65,000 lives, ahead of schedule. These AI-enhanced tools help clinicians address nearly 90% of care gaps at the point of care and improve coding accuracy. The company is focused on in-office training to increase tool adoption, currently used in approximately half of eligible visits, and aims to close this gap.

    02

    Payer Partnerships and Contract Structure

    The company highlighted the success of its redesigned payer partnerships and contract structures, initiated 18 months prior. This work focused on enhancing risk profiles, funding mechanisms, and cost accountability. Q2 performance included $45 million in one-time📎 nonrecurring settlements from multiple payer contracts, reflecting improved alignment and trust with partners.

    03

    Disciplined Growth and Geographic Expansion

    P3 is pursuing disciplined growth, with its engagement in Nebraska progressing positively. The company plans to remain in a service-based relationship in Nebraska through 2027 before transitioning to a full-risk arrangement in 2028. This deliberate approach to geographic expansion aims to validate performance and reduce downside exposure before taking on full risk.

    04

    Clinical Performance and Medical Cost Management

    Clinical programs, point-of-care technology, and utilization management are driving significant financial results. The MA medical cost trend for the first half of 2026 was 1.8% lower than the full-year 2025 baseline, a sustained differentiator. The care management team and senior wellness centers saw 87% of patients in Q2, including 99.5% of high-risk members, contributing to better outcomes and cost control.

    05

    Quality Outcomes and Provider Engagement

    Quality performance is tracking ahead of the internal glide path for 4 stars on HEDIS and medication adherence measures. The company improved alternative submissions threefold compared to the prior year, impacting 20% more members. The P3 Restore program, a clinician coaching initiative, expanded across four markets, supporting provider stability, engagement, and practice satisfaction.

    06

    Financial Stability and Liquidity

    P3 ended the quarter with $21 million in cash and equivalents, maintaining capital discipline and focusing on financial stability. The underlying business is now generating positive adjusted EBITDA, with $18 million in the first half of 2026, excluding one-time📎 settlements, marking an important milestone for the company's economic improvement.

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