Astrana Health Q4 Earnings Call Highlights

Astrana Health (NASDAQ:ASTH) reported record results for the fourth quarter and full year 2025 and issued its 2026 outlook, highlighting growth from the Prospect Health acquisition, continued expansion in value-based care membership, and expectations for further operating leverage from its technology and AI platform.

Record 2025 results and fourth-quarter performance

President and CEO Brandon Sim said Astrana delivered “another year of record revenue, adjusted EBITDA, and free cash flow,” describing the company’s delegated risk model as stable and predictable amid industry cost pressure and regulatory change.

For the fourth quarter, Astrana reported:

• Total revenue: $950.5 million, up 43% year-over-year
• Adjusted EBITDA: $52.5 million, up 50% year-over-year
• Net income attributable to Astrana: $6 million
• EPS: $0.12, compared with -$0.15 in the prior-year quarter
• Adjusted EPS: $0.54

For the full year 2025, the company reported:

• Revenue: $3.2 billion
• Adjusted EBITDA: $205.4 million
• Free cash flow: $104.5 million
• Non-GAAP adjusted EPS (fully diluted): $2.20

Chief Operating and Financial Officer Chan Basho said full-year revenue grew 56% year-over-year and came in at the high end of guidance, driven by the full-quarter contribution from Prospect and organic growth in the Care Partners segment. He added that medical cost performance for both legacy Astrana and legacy Prospect remained “well controlled” and slightly better than expectations.

Membership growth, geographic mix, and risk progression

Sim said Astrana ended 2025 serving 1.6 million members in value-based care arrangements. He characterized growth as “measured,” emphasizing disciplined underwriting and alignment with payer and provider partners.

On geographic performance, management said:

• California revenue grew 50% year-over-year.
• Revenue outside California grew 90% year-over-year as newer markets scaled.
• At year-end, about 19% of total revenue came from outside California.

Sim also reiterated the company’s approach to taking on full risk only when economics and operational readiness are aligned. Astrana said it remains on track for approximately 80% of revenue and more than 36% of its own membership to be in full-risk arrangements by the end of the first quarter of 2026. Management noted that several full-risk contracts expected to begin in mid-2025 instead commenced in early 2026 as part of a coordinated implementation process.

Clinical metrics, cost trends, and technology platform emphasis

Management pointed to engagement and workflow automation as drivers of clinical and financial outcomes. Sim said annual wellness visit completion rates approached 80% in legacy Astrana markets, with “meaningful gains” in newly integrated Prospect populations. The company said more than two-thirds of prior authorizations are automatically approved.

Management also cited comparative performance for providers using its internally built platform, stating engaged providers achieved a 24% higher gap closure rate and a 30% higher annual wellness visit completion rate than less engaged providers.

In expansion markets, Astrana said Southern Nevada reached run-rate profitability in 2025 and posted a 20% year-over-year improvement in medical loss ratio. Sim said the company expects a similar maturation curve as it launches its full-risk delegated model in Texas.

On operating leverage, management reported G&A as a percentage of revenue of 6.8% in 2025, down 75 basis points year-over-year despite $26 million of one-time transaction-related costs, and down 110 basis points on an adjusted basis.

During the Q&A, Sim expanded on Astrana’s AI investments, saying the company has “over 100 U.S.-based” data scientists and engineers supporting a proprietary platform. He described AI tools focused on automating prior authorizations, claims processing and adjudication, and payer-related functions such as credentialing and eligibility, as well as provider-facing tools that surface real-time insights and “next best action” workflows.

Prospect integration update and internal controls filing timeline

Sim said Prospect integration remains on track and is validating the strategic rationale for the transaction. He said Astrana has standardized financial reporting across the combined organization, established “live visibility” into medical economics and utilization trends, and aligned workflows under the Astrana care model. Based on progress and early performance, Astrana now expects to achieve the high end of its previously communicated $12 million to $15 million in annualized synergies over the coming quarters.

Management also highlighted provider retention, stating that more than six months after closing, Astrana continues to see over 97% gross retention among Prospect primary care physicians.

Basho addressed the company’s annual report timing, stating Astrana will file a Form 12b-25 due to a material weakness in internal controls over financial reporting related to acquisition and purchase accounting processes, specifically the timing and documentation of certain control procedures. He said the results reported are in accordance with U.S. GAAP and that the issue did not result in any material misstatement or restatement. Astrana said it implemented enhancements and expanded resources and expects to file the 10-K within the 15-day extension period.

When asked about Prospect’s mix, Sim said a portion of the business includes an acute care hospital reported in the Care Delivery segment, but that the “vast majority” of Prospect revenue maps to the Care Partners segment. He estimated fee-for-service revenue at about 10% of Prospect (and noted it was not a large portion).

Capital allocation, 2026 guidance, and Medicare Advantage rate discussion

For full-year 2025, Basho said free cash flow of $104.5 million reflected “over 50%” conversion relative to adjusted EBITDA and exceeded the high end of the company’s previously communicated conversion range. Astrana ended the quarter with $429.5 million of cash and $648.7 million of net debt, with a pro forma net leverage ratio of 2.6x. The company also repurchased about 634,000 shares during the fourth quarter at an average price of $22.23, and its board increased the maximum authorization under the existing repurchase program from $50 million to $100 million.

For 2026, Astrana guided to:

• Revenue: $3.8 billion to $4.1 billion
• Adjusted EBITDA: $250 million to $280 million
• Free cash flow: $105 million to $132.5 million

For first-quarter 2026, the company guided to revenue of $900 million to $1.0 billion and adjusted EBITDA of $60 million to $70 million.

Management described the guidance framework as deliberately prudent. Basho listed headwinds including expected declines in Medicaid and exchange enrollment, adverse selection tied to disenrollment, losses from new cohorts and expansion markets, incremental new market entry costs, conservative medical cost assumptions, and “zero contribution” from the California Hospital Quality Assurance Fund (HQAF). Tailwinds included improved Medicare Advantage rates, Prospect synergies, maturation of full-risk cohorts, and operating efficiencies driven by automation and AI.

On cost trends, management said 2025 came in slightly ahead of expectations with a blended mid-4% trend. For 2026, Astrana said it is embedding a conservative assumption of just over a 5% trend, citing expected Medicaid and exchange disenrollments and potential adverse selection. The company said it expects Medicare Advantage trend to be slightly lower than the blended figure, while Medicaid, commercial, and exchange would be slightly higher.

In response to questions about Medicare Advantage rate-setting, management said it expects Astrana to be impacted more favorably than the industry by the 2027 Medicare Advantage Advance Rate Notice, citing minimal reliance on certain diagnosis sources and a historically conservative approach to risk adjustment. Management said that if the Advance Rate Notice were unchanged, it believes rates should be a positive 2.5% to 3% for Astrana, while also noting it was not willing to quantify certain elements given potential changes to coefficients and behavior.

Finally, management said no M&A is embedded in the 2026 guidance and that, as in prior years, it expects the third quarter to be stronger than other quarters.

About Astrana Health (NASDAQ:ASTH)

Astrana Health, Inc, Inc, a physician-centric technology-powered healthcare management company, provides medical care services in the United States. It operates through three segments: Care Partners, Care Delivery, and Care Enablement. The company is leveraging its proprietary population health management and healthcare delivery platform, operates an integrated, value-based healthcare model which empowers the providers in its network to deliver care to its patients. It offers care coordination services to patients, families, primary care physicians, specialists, acute care hospitals, alternative sites of inpatient care, physician groups, and health plans.