Agilon Health Inc. (NYSE:AGL) saw its stock plummet over 25% in pre-market trading Tuesday after reporting second-quarter results that missed expectations and withdrawing its full-year guidance amid executive turnover and mounting industry pressures.
The healthcare provider reported a quarterly net loss of $0.25 per share, more than double the analyst consensus estimate of $0.11. Revenue came in at $1.4 billion, falling short of the $1.47 billion forecast and down 6% year-over-year from $1.48 billion.
The weak performance came as the company announced a major leadership transition. Steven Sell has stepped down as President, CEO, and Director, while co-founder and Chairman Ronald A. Williams has been appointed Executive Chairman during the search for a new chief executive.
“It’s become clear that the industry headwinds are more acute than previously expected, and our enhanced data platform is providing visibility that indicates our 2024 and 2025 risk adjustment is also lower than previously expected, which is impacting near-term results,” said Williams in a statement.
Agilon’s quarterly performance was affected by $66 million in prior period development costs, including $20 million tied to exited markets and $13 million in Medicare Part D expenses. Additionally, the company saw a $37 million reduction in 2024 risk adjustment revenue and a further $48 million projected shortfall for 2025.
The company’s medical margin dropped sharply to negative $53 million, compared to a positive $106 million in the same quarter last year. Adjusted EBITDA losses also deepened to $83 million, compared to a $3 million loss a year ago.
At quarter-end, Agilon held $327 million in cash, cash equivalents, and marketable securities, with total debt standing at $35 million.
Citing the ongoing leadership transition, shifts in market dynamics, and the rollout of new performance visibility tools, Agilon has suspended its previously issued full-year 2025 guidance.
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