PIII P3 Partners Inc

YTD total revenue growth of 16%

Continued strong performance across markets, re-affirming 2023 guidance

Provides preliminary 2024 Full-Year Adjusted EBITDA guidance of +$20 million to +$40 million

Management to Host Conference Call and Webcast November 8, 2023 at 4:30 PM ET

P3 Health Partners Inc. (“P3” or the “Company”) (NASDAQ: PIII), a patient-centered and physician-led population health management company, today announced its financial results for the third quarter ended September 30, 2023.

“Our results for the third quarter show the continued improvement of the business as providers and patients mature on our platform. All key metrics are tracking as expected and net cash used in operating activities has improved to negative $8 million for the quarter. We are re-affirming our existing full-year 2023 guidance and providing preliminary 2024 full-year Adjusted EBITDA guidance of $20 million to $40 million,” said Dr. Sherif Abdou, CEO of P3.

Third-Quarter 2023 Financial Results

• Total revenue was $288.4 million, an increase of 16% compared to $248.3 million in the third quarter of the prior year. Net loss was $37.3 million, an increase of approximately 43% compared to a net loss of $65.3 million in the third quarter of the prior year. Net loss PMPM was $119 compared to a net loss PMPM of $218 the third quarter of the prior year
• Adjusted EBITDA(1) loss was $22.3 million, compared to an Adjusted EBITDA loss of $40.3 million in the third quarter of the prior year. Adjusted EBITDA PMPM(1) was a loss of $71, compared to an Adjusted EBITDA loss PMPM of $135 in the third quarter of the prior year
• Gross profit was $9.1 million, as compared to negative $6.5 million in the prior year. Gross profit PMPM was $29, compared to a loss of $22 PMPM in the prior year
• Medical margin(1) was $36.2 million, an increase of 306.1% compared to $8.9 million in the third quarter of the prior year. Medical margin PMPM(1) was $115, an increase of 286.3% compared to a medical margin PMPM of $30 in the prior year

Key Financial and Operating Metrics as Reported ($millions):

Three Months Ended September 30,

Change

2023

 

2022

%YOY

Capitated Revenue

$285

 

$244

 

17%

Total Revenues

$288

 

$248

 

16%

Gross Profit

$9

 

($7)

 

240%

Medical Margin

$36

$9

306%

Net Loss

($37)

 

($65)

 

43%

Adjusted EBITDA

($22)

($40)

45%

Year-to-Date 2023 Financial Results

• Total revenue was $919.5 million, an increase of 16% compared to $791.3 million in the same period in the prior year. Net loss was $117.3 million, compared to a net loss of $1,029.2 million in the same period of the prior year. The year-to-date results of 2022 were negatively impacted by a goodwill impairment charge of $851 million. Net loss PMPM was $126 compared to a net loss PMPM of $1,148 in the same period of the prior year
• Adjusted EBITDA(1) loss was $41.2 million, compared to an Adjusted EBITDA loss of $87.9 million in the same period of the prior year. Adjusted EBITDA PMPM(1) loss was $44, compared to an Adjusted EBITDA loss of $98 PMPM in the same period of the prior year
• Gross profit was $52.5 million, compared to $3.2 million in the same period of the prior year. Gross profit PMPM was $56, compared to $4 in the same period of the prior year
• Medical margin(1) was $126.0 million, an increase of 127.0% compared to $55.5 million in the same period of the prior year. Medical margin PMPM(1) was $135, an increase of 118.1% compared to a medical margin PMPM of $62 in the same period of the prior year

Key Financial and Operating Metrics as Reported ($millions):

Nine Months Ended September 30,

Change

2023

 

2022

%YOY

Capitated Revenue

$909

 

$781

 

16%

Total Revenues

$920

$791

16%

Gross Profit

$52

 

$3

 

1533%

Medical Margin

$126

$56

127%

Net Loss

($117)

 

($1,029)

 

89%

Adjusted EBITDA

($41)

($88)

53%

Full-Year 2023 Guidance

 

Year Ending

December 31, 2023

 

 

Low

High

Medicare Advantage Members

115,000

120,000

Total Revenues (in millions)

$1,200

$1,250

Medical margin(2) (in millions)

$155

$175

Medical margin(2) PMPM

$120

$130

Adjusted EBITDA(2) Loss (in millions)

($50)

($30)

(1) Adjusted EBITDA, Adjusted EBITDA per member, per month (“PMPM”), medical margin and medical margin PMPM are non-GAAP financial measures. For reconciliations of these measures to the most directly comparable GAAP measures and more information regarding the Company’s use of non-GAAP financial measures, please see the section titled “Non-GAAP Financial Measures” and the tables at the end of this press release.

(2) The Company is not able to provide a quantitative reconciliation of full-year 2023 or 2024 guidance for Adjusted EBITDA loss to net income, or quantitative reconciliations for full-year 2023 guidance for medical margin and medical margin PMPM to net income (loss), gross profit and gross profit PMPM, the most directly comparable GAAP measures, respectively, and has not provided forward-looking guidance for net income (loss), gross profit (loss) or gross profit (loss) PMPM because of the uncertainty around certain items that may impact net income (loss), gross profit (loss) or gross profit (loss) PMPM that are not within our control or cannot be reasonably predicted without unreasonable effort. For more information regarding the non-GAAP financial measures discussed in this press release, please see “Non-GAAP Financial Measures” below.

Title & Webcast

P3 Health Third-Quarter Earnings Conference Call

Date & Time

November 8, 2023, 4:30pm Eastern Time

Conference Call Details

Toll-Free 1-833-316-0546 (US)

International 1-412-317-0692

Ask to be joined into the P3 Health Partners call

 

The conference call will also be webcast live in the "Events & Presentations" section of the Investor page of the P3 website (ir.p3hp.org). The Company’s press release will be available on the Investor page of P3’s website in advance of the conference call. An archived recording of the webcast will be available on the Investor page of P3’s website for a period of 90 days following the conference call.

 

For supplemental financial information, including certain non-GAAP financial measures, and the reconciliations thereof, please visit the Company’s Investor Relations site (ir.p3hp.org).

 

About P3 Health Partners (NASDAQ: PIII):

P3 Health Partners Inc. is a leading population health management company committed to transforming healthcare by improving the lives of both patients and providers. Founded and led by physicians, P3 has an expansive network of more than 2,700 affiliated primary care providers across the country. Our local teams of health care professionals manage the care of thousands of patients in 18 counties across five states. P3 supports primary care providers with value-based care coordination and administrative services that improve patient outcomes and lower costs. Through partnerships with these local providers, the P3 care team creates an enhanced patient experience by navigating, coordinating, and integrating the patient’s care within the healthcare system. For more information, visit www.p3hp.org and follow us on LinkedIn and Facebook.com/p3healthpartners.

Non-GAAP Financial Measures

In addition to the financial results prepared in accordance accounting principles generally accepted in the U.S. ("GAAP"), this press release contains certain non-GAAP financial measures as defined by the SEC rules, including Adjusted EBITDA, Adjusted EBITDA PMPM, medical margin and medical margin PMPM. EBITDA is defined as GAAP net income (loss) before (i) interest, (ii) income taxes and (iii) depreciation and amortization. Adjusted EBITDA is defined as EBITDA, further adjusted to exclude the effect of certain supplemental adjustments, such as (i) mark-to-market warrant gain/loss, (ii) premium deficiency reserves, (iii) equity-based compensation expense and (iv) certain other items that we believe are not indicative of our core operating performances. Adjusted EBITDA PMPM is defined as Adjusted EBITDA divided by the number of Medicare Advantage members each month divided by the number of months in the period. We believe these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with other similar companies. Medical margin represents the amount earned from capitation revenue after medical claims expenses are deducted and medical margin PMPM is defined as medical margin divided by the number of Medicare Advantage members each month divided by the number of months in the period. Medical claims expenses represent costs incurred for medical services provided to our members. As our platform grows and matures over time, we expect medical margin to increase in absolute dollars; however, medical margin PMPM may vary as the percentage of new members brought onto our platform fluctuates. New membership added to the platform is typically dilutive to medical margin PMPM. We do not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. In addition, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. The tables at the end of this press release present a reconciliation of Adjusted EBITDA to net income (loss) and Adjusted EBITDA PMPM to net income (loss) PMPM, and medical margin to gross profit and medical margin PMPM to gross profit PMPM, which are the most directly comparable financial measures calculated in accordance with GAAP.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "envision," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "pro-forma," "project," "seek," "should," "target," or "will," or the negative or other variations thereof, and similar words or phrases or comparable terminology, are intended to identify forward-looking statements. These forward-looking statements address various matters, including the Company’s future expected growth strategy and operating performance; current expectations regarding the Company’s current cash position and outlook as to revenue, at-risk Medicare Advantage membership, medical margin, medical margin PMPM, Adjusted EBITDA loss for the full year 2023 outlook as to and Adjusted EBITDA for the full-year 2024, all of which reflect the Company’s expectations based upon currently available information and data. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected or estimated and you are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Important risks and uncertainties that could cause our actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, our ability to continue as a going concern; our potential need to raise additional capital to fund our existing operations or develop and commercialize new services or expand our operations; our ability to achieve or maintain profitability; our ability to maintain compliance with our debt covenants in the future, or obtain required waivers from our lenders if future operating performance were to fall below current projections of if there are material changes to management’s assumptions, we could be required to recognize non-cash charges to operating earnings for goodwill and/or other intangible asset impairment; our ability to identify and develop successful new geographies, physician partners, payors and patients; changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to our services; our ability to fund our growth and expand our operations; changes in laws and regulations applicable to our business; our ability to maintain our relationships with health plans and other key payers; the impact of COVID-19, including the impact of new variants of the virus, or another pandemic, epidemic or outbreak of infectious disease on our business and results of operation; increased labor costs; our ability to recruit and retain qualified team members and independent physicians; and other factors discussed in Part I, Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 31, 2023, as updated by Part II, Item 1A. “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2023 to be filed with the SEC, and in the Company’s other filings with the SEC. All information in this press release is as of the date hereof, and we undertake no duty to update or revise this information unless required by law. You are cautioned not to place undue reliance on any forward-looking statements contained in this press release.

P3 HEALTH PARTNERS INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)

 

 

September 30, 2023

 

December 31, 2022

ASSETS

 

 

 

CURRENT ASSETS:

 

 

 

Cash

$

52,562

 

 

$

17,537

 

Restricted cash

 

4,878

 

 

 

920

 

Health plan receivable, net of allowance for credit losses of $150 and $0, respectively

 

117,200

 

 

 

72,092

 

Clinic fees, insurance and other receivable

 

2,225

 

 

 

7,500

 

Prepaid expenses and other current assets

 

2,799

 

 

 

2,643

 

TOTAL CURRENT ASSETS

 

179,664

 

 

 

100,692

 

Property and equipment, net

 

9,360

 

 

 

8,839

 

Intangible assets, net

 

687,875

 

 

 

751,050

 

Other long-term assets

 

19,993

 

 

 

15,990

 

TOTAL ASSETS (1)

$

896,892

 

 

$

876,571

 

LIABILITIES, MEZZANINE EQUITY and STOCKHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES:

 

 

 

Accounts payable

$

11,630

 

 

$

11,542

 

Accrued expenses and other current liabilities

 

20,957

 

 

 

16,647

 

Accrued payroll

 

5,629

 

 

 

8,224

 

Health plan settlements payable

 

35,422

 

 

 

13,608

 

Claims payable

 

155,497

 

 

 

151,207

 

Premium deficiency reserve

 

17,014

 

 

 

26,375

 

Accrued interest

 

21,153

 

 

 

14,061

 

TOTAL CURRENT LIABILITIES

 

267,302

 

 

 

241,664

 

Operating lease liability

 

13,556

 

 

 

11,516

 

Warrant liabilities

 

1,844

 

 

 

1,517

 

Contingent consideration

 

4,907

 

 

 

4,794

 

Long-term debt, net

 

108,252

 

 

 

94,421

 

TOTAL LIABILITIES (1)

 

395,861

 

 

 

353,912

 

COMMITMENTS AND CONTINGENCIES (Note 12)

 

 

 

MEZZANINE EQUITY:

 

 

 

Redeemable non-controlling interest

 

313,088

 

 

 

516,805

 

STOCKHOLDERS’ EQUITY:

 

 

 

Class A common stock, $.0001 par value; 800,000 shares authorized; 114,249 shares and 41,579 shares issued and outstanding, respectively

 

11

 

 

 

4

 

Class V common stock, $.0001 par value; 205,000 shares authorized; 198,354 shares and 201,592 shares issued and outstanding, respectively

 

20

 

 

 

20

 

Additional paid in capital

 

529,794

 

 

 

315,375

 

Accumulated deficit

 

(341,882

)

 

 

(309,545

)

TOTAL STOCKHOLDERS’ EQUITY

 

187,943

 

 

 

5,854

 

TOTAL LIABILITIES, MEZZANINE EQUITY & STOCKHOLDERS’ EQUITY

$

896,892

 

 

$

876,571

 

____________________

(1)

The Company’s condensed consolidated balance sheets include the assets and liabilities of its consolidated variable interest entities (“VIEs”). As discussed in Note 13 “Variable Interest Entities,” P3 LLC is itself a VIE. P3 LLC represents substantially all the assets and liabilities of the Company. As a result, the language and amounts below refer only to VIEs held at the P3 LLC level. The condensed consolidated balance sheets include total assets that can be used only to settle obligations of the P3 LLC’s VIEs totaling $11.1 million and $3.1 million as of September 30, 2023 and December 31, 2022, respectively, and total liabilities of the P3 LLC’s consolidated VIEs for which creditors do not have recourse to the general credit of the Company totaled $15.9 million and $9.9 million as of September 30, 2023 and December 31, 2022, respectively. These VIE assets and liabilities do not include $45.9 million and $33.0 million of net amounts due to affiliates as of September 30, 2023 and December 31, 2022, respectively, as these are eliminated in consolidation and not presented within the condensed consolidated balance sheets. See Note 13 “Variable Interest Entities.”

P3 HEALTH PARTNERS INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

OPERATING REVENUE:

 

 

 

 

 

 

 

Capitated revenue

$

285,153

 

 

$

243,988

 

 

$

909,473

 

 

$

780,775

 

Other patient service revenue

 

3,198

 

 

 

4,272

 

 

 

10,041

 

 

 

10,483

 

TOTAL OPERATING REVENUE

 

288,351

 

 

 

248,260

 

 

 

919,514

 

 

 

791,258

 

OPERATING EXPENSE:

 

 

 

 

 

 

 

Medical expense

 

279,220

 

 

 

254,777

 

 

 

867,061

 

 

 

788,046

 

Premium deficiency reserve

 

(12,489

)

 

 

(7,302

)

 

 

(9,361

)

 

 

(10,116

)

Corporate, general and administrative expense

 

33,065

 

 

 

37,863

 

 

 

97,931

 

 

 

117,560

 

Sales and marketing expense

 

654

 

 

 

1,118

 

 

 

2,512

 

 

 

3,391

 

Depreciation and amortization

 

21,721

 

 

 

21,815

 

 

 

65,041

 

 

 

65,287

 

Goodwill impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

851,456

 

TOTAL OPERATING EXPENSE

 

322,171

 

 

 

308,271

 

 

 

1,023,184

 

 

 

1,815,624

 

OPERATING LOSS

 

(33,820

)

 

 

(60,011

)

 

 

(103,670

)

 

 

(1,024,366

)

OTHER INCOME (EXPENSE):

 

 

 

 

 

 

 

Interest expense, net

 

(4,002

)

 

 

(2,963

)

 

 

(11,939

)

 

 

(8,418

)

Mark-to-market of stock warrants

 

755

 

 

 

(2,568

)

 

 

(327

)

 

 

3,386

 

Other

 

190

 

 

 

213

 

 

 

(455

)

 

 

173

 

TOTAL OTHER EXPENSE

 

(3,057

)

 

 

(5,318

)

 

 

(12,721

)

 

 

(4,859

)

LOSS BEFORE INCOME TAXES

 

(36,877

)

 

 

(65,329

)

 

 

(116,391

)

 

 

(1,029,225

)

PROVISION FOR INCOME TAXES

 

(412

)

 

 

—

 

 

 

(928

)

 

 

—

 

NET LOSS

 

(37,289

)

 

 

(65,329

)

 

 

(117,319

)

 

 

(1,029,225

)

LESS: NET LOSS ATTRIBUTABLE TO REDEEMABLE NON-CONTROLLING INTEREST

 

(23,993

)

 

 

(54,156

)

 

 

(85,008

)

 

 

(853,125

)

NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST

$

(13,296

)

 

$

(11,173

)

 

$

(32,311

)

 

$

(176,100

)

 

 

 

 

 

 

 

 

NET LOSS PER SHARE (Note 9):

 

 

 

 

 

 

 

Basic

$

(0.12

)

 

$

(0.27

)

 

$

(0.37

)

 

$

(4.24

)

Diluted

$

(0.12

)

 

$

(0.27

)

 

$

(0.41

)

 

$

(4.27

)

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (Note 9):

 

 

 

 

 

 

 

Basic

 

114,198

 

 

 

41,579

 

 

 

88,010

 

 

 

41,579

 

Diluted

 

312,679

 

 

 

243,036

 

 

 

288,379

 

 

 

241,263

 

P3 HEALTH PARTNERS INC. and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

Nine Months Ended September 30,

 

2023

 

2022

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

Net loss

$

(117,319

)

 

$

(1,029,225

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Depreciation and amortization

 

65,041

 

 

 

65,287

 

Equity-based compensation

 

4,259

 

 

 

17,211

 

Goodwill impairment

 

—

 

 

 

851,456

 

Amortization of original issue discount and debt issuance costs

 

405

 

 

 

—

 

Accretion of contingent consideration

 

113

 

 

 

291

 

Mark-to-market adjustment of stock warrants

 

327

 

 

 

(3,386

)

Premium deficiency reserve

 

(9,361

)

 

 

(10,116

)

Changes in assets and liabilities:

 

 

 

Health plan receivable

 

(45,258

)

 

 

(31,247

)

Clinic fees, insurance, and other receivable

 

5,275

 

 

 

(1,623

)

Prepaid expenses and other current assets

 

(429

)

 

 

3,462

 

Other long-term assets

 

(1,214

)

 

 

—

 

Accounts payable, accrued expenses, and other current liabilities

 

2,758

 

 

 

4,560

 

Accrued payroll

 

2,405

 

 

 

1,054

 

Health plan settlements payable

 

21,814

 

 

 

(1,922

)

Claims payable

 

4,290

 

 

 

32,747

 

Accrued interest

 

7,092

 

 

 

3,885

 

Operating lease liability

 

(348

)

 

 

3,501

 

Net cash used in operating activities

 

(60,150

)

 

 

(94,065

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

Purchases of property and equipment

 

(2,039

)

 

 

(2,283

)

Acquisitions, net of cash acquired

 

—

 

 

 

(5,500

)

Net cash used in investing activities

 

(2,039

)

 

 

(7,783

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

Proceeds from long-term debt, net of original issuance discount

 

14,101

 

 

 

—

 

Proceeds from private placement offering, net of offering costs paid

 

87,244

 

 

 

—

 

Repayment of short-term and long-term debt

 

—

 

 

 

(3,625

)

Payment of debt issuance costs

 

(173

)

 

 

—

 

Net cash provided by (used in) financing activities

 

101,172

 

 

 

(3,625

)

Net change in cash and restricted cash

 

38,983

 

 

 

(105,473

)

Cash and restricted cash, beginning of period

 

18,457

 

 

 

140,834

 

Cash and restricted cash, end of period

$

57,440

 

 

$

35,361

 

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA LOSS

(in thousands, except PMPM)

(unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

 

(in thousands)

Net loss

$

(37,289

)

 

$

(65,329

)

 

$

(117,319

)

 

$

(1,029,225

)

Interest expense, net

 

4,002

 

 

 

2,963

 

 

 

11,939

 

 

 

8,418

 

Depreciation and amortization expense

 

21,721

 

 

 

21,815

 

 

 

65,041

 

 

 

65,287

 

Provision for income taxes

 

412

 

 

 

—

 

 

 

928

 

 

 

—

 

Mark-to-market of stock warrants

 

(755

)

 

 

2,568

 

 

 

327

 

 

 

(3,386

)

Premium deficiency reserve

 

(12,489

)

 

 

(7,302

)

 

 

(9,361

)

 

 

(10,116

)

Equity-based compensation

 

2,251

 

 

 

1,784

 

 

 

4,259

 

 

 

17,211

 

Transaction and other related costs(1)

 

—

 

 

 

1,844

 

 

 

70

 

 

 

10,956

 

Other(2)

 

(185

)

 

 

1,350

 

 

 

—

 

 

 

851,456

 

Goodwill impairment

 

—

 

 

 

—

 

 

 

2,868

 

 

 

1,499

 

Adjusted EBITDA loss

$

(22,332

)

 

$

(40,307

)

 

$

(41,248

)

 

$

(87,900

)

Adjusted EBITDA loss PMPM

$

(71

)

 

$

(135

)

 

$

(44

)

 

$

(98

)

_____________________

(1)

Transaction and other related costs during the nine months ended September 30, 2023 consisted of legal fees incurred related to acquisition-related litigation.

(2)

Other during the three and nine months ended September 30, 2023 consisted of (i) interest income offset by (ii) cybersecurity incident loss with respect to the nine months ended September 30, 2023, (iii) restructuring and other charges, including severance and benefits paid to employees pursuant to workforce reduction plans with respect to the nine months ended September 30, 2023, (iv) the disposition of our Pahrump operations, (v) expenses for third-party consultants to assist us with the development, implementation, and documentation of new and enhanced internal controls and processes for compliance with Sarbanes-Oxley Section 404(b) with respect to the nine months ended September 30, 2023, (vi) a legal settlement outside of the ordinary course of business with respect to the nine months ended September 30, 2023, and (vii) valuation allowance on our notes receivable.

MEDICAL MARGIN

(in thousands, except PMPM)

(unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

 

(in thousands)

Capitated revenue

$

285,153

 

 

$

243,988

 

 

$

909,473

 

 

$

780,775

 

Less: medical claims expenses

 

(248,918

)

 

 

(235,065

)

 

 

(783,497

)

 

 

(725,267

)

Medical margin

$

36,235

 

 

$

8,923

 

 

$

125,976

 

 

$

55,508

 

Medical margin PMPM

$

115

 

 

$

30

 

 

$

135

 

 

$

62

 

RECONCILIATION OF GROSS PROFIT TO MEDICAL MARGIN

(in thousands)

(unaudited)

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

2023

 

2022

 

2023

 

2022

 

(in thousands)

Gross profit(1)

$

9,131

 

 

$

(6,517

)

 

$

52,453

 

 

$

3,212

 

Other patient service revenue

 

(3,198

)

 

 

(4,272

)

 

 

(10,041

)

 

 

(10,483

)

Other medical expense

 

30,302

 

 

 

19,712

 

 

 

83,564

 

 

 

62,779

 

Medical margin

$

36,235

 

 

$

8,923

 

 

$

125,976

 

 

$

55,508

 

_____________________

(1)

Effective for the quarter ended June 30, 2023, we modified the method by which we reconcile medical margin. Previously, we reconciled medical margin to operating loss as the most directly comparable measure calculated in accordance with GAAP. In the current period and on a go-forward basis we will reconcile to gross profit as we have determined that gross profit is the most directly comparable GAAP measure.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20231108788331/en/

Investor Relations Karen Blomquist Vice President, Investor Relations P3 Health Partners kblomquist@p3hp.org

Kassi Belz Executive Vice President, Communications P3 Health Partners (904) 415-2744 kbelz@p3hp.org