agilon health, inc 10-Q for FY2026 Q3
agilon health, inc. (AGL)
10-Q
2026-11-04
For: 2026-09-30
View Original
Added on
November 04, 2026
About this 10-Q
agilon health, inc filed this 10-Q on November 4, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
agilon health reported third-quarter revenue of $1.5 billion, up 6%, and net income of $35 million versus a net loss of $110 million. Adjusted EBITDA was $64 million, while the medical services expense ratio improved to 88.5% from 104.0%. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.52B
- up 5.9% from $1.44B a year earlier
- Net income
- $34.91M
- compared with a net loss of $110.21M a year earlier
- Diluted EPS
- $1.97
- compared with -$6.65 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________
FORM 10-Q
_______________________________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. | |||||
For the quarterly period ended September 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission file number 001-40332
_______________________________________________________
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
(Address of principal executive offices)
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
_______________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| x | Accelerated Filer | o | ||||||||||||
| Non-accelerated Filer | o | Smaller Reporting Company | ||||||||||||
| Emerging Growth Company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o No x
At October 29, 2026, there were 16,795,774 shares of the registrant’s $0.01 par value common stock outstanding.
agilon health, inc.
INDEX
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
agilon health, inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
| September 30, 2026 | December 31, 2025 | ||||||||||
| (unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash and equivalents | |||||||||||
| Marketable securities | |||||||||||
| Receivables, net | |||||||||||
| Prepaid expenses and other current assets, net | |||||||||||
| Total current assets | |||||||||||
| Property, equipment, and capitalized software, net | |||||||||||
| Intangible assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||
| Current liabilities: | |||||||||||
| Medical claims and related payables | $ | $ | |||||||||
| Accounts payable and accrued expenses | |||||||||||
| Current debt | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' equity (deficit): | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive income (loss) | ( | ||||||||||
| Total stockholders’ equity (deficit) | |||||||||||
| Total liabilities and stockholders’ equity (deficit) | $ | $ | |||||||||
The condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”) as agilon health, inc., together with its consolidated subsidiaries and VIEs (the “Company”), is the primary beneficiary of these VIEs. As of September 30, 2026 and December 31, 2025, the condensed consolidated balance sheets included total assets of the Company’s consolidated VIEs totaling $1.15 billion and $840.2 million, respectively, and total liabilities totaling $1.18 billion and $1.04 billion, respectively. See Note 12 for additional discussion related to the Company's consolidated VIEs.
See accompanying Notes to the Condensed Consolidated Financial Statements.
3
agilon health, inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Medical services revenue | $ | $ | $ | $ | |||||||||||||||||||
| Other operating revenue | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Medical services expense | |||||||||||||||||||||||
| Other medical expenses | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Income (loss) from operations | ( | ( | |||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Income (loss) from equity method investments | ( | ||||||||||||||||||||||
| Other income (expense), net | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Income (loss) before income taxes | ( | ( | |||||||||||||||||||||
| Income tax benefit (expense) | ( | ( | |||||||||||||||||||||
| Income (loss) from continuing operations | ( | ( | |||||||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||
| Adjustments on sale of assets, net | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Basic earnings per common share: | |||||||||||||||||||||||
| Continuing operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted earnings per common share: | |||||||||||||||||||||||
| Continuing operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
4
agilon health, inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Net unrealized gain (loss) on marketable securities, net of tax | ( | ( | |||||||||||||||||||||
| Foreign currency translation adjustment | |||||||||||||||||||||||
| Total comprehensive income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
5
agilon health, inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands)
(unaudited)
For the three months ended September 30, 2026:
| Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| July 1, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Shares withheld related to net share settlement | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
For the three months ended September 30, 2025:
| Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| July 1, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||
| Vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Shares withheld related to net share settlement | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| September 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
6
agilon health, inc.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands)
(unaudited)
For the nine months ended September 30, 2026:
| Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||
| January 1, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Exercise of stock options | — | — | |||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | ( | — | — | ||||||||||||||||||||||||||||||||
| Shares withheld related to net share settlement | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||
| September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
For the nine months ended September 30, 2025:
| Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| January 1, 2025 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units | ( | — | — | ||||||||||||||||||||||||||||||||||||||
| Shares withheld related to net share settlement | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| September 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
7
agilon health, inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | $ | ( | ||||||||
| Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation expense | |||||||||||
| Loss (income) from equity method investments | ( | ( | |||||||||
| Adjustments on sale of assets, net | ( | ( | |||||||||
| Other, net | ( | ||||||||||
| Changes in operating assets and liabilities | ( | ||||||||||
| Net cash provided by (used in) operating activities | ( | ||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property, equipment, and capitalized software | ( | ( | |||||||||
| Purchase of intangible assets | ( | ( | |||||||||
| Investment in loans receivable and other | ( | ||||||||||
| Investments in marketable securities | ( | ||||||||||
| Proceeds from maturities of marketable securities and other | |||||||||||
| Net cash provided by (used in) investing activities | |||||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from (payments for) equity issuances, net | ( | ||||||||||
| Debt issuance costs | ( | ||||||||||
| Repayments of long-term debt | ( | ||||||||||
| Net cash provided by (used in) financing activities | ( | ( | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash and equivalents | ( | ||||||||||
| Cash, cash equivalents and restricted cash and equivalents, beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash and equivalents, end of period | $ | $ | |||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
8
agilon health, inc.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. Business | ||
Description of Business
agilon health, inc., together with its consolidated subsidiaries and VIEs (the “Company”), through its partnerships and purpose-built model, provides the necessary capabilities, capital, and business model for existing physician groups to create a Medicare-centric, globally capitated line of business. As of September 30, 2026, the Company, through its contracted physician networks, provided care to approximately 453,600 Medicare Advantage members enrolled with private health plans. Additionally, the Company participates in the Centers for Medicare & Medicaid Services’ (“CMS”) Accountable Care Organization Realizing Equity, Access, and Community Health (“ACO REACH”) Model and Medicare Shared Savings Program (“MSSP,” and together with ACO REACH, the “CMS ACO Models”) through its equity method investments.
The Company’s largest shareholder is an investment fund associated with Clayton Dubilier & Rice, LLC (“CD&R”), a private equity firm. All funds affiliated with CD&R are considered related parties.
Reverse Stock Split
On March 30, 2026, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-25 reverse stock split of the Company’s issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each twenty-five shares of common stock issued and outstanding was automatically reclassified, combined, and converted into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to receive fractional shares automatically became entitled to receive cash in lieu of such fractional share. Proportional adjustments were made to the number of shares of common stock awarded and available for issuance under the Company’s equity incentive plans, as well as the exercise price and the number of shares issuable upon the exercise or conversion of the Company’s outstanding stock options and other equity securities under the Company’s equity incentive plans. The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock. All common stock, stock options, restricted stock units, and per share information presented within these condensed consolidated financial statements have been adjusted to reflect the Reverse Stock Split on a retroactive basis for all periods presented.
NOTE 2. Summary of Significant Accounting Policies | ||
Basis of Presentation
Use of Estimates
Management is required to make estimates and assumptions in the preparation of financial statements. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses
9
during the reporting period. Significant estimates can include, among other things, those used to determine revenues and related receivables from risk adjustments, and medical services expense and related payables (including the reserve for incurred but not reported (“IBNR”) claims). Management’s estimates for revenue recognition, medical services expense, and other estimates, judgments, and assumptions, may be materially and adversely different from actual results. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates.
Income Taxes
The Company determines the income tax provision for interim periods using an estimate of the Company’s annual effective tax rate, applied to year-to-date results, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimated annual effective tax rate, and if the estimated annual effective tax rate changes, a cumulative catch-up adjustment is recorded in that quarter. The Company applied the intra-period tax allocation rules to allocate income taxes between continuing operations and discontinued operations as prescribed in U.S. GAAP, where the tax effect of income (loss) before income taxes from continuing operations is computed without regard to the tax effects of income (loss) before income taxes from the other categories.
Segment Reporting
Discontinued operations
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). The amendments in ASU 2024-03 require public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items by breaking down certain expense line items into specified natural expense categories, including purchases of inventory,
10
employee compensation, depreciation, intangible asset amortization, and depletion. The amendments in ASU 2024-03 can be applied on a prospective basis or retrospective basis and early adoption is permitted. The amendments in ASU 2025-01 clarify the effective date of ASU 2024-03 stating that all public business entities are required to adopt the update in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. ASU 2025-01 does not change the effective date of ASU 2024-03 but was issued to provide clarity on the effective date for public business entities that do not have a calendar year-end. The Company is currently evaluating the potential impact of the adoption of ASU 2024-03 and ASU 2025-01 on the disclosures in its condensed consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments in ASU 2025-06 modernize the guidance in Subtopic 350-40 to reflect the software development approaches currently used as software is not always developed in a linear manner. To clarify how the guidance applies to both linear and nonlinear software development, the amendments in ASU 2025-06 remove all references to the “development stages” from Subtopic 350-40 and instead requires that software development costs be capitalized when (i) management, with relevant authority, commits to funding a computer software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in ASU 2025-06 also provide new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met and specifies that the disclosure requirements in Subtopic 360-10, Property, Plant, and Equipment—Overall, are required for all capitalized internal-use software costs. The amendments in ASU 2025-06 are effective for annual reporting periods beginning after December 31, 2027, and interim reporting periods within those annual reporting periods. The amendments in ASU 2025-06 can be applied on a prospective, retrospective, or modified transition approach basis. The new guidance is not expected to have a material impact on the Company’s consolidated financial position, results of operations, cash flows, or disclosures.
NOTE 3. Revenue, Receivables, and Concentration of Credit Risk | ||
Medical Services Revenue
Medical services revenue consists of capitation fees under contracts with various Medicare Advantage payors (“payors”). These contracts are within the scope of Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), and therefore the Company applies the following five-step model when recognizing revenue:
i.Identify the contract(s) with a customer;
ii.Identify the performance obligations in the contract;
iii.Determine the transaction price;
iv.Allocate the transaction price to the performance obligations in the contract; and
v.Recognize revenue when, or as, the performance obligation is satisfied.
Under the typical capitation arrangement, the Company is entitled to monthly per-member, per-month (“PMPM”) fees to provide a defined range of healthcare services for Medicare Advantage health plan members (“members”) attributed to the Company’s contracted primary care physicians (“PCPs”). In certain of the Company’s payor arrangements, it is also financially responsible for Medicare Part D pharmaceutical costs for prescriptions rendered to members. PMPM fees are based on a percentage of premium that payors receive from the CMS for these members. The Company generally accepts full financial risk for members attributed to its contracted PCPs and therefore is responsible for the cost of all healthcare services required by those members. Fees are generally recorded gross in revenue because the Company is acting as a principal in coordinating and controlling the range of services provided (other than clinical decisions) under its capitation contracts with payors.
Capitation contracts with payors are generally multi-year arrangements and have a single performance obligation that constitutes a series, as defined by ASC 606, to stand ready on a monthly basis to provide all aspects of necessary medical care to members for the contracted period. The Company recognizes revenue in the month in which eligible members are entitled to receive healthcare benefits during the contract term.
The transaction price for the Company’s capitation contracts is variable, as the PMPM fees to which the Company is entitled are subject to periodic adjustment under CMS’s risk adjustment payment methodology. CMS deploys a risk adjustment model that determines premiums paid to all payors according to each member’s health status and certain
11
demographic factors. Under this risk adjustment methodology, CMS calculates the risk adjusted premium payment using diagnosis data from various settings. The Company and healthcare providers collect and submit the necessary and available diagnosis data to payors and such data is utilized by the Company to estimate risk adjustment payments to be received in subsequent periods. Estimating variable consideration related to risk adjustment involves judgment. Risk adjustment-related revenues are estimated using the most likely amount method. In determining the amount of variable consideration to include in the transaction price, the Company evaluates whether such estimates are constrained by assessing the likelihood and magnitude of a potential revenue reversal when uncertainties are resolved. This assessment considers factors such as the completeness and accuracy of diagnosis data submitted, historical experience with risk adjustment settlements, the extent of remaining uncertainty in CMS’s final calculations, contractual terms including risk corridors and settlement provisions, and the time period until such uncertainties are resolved. The Company includes variable consideration in revenue only to the extent that it is probable that a significant reversal of cumulative revenue will not occur once any such uncertainty is resolved. The Company’s estimates of variable consideration are subject to variability due to the range of possible outcomes associated with CMS’s final risk adjustment settlements, which are typically not issued until 12 to 18 months after the start of the performance year. As actual amounts may differ from estimates, the Company reassesses these estimates each reporting period as additional information becomes available and any changes in estimates are recognized as adjustments to medical services revenue in the period the change is identified.
PMPM fees are also subject to adjustment for incentives or penalties based on the achievement of certain quality metrics defined in the Company’s contracts with payors. Estimating incentive revenue also requires judgment. The Company recognizes incentive revenue using the most likely amount method and applies a similar constraint assessment, including consideration of historical performance against quality measures, current performance trends, and remaining measurement uncertainty. Incentive revenue is recognized as the performance obligation is satisfied and only to the extent that it is probable that a significant reversal of incentive revenue will not occur once any such uncertainty is resolved.
Neither the Company nor any of its affiliates is a registered insurance company because state law in the states in which it operates does not require such registration for risk-bearing providers.
Receivables
Concentration
The Company contracts with various payors whereby the Company is entitled to monthly PMPM fees to provide a defined range of healthcare services for members attributed to its contracted PCPs. The Company generally accepts full financial risk for such members and therefore is responsible for the cost of all healthcare services required by them. Substantially all of the Company’s receivable balances are from a small number of payors. Revenue from Medicare Advantage payors constitutes substantially all of the Company’s total revenue for the three and nine months ended September 30, 2026 and 2025. Estimating revenue earned from these payors requires judgment, and changes to these estimates related to prior years were not material to total medical services revenue recognized for the three and nine months ended September 30, 2026 and 2025.
12
The following table provides the Company’s revenue concentrations with respect to major payors as a percentage of the Company’s total revenues:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Payor A | % | % | % | % | |||||||||||||||||||
| Payor B | % | % | % | % | |||||||||||||||||||
| Payor C | % | % | * | % | |||||||||||||||||||
| Payor E | * | % | * | % | |||||||||||||||||||
*Less than 10% of total revenues.
The following table provides the Company’s concentrations of credit risk with respect to major payors as a percentage of receivables, net:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Payor A | % | * | |||||||||
| Payor B | % | * | |||||||||
| Payor C | * | % | |||||||||
| Payor D | % | % | |||||||||
| Payor E | % | % | |||||||||
| Payor F | * | % | |||||||||
*Less than 10% of total receivables.
NOTE 4. Marketable Securities and Fair Value Measurements | ||
Marketable Securities
The following table summarizes the Company’s marketable securities (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
| U.S. Treasury notes | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| $ | $ | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
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For the three months ended September 30, 2026, the Company recognized total interest income (included in other income (expense), net in the condensed consolidated statements of operations) of $2.2 million, of which $0.8 million was related to its marketable securities investments and $1.4 million was related to interest on cash and cash equivalent balances. For the three months ended September 30, 2025, the Company recognized total interest income (included in other income (expense), net in the condensed consolidated statements of operations) of $3.8 million, of which $2.3 million was related to its marketable securities investments and $1.5 million was related to interest on cash and cash equivalent balances. For the nine months ended September 30, 2026, the Company recognized total interest income (included in other income (expense), net in the condensed consolidated statements of operations) of $7.6 million, of which $3.4 million was related to its marketable securities investments and $4.2 million was related to interest on cash and cash equivalent balances. For the nine months ended September 30, 2025, the Company recognized total interest income (included in other income (expense), net in the condensed consolidated statements of operations) of $11.7 million, of which $8.0 million was related to its marketable securities investments and $3.7 million was related to interest on cash and cash equivalent balances.
The following table summarizes the Company’s marketable securities maturity as of September 30, 2026 (in thousands):
| Year | Amortized Cost | Fair Value | ||||||||||||
| 2026 | $ | $ | ||||||||||||
| 2027 | ||||||||||||||
| 2028 | ||||||||||||||
| $ | $ | |||||||||||||
The following table summarizes the Company’s marketable securities with gross unrealized losses by security type aggregated by the length of time the investments have been in a continuous unrealized loss position as of September 30, 2026 (in thousands):
| Less Than 12 Months | 12 Months or Greater | ||||||||||||||||||||||
| Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||
| U.S. Treasury notes | $ | $ | $ | $ | |||||||||||||||||||
The following table summarizes the Company’s marketable securities with gross unrealized losses by security type aggregated by the length of time the investments have been in a continuous unrealized loss position as of December 31, 2025 (in thousands):
| Less Than 12 Months | 12 Months or Greater | ||||||||||||||||||||||
| Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | |||||||||||||||||||
| U.S. Treasury notes | |||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||
The Company’s unrealized losses from marketable securities as of September 30, 2026 and December 31, 2025 were caused primarily by interest rate increases. There was no
Fair Value Measurements
The Company’s financial instruments consist of cash and cash equivalents, restricted cash and equivalents, marketable securities, receivables, other liabilities, accounts payable, certain accrued expenses, and borrowings which consist of a term loan and a revolving credit facility. The carrying values of the financial instruments classified as current in the condensed consolidated balance sheets approximate their fair values due to their short-term maturities. The fair values of the term loan and revolving credit facility approximate the carrying values because the interest rates on such
14
borrowings approximate market rates as of the reporting date. Such borrowings are classified within Level 2 of the fair value hierarchy. During the three and nine months ended September 30, 2026 and 2025, there were no material transfers of financial assets or liabilities within the fair value hierarchy.
The Company measures and discloses the fair value of nonfinancial and financial assets and liabilities utilizing a hierarchy of valuation techniques based on whether the inputs to a fair value measurement are considered to be observable or unobservable in a marketplace. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. This hierarchy requires the use of observable market data when available. These inputs have created the following fair value hierarchy:
•Level 1—quoted prices for identical instruments in active markets;
•Level 2—quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
•Level 3—fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
The table below summarizes the Company’s financial instruments measured at fair value on a recurring basis (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
| Marketable securities: | |||||||||||||||||||||||||||||||||||
| Corporate debt securities | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| U.S. Treasury notes | |||||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
NOTE 5. Other Assets | ||
The following table summarizes the Company’s other assets (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Loans to physician partners | $ | $ | |||||||||
| Health plan deposits | |||||||||||
Equity method investments(1) | |||||||||||
| Right-of-use lease assets | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
___________________________________________
(1)See Note 12 for additional discussion related to the Company's equity method investments related to the Company’s CMS ACO Models investments.
Loans to Physician Partners
NOTE 6. Medical Claims and Related Payables | ||
Medical services expense represents costs incurred for medical services provided to members by physicians, hospitals and other ancillary providers for which the Company is financially responsible and are paid by payors with whom the Company has contracted. Medical services expenses are recognized in the period in which services are provided and
15
include estimates of claims that have been incurred but have either not yet been received, processed, or paid and as such, not reported.
Such estimates are developed using actuarial methods commonly used by health insurance actuaries that include a number of factors and assumptions including medical service utilization trends, changes in membership, observed medical cost trends, historical claim payment patterns and other factors. Generally, for the most recent months, the Company estimates claim costs incurred by applying observed medical cost trend factors to the average PMPM medical costs incurred in prior months for which more complete claims data are available.
Each period, the Company re-examines previously established medical claims payable estimates based on actual claim submissions and other changes in facts and circumstances. As more complete claims information becomes available, the Company adjusts its estimates and recognizes those changes in estimates in the period in which the change is identified. The difference between the estimated liability and the actual settlements of claims is recognized in the period the claims are settled. The Company’s medical claims payable balance represents management’s best estimate of its liability for unpaid medical costs as of September 30, 2026 and 2025. The Company uses judgment to determine the appropriate assumptions for developing the required estimates.
The following table presents the components of changes in medical claims and related payables (in thousands):
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Medical claims and related payables, beginning of the year | $ | $ | |||||||||
| Components of incurred costs related to: | |||||||||||
| Current year | |||||||||||
| Prior years | ( | ||||||||||
| Claims paid related to: | |||||||||||
| Current year | ( | ( | |||||||||
| Prior years | ( | ( | |||||||||
| ( | ( | ||||||||||
| Medical claims and related payables, end of the period | $ | $ | |||||||||
Medical claims and related payables also include $10.5 million and $34.5 million, as of September 30, 2026 and December 31, 2025, respectively, that is recoverable from other parties under risk sharing arrangements and is presented as prepaid expenses and other current assets, net in the condensed consolidated balance sheets.
NOTE 7. Other Liabilities | ||
The following table summarizes the Company’s other liabilities (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Other long-term contingencies | $ | $ | |||||||||
| L | |||||||||||
Equity method liabilities – CMS ACO Models(1) | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
(1)See Note 12 for additional discussion related to the Company's equity method liabilities related to its CMS ACO Models investments.
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NOTE 8. Debt | ||
On February 18, 2021, the Company executed a credit facility agreement (as amended by the First Amendment to Credit Agreement, dated as of March 1, 2021, the Second Amendment to Credit Agreement, dated as of May 25, 2023, the Third Amendment to Credit Agreement, dated as of February 12, 2026 (the “Third Amendment”), and the Fourth Amendment to Credit Agreement, dated as of April 9, 2026, the “Credit Agreement”), which includes: (i) a secured term loan facility (the “Secured Term Loan Facility”) and (ii) a senior secured revolving credit facility (the “Secured Revolving Facility,” and together with the Secured Term Loan Facility, the “Credit Facility”). The Third Amendment, among other changes, (a) extended the stated maturity date from February 18, 2026 to February 18, 2028; (b) amended certain covenant “baskets” to be measured as a percentage of EBITDA rather than, or as an alternative to, Consolidated Total Assets; (c) required that the Company maintains a minimum of $50.0 million in Total Cash as of the end of each Business Day; (d) conditioned certain payments, including dividends, to Holdings under the available amount “basket” on the Company achieving positive EBITDA for two consecutive trailing four-quarter periods each ending after the Third Amendment effective date; (e) required that any reduction in outstanding letters of credit be accompanied by a corresponding prepayment of term loans; (f) reduced the aggregate amount of revolving credit commitments from $100.0 million to $90.0 million; and (g) required cash collateralization at 103 % of the amount of each letter of credit outstanding (recorded as restricted cash and equivalents on the condensed consolidated balance sheets). Concurrently with the effectiveness of the Third Amendment, the Company executed and delivered an unsecured guaranty of management’s obligations under the Credit Agreement. All capitalized terms used herein, but not defined herein, shall have the meanings ascribed to such terms in the Third Amendment.
As of September 30, 2026, the Company had $31.5 million outstanding under the Secured Term Loan Facility and availability under the Secured Revolving Facility was $20.3 million, as the Company had outstanding letters of credit totaling $69.7 million. The standby letters of credit are automatically extended without amendment for one-year periods, unless the Company notifies the institution in advance of the expiration date that the letter will be terminated. No amounts have been drawn on the outstanding letters of credit as of September 30, 2026.
The Secured Overnight Financing Rate (“SOFR”) is used as a benchmark interest rate in accordance with the Credit Agreement. At the Company’s option, borrowings under the Credit Facility can be either: (i) Term SOFR Rate Loans, (ii) Daily Simple SOFR Rate Loans, or (iii) Base Rate Loans, each as defined in the Credit Agreement. Daily Simple SOFR Rate Loans and Term SOFR Rate Loans bear interest at a rate equal to the sum of 3.50 % and the higher of (a) SOFR, as defined in the Credit Agreement, and (b) 0 %. Base Rate Loans bear interest at a rate equal to the sum of 2.50 % and the highest of: (a) 0.50 % in excess of the overnight federal funds rate, (b) the prime rate established by the administrative agent from time to time, (c) the one-month SOFR rate (adjusted for maximum reserves) plus 1.00 % and (d) 0 %. Additionally, the Company pays a commitment fee on the unfunded Secured Revolving Facility amount of 0.375 %. The Company must also pay customary letter of credit fees. As of September 30, 2026, the effective interest rate on the Secured Term Loan Facility was 10.469 %.
The Credit Facility is guaranteed by certain of the Company’s subsidiaries, including those identified as VIEs, and contains customary covenants including, among other things, limitations on restricted payments including: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios. Failure to meet any of these covenants could result in an event of default under the Credit Agreement. If an event of default occurs, the lenders could elect to declare all amounts outstanding under the Credit Agreement to be immediately due and payable. As of September 30, 2026, the Company was in compliance with all covenants under the Credit Facility.
As of September 30, 2026, the Company had $32.4 million outstanding surety bonds related to health plan payor risk-bearing capital contributions.
NOTE 9. Commitments and Contingencies | ||
Legal Proceedings
From time to time, the Company is a party to, or has a significant relationship to, legal proceedings, lawsuits, and other claims that arise in the ordinary course of the Company's business. Except as described below, the Company is not aware of any other legal proceedings or claims that it believes may have, individually or taken together, a material adverse effect on the Company's business, prospects, financial condition, results of operations or cash flows. The Company’s policy is to expense legal costs as they are incurred.
17
In February and March 2024, three putative securities class action lawsuits were filed and subsequently consolidated as In re agilon health, inc. Securities Litigation, No. 1:24-cv-00297 (W.D. Tex.) (the “Consolidated Securities Matter”). The Consolidated Securities Matter names the Company and certain current and former executive officers and directors of the Company, among others as defendants and asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended (the “Securities Act”) based on alleged misstatements between April 2021 and February 2024 in the Company’s annual and quarterly reports, investor presentations and earnings releases concerning, among other things, financial guidance, medical margin, Adjusted EBITDA, growth strategy, and data management. The Consolidated Securities Matter seeks compensatory damages, judgment interest, attorney’s fees and costs, and other unspecified equitable and/or injunctive relief. In August 2025, the court dismissed certain claims, including all Securities Act claims and portions of the Exchange Act claims, and allowed others to proceed. Discovery is ongoing. On April 6, 2026, Plaintiffs filed a motion for class certification. Defendants filed their opposition to the motion on June 29, 2026, and the parties have since submitted an additional briefing. The Court held a hearing on the motion on October 21, 2026, and the motion remains pending.
In May and October 2024, two putative stockholder derivative actions were filed and subsequently consolidated as In re agilon health, inc. Shareholder Derivative Litigation, No. 1:24-cv-00531 (W.D. Tex.) (the “Consolidated Derivative Matter”). On April 23, 2026, the lead plaintiffs filed an amended complaint, which names the Company and certain current and former executive officers and directors of the Company as defendants, along with CD&R Vector Holdings, L.P. Plaintiffs in the Consolidated Derivative Matter generally assert claims under Sections 14(a), 10(b) and 20(a) of the Exchange Act, as well as common law claims including breach of fiduciary duty, among others, based on allegations similar to those in the Consolidated Securities Matter. The Consolidated Derivative Matter seeks damages, corporate governance reforms, restitution, contribution under Section 21D of the Exchange Act, attorney’s fees and costs, and other relief. Defendants filed a motion to dismiss the amended complaint on June 24, 2026. The motion remains pending.
On December 31, 2025, a putative securities class action, Vandersluis v. agilon health, Inc., No. 1:25-cv-07167 (E.D.N.Y.), was filed, naming the Company and certain current and former executive officers and directors of the Company as defendants. The complaint asserts claims under Sections 10(b) and 20(a) of the Exchange Act based on alleged misstatements between February and August 2025 in the Company’s quarterly reports and earnings releases related to, among other things, the Company’s financial guidance, medical margin and Adjusted EBITDA results and seeks damages on behalf of a purported class of stockholders. Plaintiffs filed an amended complaint on June 29, 2026. Defendants filed a motion to dismiss the amended complaint on August 28, 2026.
On February 12, 2026, a putative stockholder derivative action lawsuit, Sinha v. Sell et al., No. 1:26-cv-00846 (E.D.N.Y.) (“Sinha”), was filed, naming the Company and certain current and former executive officers and directors of the Company as defendants. Sinha asserts claims under Sections 14(a) and 10(b) of the Exchange Act, as well as common law claims including breach of fiduciary duty, among others, in connection with statements made between February 2025 and August 2025 in the Company’s quarterly reports and earnings releases related to, among other things, the Company’s financial guidance, medical margin, and Adjusted EBITDA results. Sinha seeks corporate governance reforms, restitution, attorney’s fees and costs, and other relief. The parties have entered into a stipulation to stay this lawsuit until the earlier of dismissal of the related securities class action (Vandersluis) or the close of discovery in that action.
The Company intends to vigorously defend the foregoing matters; however, at this time, the Company is unable to predict the outcome or reasonably estimate a range of possible loss.
NOTE 10. Net Income (Loss) Per Common Share | ||
Basic net income (loss) per common share (“EPS”) is computed based upon the weighted average number of common shares outstanding. Diluted net income (loss) per common share is computed based upon the weighted average number of common shares outstanding plus the impact of common shares issuable from the assumed conversion of stock options, certain performance restricted stock units, and unvested restricted stock units. Only those instruments having a dilutive impact on basic net income (loss) per share are included in diluted net income (loss) per share during the periods presented.
18
The following table illustrates the computation of basic and diluted EPS (in thousands, except per share amounts):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Income (loss) from discontinued operations | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Denominator | |||||||||||||||||||||||
| Weighted average shares outstanding – basic | |||||||||||||||||||||||
| Weighted average shares outstanding – diluted | |||||||||||||||||||||||
| Basic earnings per common share: | |||||||||||||||||||||||
| Continuing operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Diluted earnings per common share: | |||||||||||||||||||||||
| Continuing operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Discontinued operations | |||||||||||||||||||||||
| Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Number of antidilutive stock options and restricted stock excluded from computation | |||||||||||||||||||||||
NOTE 11. Supplemental Cash Flow Information | ||
The following table provides supplemental cash flow information (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Supplemental cash flow information: | |||||||||||
| Interest paid | $ | $ | |||||||||
| Income taxes paid | |||||||||||
| Supplemental disclosure of non-cash investing and financing activities: | |||||||||||
| Right-of-use asset obtained in exchange for new operating lease liability | |||||||||||
The following table summarizes cash, cash equivalents and restricted cash equivalents (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash and equivalents | |||||||||||
| Cash, cash equivalents and restricted cash equivalents | $ | $ | |||||||||
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NOTE 12. Variable Interest Entities | ||
Consolidated Variable Interest Entities
agilon health, inc.’s consolidated assets and liabilities as of September 30, 2026 and December 31, 2025 include certain assets of VIEs that can only be used to settle the liabilities of the related VIE. The VIE creditors do not have recourse to agilon health, inc.
agilon health, inc.’s consolidated assets and liabilities include VIE assets and liabilities as follows (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Receivables, net | |||||||||||
| Prepaid expenses and other current assets, net | |||||||||||
| Property and equipment, net | |||||||||||
| Intangible assets, net | |||||||||||
| Other assets, net | |||||||||||
| Liabilities | |||||||||||
| Medical claims and related payables | |||||||||||
| Accounts payable and accrued expenses | |||||||||||
| Other liabilities | |||||||||||
Risk-bearing Entities. At September 30, 2026, the Company operates 32 wholly-owned risk-bearing entities (“RBEs”) for the purpose of entering into risk-bearing contracts with payors. Each RBE’s equity at risk is considered insufficient to finance its activities without additional support, and, therefore, each RBE is considered a VIE. The Company consolidates the RBEs as it has determined that it is the primary beneficiary because it has: (i) the ability to control the activities that most significantly impact the RBEs’ economic performance; and (ii) the obligation to absorb losses or right to receive benefits that could potentially be significant to the RBEs. Specifically, the Company has the unilateral ability and authority, through the RBE governance and management agreements, to make significant decisions about strategic and operating activities of the RBEs, including negotiating and entering into risk-bearing contracts with payors, and approving the RBEs’ annual operating budgets. The Company also has the obligation to fund losses of the RBEs and the right to receive a significant percentage of any financial surplus generated by the RBEs. The assets of the RBEs primarily consist of cash and cash equivalents, receivables, net, intangible assets, net, and other assets. Its obligations primarily consist of medical claims and related payables as well as operating expenses of the RBEs (accounts payable and accrued expenses), including incentive compensation obligations to the Company’s physician partners. On February 18, 2021, the Company executed the Credit Facility, which is guaranteed by certain of the Company’s VIEs. Assets generated by the RBEs (primarily from medical services revenues) may be used, in certain limited circumstances, to settle the Company’s contractual debt obligations.
Unconsolidated Variable Interest Entities
As of September 30, 2026, the Company had 10 equity method investments (liabilities), including eight wholly-owned CMS ACO Models entities discussed below, that were deemed to be VIEs. The Company has determined that the activities that most significantly impact the performance of these VIEs consist of the allocation of resources to and other decisions related to clinical activities and provider contracting decisions. Because the Company does not have the ability to control these activities due to another party’s control of the VIEs’ board of directors, the Company has determined that it is not the primary beneficiary of and therefore does not consolidate these VIEs. The Company provided support to assist its CMS ACO Models investments in obtaining surety bonds related to risk-bearing capital contributions to CMS. As of September 30, 2026 and December 31, 2025, the CMS ACO Models investments had $95.1 million and $131.6 million, respectively, of outstanding surety bonds. The Company's maximum loss exposure as a result of the Company’s involvement with the unconsolidated VIEs cannot be quantified as the Company has the obligation to provide ongoing operational support to the unconsolidated VIEs, as needed.
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Equity Method Investments
The following table summarizes the Company’s equity method investees (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
Equity method investments - Other(1) | $ | $ | |||||||||
Equity method investments - CMS ACO Models(1) | |||||||||||
Equity method liabilities - CMS ACO Models(2) | ( | ( | |||||||||
___________________________________________
(1)Included in Other assets, net in the condensed consolidated balance sheets.
(2)Included in Other liabilities in the condensed consolidated balance sheets.
At September 30, 2026, the Company is a partner in eight wholly-owned CMS ACO Models investments in collaboration with 12 of its physician group partners operating in 12 geographies. The combined summarized operating results of the Company’s CMS ACO Models investments are as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Medical services revenue | $ | $ | $ | $ | |||||||||||||||||||
| Medical services expense | ( | ( | ( | ( | |||||||||||||||||||
Other medical expenses(1) | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) from operations(2) | ( | ||||||||||||||||||||||
Net income (loss)(3) | ( | ||||||||||||||||||||||
___________________________________________
(1)The three months ended September 30, 2026 and 2025, includes physician incentive expenses of $17.0 million and $26.6 million, respectively. The nine months ended September 30, 2026 and 2025, includes physician incentive expenses of $58.5 million and $63.2 million, respectively.
(2)The three months ended September 30, 2026 and 2025, includes operating expenses for services provided by the Company of $14.4 million and $3.7 million, respectively. The nine months ended September 30, 2026 and 2025, includes operating expenses for services provided by the Company of $39.3 million and $12.1 million, respectively.
(3)Included in Income (loss) from equity method investments in the condensed consolidated statements of operations.
The combined summarized balance sheet of the Company’s CMS ACO Models investments are as follows (in thousands):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Current assets | $ | $ | |||||||||
| Noncurrent assets | |||||||||||
| Total assets | |||||||||||
| Current and total liabilities | |||||||||||
21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
All references in this report to “agilon,” “the Company”, “we,” “us” or “our” mean agilon health, inc., together with its consolidated subsidiaries. Unless the context suggests otherwise, references to “agilon health, inc.” mean the parent company without its subsidiaries.
Cautionary Language Regarding Forward-Looking Statements
Statements in this Quarterly Report on Form 10-Q (the “Report”) that are not historical factual statements are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or the negative versions of these words or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. They appear in several places throughout this Report and include, without limitation, statements regarding our intentions, beliefs, assumptions or current expectations concerning, among other things, our financial position, results of operations, cash flows, prospects, growth strategies, and our management transition.
Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be outside our control. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Report, we caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this Report. In addition, even if our results of operations, financial condition, and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this Report, those results or developments may not be indicative of results or developments in subsequent periods. You are therefore cautioned not to place undue reliance on the forward-looking statements included in this Report. A number of important factors, including, without limitation, the risks and uncertainties discussed under Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. Furthermore, new risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Report. Factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:
•our history of net losses and the expectation that our expenses will increase in the future;
•failure to identify and develop successful new geographies, physician partners and payors, or execute upon our growth initiatives;
•success in executing our operating strategies or achieving results consistent with our historical performance;
•medical expenses incurred on behalf of our members may exceed revenues we receive;
•our ability to maintain and secure additional contracts with Medicare Advantage (“MA”) payors on favorable terms, if at all;
•our ability to grow new physician partner relationships sufficient to recover startup costs;
•availability of additional capital, on acceptable terms or at all, to support our business in the future;
•significant reduction in our membership;
•transition to a Total Care Model may be challenging for physician partners;
•inaccuracy in estimates of our members’ risk adjustment factors, medical services expense, incurred but not reported claims, and earnings pursuant to payor contracts;
•public health crises, such as COVID-19, could adversely affect us;
•the impact of restrictive clauses or exclusivity provisions in some of our contracts with physician partners;
•our ability to hire and retain qualified personnel;
22
•our ability to realize the full value of our intangible assets;
•security breaches, cybersecurity attacks, loss of data and other disruptions to our information systems;
•our ability to protect the confidentiality of our know-how and other proprietary and internally developed information;
•our reliance on our subsidiaries to perform and fund their operations;
•our use of algorithms, artificial intelligence, and machine learning in our business and challenges with properly managing the development and use of these technologies;
•our reliance on a limited number of key payors;
•the limited terms of contracts with our payors and our ability to renew them upon expiration;
•our ability to navigate the changing healthcare payor market;
•our reliance on our payors, physician partners and other providers to operate our business;
•our ability to obtain accurate and complete diagnosis data;
•our reliance on third-party software, data, infrastructure and bandwidth;
•consolidation and competition in the healthcare industry;
•the impact of changes to, and dependence on, federal government healthcare programs;
•uncertain or adverse economic and macroeconomic conditions, including a downturn or decrease in government expenditures;
•regulation of the healthcare industry and our physician partners’ ability to comply with such laws and regulations;
•federal and state investigations, audits and enforcement actions;
•repayment obligations arising out of payor audits;
•negative publicity regarding the managed healthcare industry generally;
•our use, disclosure and processing of personally identifiable information, protected health information, and de-identified data;
•failure to obtain or maintain an insurance license, a certificate of authority or an equivalent authorization;
•changes in tax laws and regulations, or changes in related judgments or assumptions;
•our indebtedness and our potential to incur more debt;
•our dependence on our subsidiaries for cash to fund all of our operations and expenses;
•provisions in our governing documents;
•our ability to achieve a return on investment depends on appreciation in the price of our common stock;
•non-compliance with the New York Stock Exchange could result in a delisting of our securities;
•lawsuits not covered by insurance and securities class action litigation;
•sustainability issues;
•our stock price may be volatile;
•risks related to management transitions, including the transition to our new Chief Executive Officer, and our ability to effectively manage leadership changes; and
•risks related to other factors discussed under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Except as required by law, we do not undertake, and hereby disclaim, any obligation to update any forward-looking statements, which speak only as of the date on which they are made.
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The information set forth in this Item 2 is intended to provide readers with an understanding of our financial condition, changes in financial condition, and results of operations and should be read in connection with the accompanying Condensed Consolidated Financial Statements and notes to Condensed Consolidated Financial Statements in Part I, Item 1 of this Report. We will discuss and provide our analysis in the following order:
•Overview and Recent Developments
•Key Financial and Operating Metrics
•Key Components of Our Results of Operations
•Results of Operations
•Non-GAAP Financial Measure
•Liquidity and Capital Resources
•Critical Accounting Estimates
•Recent Accounting Pronouncements
Overview and Recent Developments
Our business is transforming healthcare by empowering primary care physicians (“PCPs”) to be the agent for change in the communities they serve. We believe that PCPs, with their intimate patient-physician relationships, are best positioned to drive meaningful change in quality, cost, and patient experience when provided with the right infrastructure and payment model. Through our combination of the agilon platform, a long-term partnership model with existing physician groups, and a growing network of like-minded physicians, we believe we are poised to revolutionize healthcare for seniors across communities throughout the United States. We believe our purpose-built model provides the necessary capabilities, capital, and business model for existing physician groups to create a Medicare-centric, globally capitated line of business. Our model operates by forming risk-bearing entities (“RBEs”) within local geographies, which enter into arrangements with payors providing for monthly payments to manage the total healthcare needs of our physician partners’ attributed patients (or, global capitation arrangements). The RBEs also contract with agilon to perform certain functions and enter into long-term professional service agreements with one or more anchor physician groups pursuant to which the anchor physician groups receive a base compensation rate and share in the savings from successfully improving quality of care and reducing costs.
Our business model is differentiated by its focus on existing community-based physician groups and is built around three key elements: (1) agilon’s platform; (2) agilon’s long-term physician partnership model; and (3) agilon’s network. With our model, our goal is to remove the barriers that prevent community-based physicians from evolving to a Total Care Model, where the physician is empowered to manage health outcomes and the total healthcare needs of their attributed Medicare patients.
Third Quarter 2026 Results:
•Medicare Advantage members of approximately 453,600 as of September 30, 2026 decreased 10% from September 30, 2025.
•CMS ACO Models (defined below) attributed beneficiaries of approximately 112,300 as of September 30, 2026 decreased 3% from September 30, 2025.
•Total revenue of $1.5 billion increased 6% compared to $1.4 billion in the third quarter of 2025.
•Medical services expense ratio (“MSER”) of 88.5% compared to 104.0% in the third quarter of 2025.
•Net income of $35 million, compared to net loss of $110 million in the third quarter of 2025.
•Adjusted EBITDA of $64 million, compared to negative $91 million in the third quarter of 2025.
Year to Date 2026 Results as of September 30, 2026:
•Total revenue of $4.4 billion remained relatively flat in the nine months ended September 30, 2026 compared to the same period in 2025.
•MSER of 88.3% compared to 99.6% in the nine months ended September 30, 2025.
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•Net income of $102 million, compared to net loss of $202 million in the nine months ended September 30, 2025.
•Adjusted EBITDA of $187 million, compared to negative $154 million in the nine months ended September 30, 2025.
Platform Membership Details
MA members decreased 10% from September 30, 2025, which reflects previously disclosed market exits, as well as payor exits in certain markets resulting from a disciplined approach to contracting focused on profitability. Total members live on the agilon platform at September 30, 2026 include 453,600 MA members and 112,300 attributed CMS ACO Models (as defined below) beneficiaries.
Average MA membership was 488,000 during the third quarter of 2026.
Reverse Stock Split
On March 30, 2026, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-25 reverse stock split of our issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each twenty-five shares of common stock issued and outstanding was automatically reclassified, combined, and converted into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to receive fractional shares automatically became entitled to receive cash in lieu of such fractional shares. Proportional adjustments were made to the number of shares of common stock awarded and available for issuance under our equity incentive plans, as well as the exercise price and the number of shares issuable upon the exercise or conversion of our outstanding stock options and other equity securities under our equity incentive plans. The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock. All common stock, stock options, restricted stock units, and per share information presented within this Quarterly Report on Form 10-Q have been adjusted to reflect the Reverse Stock Split on a retroactive basis for all periods presented.
Key Financial and Operating Metrics
All of our key metrics exclude historical results from our Hawaii operations (which are included as discontinued operations in our condensed consolidated financial statements).
We monitor the following key financial and operating metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. We believe the following key metrics are useful in evaluating our business (dollars in thousands):
| As of and For the | As of and For the | ||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| MA members | 453,600 | 502,800 | (10) | 453,600 | 502,800 | (10) | |||||||||||||||||||||||||||||
| Medical services revenue | $ | 1,517,831 | $ | 1,432,437 | 6 | $ | 4,429,301 | $ | 4,354,355 | 2 | |||||||||||||||||||||||||
| Medical services expense ratio | 88.5 | % | 104.0 | % | (15) | 88.3 | % | 99.6 | % | (11) | |||||||||||||||||||||||||
| Platform support costs | $ | 44,382 | $ | 38,652 | 15 | $ | 124,730 | $ | 120,313 | 4 | |||||||||||||||||||||||||
| Net income (loss) | $ | 34,912 | $ | (110,207) | 132 | $ | 101,784 | $ | (202,465) | 150 | |||||||||||||||||||||||||
Adjusted EBITDA(1) | $ | 63,684 | $ | (91,492) | 170 | $ | 187,094 | $ | (154,258) | 221 | |||||||||||||||||||||||||
___________________________________________
(1)Adjusted EBITDA is a non-GAAP financial measure. Net income (loss) is the most directly comparable financial measure calculated in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to Adjusted EBITDA. See “—Non-GAAP Financial Measure" below for additional information, including a reconciliation of net income (loss) to Adjusted EBITDA.
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Medicare Advantage Members
Our MA members include all individuals enrolled in an MA plan who are attributed to the PCPs on our platform at the end of a given period.
Medical Services Revenue
Our medical services revenue consists of capitation revenue under contracts with various payors. Under the typical capitation arrangement, we are entitled to per member per month (“PMPM”) fees to provide a defined range of healthcare services for MA health plan members through our contracted physician partners and affiliated PCPs. Such fees are typically based on a defined percentage of corresponding premium that payors receive from the Centers for Medicare & Medicaid Services (“CMS”). We recognize capitation revenue over the period eligible members are entitled to receive healthcare services.
Medical Services Expense Ratio
We calculate MSER by dividing total medical services expense by total medical services revenue in a given period. Medical services expense represents costs incurred for medical services provided directly to our members. MSER may fluctuate based on changes in the mix of new and existing members on our platform, as newly enrolled members typically incur higher medical services expense. We believe this metric provides insight into the economics of our capitation arrangements as it includes all medical services expense directly associated with our members’ care.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Medical services revenue | $ | 1,517,831 | $ | 1,432,437 | $ | 4,429,301 | $ | 4,354,355 | |||||||||||||||
| Medical services expense | $ | 1,343,519 | $ | 1,489,479 | $ | 3,909,382 | $ | 4,336,591 | |||||||||||||||
| Medical services expense ratio | 88.5 | % | 104.0 | % | 88.3 | % | 99.6 | % | |||||||||||||||
Platform Support Costs
Our platform support costs, which include regionally-based support personnel and other operating costs to support our geographies, are expected to decrease over time as a percentage of revenue as our physician partners add members and our revenue grows. Our operating expenses at the enterprise level include resources and technology to support payor contracting, clinical program development, quality, data management, finance, and legal and compliance functions.
The table below presents costs to support our live geographies and enterprise functions, which are included in general and administrative expenses (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Platform support costs | $ | 44,382 | $ | 38,652 | $ | 124,730 | $ | 120,313 | |||||||||||||||
| % of total revenues | 3 | % | 3 | % | 3 | % | 3 | % | |||||||||||||||
Net Income (Loss) and Adjusted EBITDA
Net income (loss) is the most directly comparable U.S. GAAP financial measure to Adjusted EBITDA. We define Adjusted EBITDA as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) stock-based compensation expense, (vi) severance and related costs, and (vii) certain other items that are not considered by us in the evaluation of ongoing operating performance. We reflect our share of Adjusted EBITDA for equity method investments by applying our actual ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis.
See “—Non-GAAP Financial Measure” below for additional information regarding our use of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA.
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Key Components of Our Results of Operations
Revenues
Medical Services Revenue
Our medical services revenue consists of capitation revenue under contracts with various payors. Under the typical capitation arrangement, we are entitled to PMPM fees to provide a defined range of healthcare services for MA health plan members through our contracted physician partners and affiliated PCPs. Such fees are typically based on a defined percentage of corresponding premium that payors receive from CMS. We recognize capitation revenue over the period eligible members are entitled to receive healthcare services. In certain of our payor arrangements, we are also financially responsible for Medicare Part D pharmaceutical costs for prescriptions rendered to members.
Medical services revenue constitutes substantially all our total revenue for the three and nine months ended September 30, 2026 and 2025.
Operating Expenses
Medical Services Expense
In each of our geographies, a network of physicians, hospitals, and other healthcare providers provide care to our members. Medical services expense represents costs incurred for medical services provided to our members. Our medical services expense trends primarily relate to changes in per visit costs incurred by our members, along with changes in health system and provider utilization of services. Medical services expense is recognized in the period in which services are provided and includes estimates of our obligations for medical services that have been rendered by third parties but for which claims have either not yet been received, processed, or paid.
Other Medical Expenses
Other medical expenses include: (i) partner physician incentive expense and (ii) other provider costs. Partner physician incentive expense represents obligations to our physician partners corresponding to a portion of the surplus generated in our geographies, which is a function of medical services revenues less the sum of medical services expenses, other provider costs and market operating costs, for the respective geography. Physician payment obligations are reconciled quarterly, and settlement payments are typically issued to providers on an annual basis in arrears, with interim payments issued periodically. Other provider costs include payments to support physician-patient engagement, certain other medical costs, and other care management expenses that help to create medical cost efficiency. Other provider costs also include costs incurred for geographies that are in implementation and are not yet generating revenue.
General and Administrative
General and administrative expenses consist of market-based support personnel and other operating costs to support our geographies, personnel and other operating costs to support our enterprise functions, and investments to support development and expansion of our physician partners. Our enterprise functions include salaries and related expenses, stock-based compensation (including shares issued under partner physician group equity agreements), operational support expenses, technology infrastructure, finance, and legal, as well as other costs associated with the continued growth of our platform. For the purposes of calculating physician partner incentive expense, we allocate a portion of our enterprise general and administrative expenses to our geographies. General and administrative expenses also include severance and accruals for unasserted claims.
Depreciation and Amortization
Depreciation and amortization expenses are associated with our property and equipment and acquired intangible assets. Depreciation includes expenses associated with computer equipment and software, furniture and fixtures, and leasehold improvements. Amortization primarily includes expenses associated with acquired intangible assets.
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Other Income (Expense)
Income (loss) from equity method investments
Income (loss) from equity method investments consists primarily of income associated with our participation in the CMS’ Accountable Care Organization Realizing Equity, Access, and Community Health (“ACO REACH”) Medicare Model and Shared Savings Program (“MSSP”) (collectively, “CMS ACO Models”).
Other Income (Expense), Net
Other income (expense), net includes: (i) trademark licensing and other operating and administrative services to our equity method investments and (ii) interest income, which consists primarily of interest earned on our cash and cash equivalents, restricted cash and equivalents, and marketable securities, including amortization/accretion of discount/premium.
Interest Expense
Interest expense consists primarily of interest expense associated with our outstanding debt, including amortization of debt discounts and issuance costs.
Income Tax Benefit (Expense)
We are subject to corporate U.S. federal, state, foreign, and local income taxation. Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management makes estimates and judgments about future taxable income based on assumptions that are consistent with our plans and estimates.
Total Discontinued Operations
Total discontinued operations primarily consist of the results of our former Hawaii operations. For certain of our divestiture transactions, we continue to be responsible for any liabilities arising from the business that were incurred prior to the closing date of such transaction, including any fines, penalties, and other sanctions, the payment of claims for medical services incurred prior to the effective date of each transaction, and other contingent liabilities that we currently believe are remote.
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Results of Operations
The following table summarizes key components of our results of operations (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Medical services revenue | $ | 1,517,831 | $ | 1,432,437 | $ | 4,429,301 | $ | 4,354,355 | |||||||||||||||
| Other operating revenue | 1,655 | 2,884 | 5,388 | 8,730 | |||||||||||||||||||
| Total revenues | 1,519,486 | 1,435,321 | 4,434,689 | 4,363,085 | |||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Medical services expense | 1,343,519 | 1,489,479 | 3,909,382 | 4,336,591 | |||||||||||||||||||
| Other medical expenses | 77,984 | 13,488 | 255,170 | 95,845 | |||||||||||||||||||
| General and administrative | 67,133 | 56,198 | 209,869 | 178,435 | |||||||||||||||||||
| Depreciation and amortization | 6,741 | 7,430 | 20,392 | 21,625 | |||||||||||||||||||
| Total expenses | 1,495,377 | 1,566,595 | 4,394,813 | 4,632,496 | |||||||||||||||||||
| Income (loss) from operations | 24,109 | (131,274) | 39,876 | (269,411) | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Income (loss) from equity method investments | (979) | 13,133 | 3,158 | 31,217 | |||||||||||||||||||
| Other income (expense), net | 17,524 | 9,441 | 48,564 | 26,581 | |||||||||||||||||||
| Interest expense | (1,744) | (1,838) | (5,163) | (4,925) | |||||||||||||||||||
| Income (loss) before income taxes | 38,910 | (110,538) | 86,435 | (216,538) | |||||||||||||||||||
| Income tax benefit (expense) | (3,998) | 331 | (3,651) | 73 | |||||||||||||||||||
| Income (loss) from continuing operations | 34,912 | (110,207) | 82,784 | (216,465) | |||||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||
| Adjustments on sale of assets, net | — | — | 19,000 | 14,000 | |||||||||||||||||||
| Net income (loss) | $ | 34,912 | $ | (110,207) | $ | 101,784 | $ | (202,465) | |||||||||||||||
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The following table summarizes our results of operations as a percentage of total revenues:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Medical services revenue | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
| Other operating revenue | — | — | — | — | |||||||||||||||||||
| Total revenues | 100 | 100 | 100 | 100 | |||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Medical services expense | 88 | 104 | 88 | 99 | |||||||||||||||||||
| Other medical expenses | 5 | 1 | 6 | 2 | |||||||||||||||||||
| General and administrative | 4 | 4 | 5 | 4 | |||||||||||||||||||
| Depreciation and amortization | — | 1 | — | — | |||||||||||||||||||
| Total expenses | 98 | 109 | 99 | 106 | |||||||||||||||||||
| Income (loss) from operations | 2 | (9) | 1 | (6) | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Income (loss) from equity method investments | — | 1 | — | 1 | |||||||||||||||||||
| Other income (expense), net | 1 | 1 | 1 | 1 | |||||||||||||||||||
| Interest expense | — | — | — | — | |||||||||||||||||||
| Income (loss) before income taxes | 3 | (8) | 2 | (5) | |||||||||||||||||||
| Income tax benefit (expense) | — | — | — | — | |||||||||||||||||||
| Income (loss) from continuing operations | 2 | (8) | 2 | (5) | |||||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||
| Adjustments on sale of assets, net | — | — | — | — | |||||||||||||||||||
| Net income (loss) | 2 | % | (8) | % | 2 | % | (5) | % | |||||||||||||||
Comparison of the Three and Nine Months Ended September 30, 2026 to the Three and Nine Months Ended September 30, 2025
Medical Services Revenue
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Medical services revenue | $ | 1,517,831 | $ | 1,432,437 | $ | 85,394 | 6 | % | |||||||||||||||
| % of total revenues | 100 | % | 100 | % | |||||||||||||||||||
Medical services revenue increased by $85.4 million, or 6%, for the three months ended September 30, 2026 compared to the same period in 2025. The increase in medical services revenue for the three months ended September 30, 2026 was driven by higher premium yield as a result of constructive rates for 2026 from CMS funding, increased expectations for risk adjustment contribution, and more favorable percentage of premium as a result of payor contract negotiations. During the three months ended September 30, 2026, PMPM capitation rates increased 11% compared to the same period in 2025. The increase in medical services revenue was partially offset by an average MA membership decline of 4% as a result of our measured approach to growth, previously disclosed market exits which were finalized as of January
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1, 2026, and payor exits in certain markets which were a result of our disciplined and profitability-focused contracting efforts.
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Medical services revenue | $ | 4,429,301 | $ | 4,354,355 | $ | 74,946 | 2 | % | |||||||||||||||
| % of total revenues | 100 | % | 100 | % | |||||||||||||||||||
Medical services revenue increased by $74.9 million, or 2%, for the nine months ended September 30, 2026 compared to the same period in 2025. Medical services revenue for the nine months ended September 30, 2026 was impacted by higher premium yield as a result of constructive rates for 2026 from CMS funding, increased expectations for risk adjustment contribution, more favorable percentage of premium as a result of payor contract negotiations, and a new payor relationship in an existing geography. During the nine months ended September 30, 2026, PMPM capitation rates increased 12% compared to the same period in 2025. This increase was partially offset by an average MA membership decline of 9% as a result of our measured approach to growth, previously disclosed market exits which were finalized as of January 1, 2026, and payor exits in certain markets, which were a result of our disciplined and profitability-focused contracting efforts.
Medical Services Expense
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Medical services expense | $ | 1,343,519 | $ | 1,489,479 | $ | (145,960) | (10) | % | |||||||||||||||
| % of total revenues | 88 | % | 104 | % | |||||||||||||||||||
Medical services expense decreased by $146.0 million, or 10%, for the three months ended September 30, 2026 compared to the same period in 2025. This decline was primarily driven by two factors. The first factor was a 4% decrease in average MA membership, which reflects our measured approach to growth, previously disclosed market exits finalized as of January 1, 2026, and payor exits in certain markets resulting from our disciplined, profitability-focused contracting efforts. The second factor was a 6% decrease in average medical services expense per member, which reflects the impact of our clinical and cost management initiatives, including exits in certain markets, as well as positive claims development from 2025 and the first half of 2026 recognized in the quarter. Based on our current available data, cost trends for the three months ended September 30, 2026 remained in line with our expectations.
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Medical services expense | $ | 3,909,382 | $ | 4,336,591 | $ | (427,209) | (10) | % | |||||||||||||||
| % of total revenues | 88 | % | 99 | % | |||||||||||||||||||
Medical services expense decreased by $427.2 million, or 10%, for the nine months ended September 30, 2026 compared to the same period in 2025 due primarily to a decline in average MA membership of 9%, while average medical services expense per member remained relatively flat. The decrease in medical services expense reflects the impact of our clinical and cost management initiatives, including exits in certain markets, and the period also benefited from positive claims development from 2025 and the first half of 2026. Based on our current available data, cost trends for the nine months ended September 30, 2026 remained in line with our expectations.
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Other Medical Expenses
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Other medical expenses | $ | 77,984 | $ | 13,488 | $ | 64,496 | 478 | % | |||||||||||||||
| % of total revenues | 5 | % | 1 | % | |||||||||||||||||||
Other medical expenses increased by $64.5 million for the three months ended September 30, 2026 compared to the same period in 2025. Partner physician incentive expense, which is primarily a function of medical services revenues less the sum of medical services expenses, increased by $73.1 million to $54.9 million in 2026 compared to $(18.2) million in the same period in 2025 from favorable MSER generated in certain of our geographies during 2026, which were a result of our disciplined and profitability-focused contracting efforts, compared to losses generated in certain of our geographies during the same period in 2025. Other provider costs decreased by $8.6 million to $23.1 million in 2026 compared to $31.7 million in the same period in 2025 primarily as a result of a decline in additional compensation to support physician-patient engagement and other care management expenses.
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Other medical expenses | $ | 255,170 | $ | 95,845 | $ | 159,325 | 166 | % | |||||||||||||||
| % of total revenues | 6 | % | 2 | % | |||||||||||||||||||
Other medical expenses increased by $159.3 million, or 166%, for the nine months ended September 30, 2026 compared to the same period in 2025. Partner physician incentive expense, which is primarily a function of medical services revenues less the sum of medical services expenses, increased by $182.3 million to $173.1 million in 2026 compared to $(9.2) million in the same period in 2025 from favorable MSER generated in certain of our geographies during 2026, which were a result of our disciplined and profitability-focused contracting efforts, compared to losses generated in certain of our geographies during the same period in 2025. Other provider costs decreased by $22.9 million to $82.1 million in 2026 compared to $105.0 million in the same period in 2025 primarily as a result of a decline in additional compensation to support physician-patient engagement and other care management expenses.
General and Administrative
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| General and administrative | $ | 67,133 | $ | 56,198 | $ | 10,935 | 19 | % | |||||||||||||||
| % of total revenues | 4 | % | 4 | % | |||||||||||||||||||
General and administrative expenses increased $10.9 million, or 19%, for the three months ended September 30, 2026 compared to the same period in 2025. Operating costs to support our live geographies and enterprise functions (platform support costs) increased to $44.4 million in 2026, compared to $38.7 million in the same period in 2025. Operating costs to support our live geographies and enterprise functions as a percentage of revenue remained flat at 3% for the three months ended September 30, 2026 compared to the same period in 2025. Investments to support geography entry decreased to $1.8 million in 2026, compared to $4.8 million in the same period in 2025 due to decreased costs associated with the expansion within existing geographies. Stock-based compensation expense increased $11.4 million for the three months ended September 30, 2026, compared to the same period in 2025 primarily as the performance conditions on certain performance-based equity awards were deemed probable, and thus the related costs were increased.
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| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| General and administrative | $ | 209,869 | $ | 178,435 | $ | 31,434 | 18 | % | |||||||||||||||
| % of total revenues | 5 | % | 4 | % | |||||||||||||||||||
General and administrative expenses increased $31.4 million, or 18%, for the nine months ended September 30, 2026 compared to the same period in 2025. Operating costs to support our live geographies and enterprise functions (platform support costs) increased to $124.7 million in 2026, compared to $120.3 million in the same period in 2025. Operating costs to support our live geographies and enterprise functions as a percentage of revenue remain flat at 3% for the nine months ended September 30, 2026 compared to the same period in 2025. Investments to support geography entry decreased to $6.4 million in 2026, compared to $15.6 million in the same period in 2025 due to decreased costs associated with the expansion within existing geographies. Stock-based compensation expense increased $9.3 million for the nine months ended September 30, 2026, compared to the same period in 2025 primarily as the performance conditions on certain performance-based equity awards were deemed probable, and thus the related costs were increased. Costs incurred for severance and transaction-related costs increased by $26.9 million to $29.8 million in 2026 compared to $2.9 million in the same period in 2025 as a result of our cost management initiatives.
Income (loss) from equity method investments
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Income (loss) from equity method investments | $ | (979) | $ | 13,133 | $ | (14,112) | (107) | % | |||||||||||||||
| % of total revenues | — | % | 1 | % | |||||||||||||||||||
Income (loss) from equity method investments decreased $14.1 million to losses of $1.0 million for the three months ended September 30, 2026 compared to income of $13.1 million in the same period in 2025. Our CMS ACO Models investees recognized an increase in operating expenses during the three months ended September 30, 2026 compared to the same period in 2025 as a result of additional services we provided, which began in the fourth quarter of 2025.
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Income (loss) from equity method investments | $ | 3,158 | $ | 31,217 | $ | (28,059) | (90) | % | |||||||||||||||
| % of total revenues | — | % | 1 | % | |||||||||||||||||||
Income (loss) from equity method investments decreased $28.1 million to $3.2 million for the nine months ended September 30, 2026 compared to $31.2 million in the same period in 2025. Our CMS ACO Models investees recognized an increase in operating expenses during the nine months ended September 30, 2026 compared to the same period in 2025 as a result of additional services we provided, which began in the fourth quarter of 2025.
Other income (expense), net
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Other income (expense), net | $ | 17,524 | $ | 9,441 | $ | 8,083 | 86 | % | |||||||||||||||
| % of total revenues | 1 | % | 1 | % | |||||||||||||||||||
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Other income (expense), net increased by $8.1 million, or 86%, for the three months ended September 30, 2026 compared to the same period in 2025 primarily from the increase in income related to additional services rendered to our CMS ACO Models investments recognized beginning in the fourth quarter of 2025.
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Other income (expense), net | $ | 48,564 | $ | 26,581 | $ | 21,983 | 83 | % | |||||||||||||||
| % of total revenues | 1 | % | 1 | % | |||||||||||||||||||
Other income (expense), net increased by $22.0 million, or 83%, for the nine months ended September 30, 2026 compared to the same period in 2025 primarily from the increase in income related to additional services rendered to our CMS ACO Models investments recognized beginning in the fourth quarter of 2025.
Total Discontinued Operations
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| (dollars in thousands) | 2026 | 2025 | $ | % | |||||||||||||||||||
| Total discontinued operations | $ | 19,000 | $ | 14,000 | $ | 5,000 | 36 | % | |||||||||||||||
| % of total revenues | — | % | — | % | |||||||||||||||||||
Total discontinued operations relate to the sale of our Hawaii operations in October 2023. Total discontinued operations for the nine months ended September 30, 2026 and 2025 relate to the release of a contingent obligation from our former Hawaii operations.
Non-GAAP Financial Measure
In addition to providing results that are determined in accordance with U.S. GAAP, we present Adjusted EBITDA, which is a non-GAAP financial measure.
We define Adjusted EBITDA as net income (loss) adjusted to exclude: (i) income (loss) from discontinued operations, net of income taxes, (ii) interest expense, (iii) income tax expense (benefit), (iv) depreciation and amortization, (v) stock-based compensation expense, (vi) severance and related costs, and (vii) certain other items that are not considered by us in the evaluation of ongoing operating performance. We reflect our share of Adjusted EBITDA for equity method investments by applying our actual ownership percentage for the period to the applicable reconciling items on an entity-by-entity basis. Net income (loss) is the most directly comparable U.S. GAAP financial measure to Adjusted EBITDA.
We believe Adjusted EBITDA helps identify underlying trends in our business and facilitate evaluation of period-to-period operating performance of our operations by eliminating items that are variable in nature and not considered by us in the evaluation of ongoing operating performance, allowing comparison of our recurring core business operating results over multiple periods. We also believe Adjusted EBITDA provides useful information about our operating results, enhances the overall understanding of our past performance and future prospects, and allows for greater transparency with respect to key metrics we use for financial and operational decision-making. We believe Adjusted EBITDA or similarly titled non-GAAP measures are widely used by investors, securities analysts, ratings agencies, and other parties in evaluating companies in our industry as a measure of financial performance. Other companies may calculate Adjusted EBITDA or similarly titled non-GAAP measures differently from the way we calculate this metric. As a result, our presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies, limiting the usefulness as comparative measures.
Adjusted EBITDA is not considered a measure of financial performance under U.S. GAAP, and the items excluded therefrom are significant components in understanding and assessing our financial performance. Adjusted EBITDA has limitations as an analytical tool and should not be considered in isolation or as an alternative to such U.S. GAAP measures as net income (loss), cash flows provided by or used in operating, investing, or financing activities or
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other financial statement data presented in our consolidated financial statements as an indicator of financial performance or liquidity. Some of these limitations are:
•Adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs;
•Adjusted EBITDA does not reflect interest expense or the requirements necessary to service interest or principal payments on debt;
•Adjusted EBITDA does not reflect income tax expense (benefit) or the cash requirements to pay taxes;
•Adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
•Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and
•The expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from similarly titled non-GAAP financial measures.
The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA using data derived from our condensed consolidated financial statements for the periods indicated (dollars in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income (loss) | $ | 34,912 | $ | (110,207) | $ | 101,784 | $ | (202,465) | |||||||||||||||
| (Income) loss from discontinued operations, net of income taxes | — | — | (19,000) | (14,000) | |||||||||||||||||||
| Interest expense | 1,744 | 1,838 | 5,163 | 4,925 | |||||||||||||||||||
| Income tax expense (benefit) | 3,998 | (331) | 3,651 | (73) | |||||||||||||||||||
| Depreciation and amortization | 6,741 | 7,430 | 20,392 | 21,625 | |||||||||||||||||||
| Severance and related costs | 3,180 | 4,092 | 16,931 | 4,736 | |||||||||||||||||||
| Stock-based compensation expense | 18,859 | 7,498 | 48,946 | 39,599 | |||||||||||||||||||
EBITDA adjustments related to equity method investments(1) | 11,541 | 4,969 | 41,207 | 16,178 | |||||||||||||||||||
Other(2) | (17,291) | (6,781) | (31,980) | (24,783) | |||||||||||||||||||
| Adjusted EBITDA | $ | 63,684 | $ | (91,492) | $ | 187,094 | $ | (154,258) | |||||||||||||||
___________________________________________
(1)Includes elimination of certain administrative services provided by agilon health, inc. to equity method investments.
(2)Includes interest income, transaction-related costs and elimination of certain administrative charges by agilon health, inc. for trademark licensing fees and other service arrangements to its equity method investees.
Liquidity and Capital Resources
We strategically maintain a level of liquidity sufficient to allow us to meet our cash needs in the short-term. We have historically financed our operations primarily through funds generated from our capitation arrangements with payors, distributions and or payments from our equity method investments, issuances of equity securities, and borrowings under credit agreements. We generally invest any excess cash in money market accounts and marketable securities. Over the long term, our investment strategies are designed to provide safety and preservation of capital, and sufficient liquidity to meet the cash flow needs of our business operations.
As of September 30, 2026, we had cash and cash equivalents and restricted cash of $246.4 million and investments in marketable securities of $65.4 million.
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From time to time, we may incur operating losses and may generate negative cash flows from operations. As a result, we may require additional capital resources in the future to execute strategic initiatives to grow our business. Our primary uses of cash include payments for medical claims and other medical expenses, including partner physician incentive expense, general and administrative expenses, costs associated with the development of new geographies and expansion of existing geographies, debt service and capital expenditures. Final reconciliation and receipt of amounts due from payors are typically settled in arrears, following completion of the contractual program year.
Based on our planned operations, we believe that our existing cash and cash equivalents, restricted cash, investments in marketable securities, as well as available borrowing capacity under the Credit Facility (defined below), will be sufficient to meet our working capital and capital expenditure needs over at least the next 12 months, though we may require additional capital resources in the future. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. Our cash flows are impacted by the timing of receipts from payors. Our cash flows are also impacted by our medical services expense ratio, which we calculate by dividing total medical services expense by total medical services revenue in a given period. An MSER below 100% contributes to our ability to generate positive cash flows. Conversely, cash flows would be negatively impacted during periods in which our MSER exceeds 100%. MSER may fluctuate based on changes in the mix of new and existing members on our platform, as newly enrolled members typically incur higher medical services expense.
Our cash flows may also be affected by the timing of working capital items including accounts receivable, claims payable, other receivables and payables, and cash requirement covenants under our Credit Agreement (defined below), including daily minimum balances and cash collateral for issuing letters of credit.
We may require additional financing in the future to fund working capital and pay our obligations. We may seek to raise any necessary additional capital through a combination of public or private equity offerings and/or debt financings. There can be no assurance that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us, if at all. If adequate funds are not available on acceptable terms when needed, we may be required to significantly reduce operating expenses, which may have a material adverse effect on our business, financial condition, cash flows, and results of operations. If we do raise additional capital through public or private equity offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our existing stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends.
Our ability to pay dividends to holders of our common stock is significantly limited as a practical matter by our growth plans as well as the Credit Facility (defined below). The borrower on the Credit Facility is agilon health management, inc., our wholly-owned subsidiary. The Credit Facility is guaranteed by certain of our subsidiaries, including those identified as variable interest entities. If we were to seek to pay dividends out of funds made available to us by agilon health management, inc. or its subsidiaries, the Credit Facility restricts agilon health management, inc.’s ability to pay dividends or make loans to us. The Credit Facility also contains customary covenants including, among other things, limitations on restricted payments including: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios.
Cash Flows
The following summary discussion of our cash flows is based on the condensed consolidated statements of cash flows. The following table sets forth changes in cash flows (dollars in thousands):
| Nine Months Ended September 30, | |||||||||||||||||
| 2026 | 2025 | Change | |||||||||||||||
| Net cash provided by (used in) operating activities | $ | 16,303 | $ | (85,226) | $ | 101,529 | |||||||||||
| Net cash provided by (used in) investing activities | 57,003 | 66,027 | (9,024) | ||||||||||||||
| Net cash provided by (used in) financing activities | (640) | (2,977) | 2,337 | ||||||||||||||
Net Cash Provided By (Used In) Operating Activities
Net cash provided by operating activities was $16.3 million for the nine months ended September 30, 2026 compared to net cash used in operating activities of $85.2 million for the nine months ended September 30, 2025. The
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change in net cash provided by operating activities was primarily a result of a favorable decline in our MSER, partially offset by increased provider costs, including partner physician incentive expenses, and timing of settlements with payors. Our cash flow from operations is dependent upon the number of members on our platform, the timing of settlements with payors, and the level of operating and general and administrative expenses necessary to operate and grow our business, among other factors.
Net Cash Provided By (Used In) Investing Activities
Net cash provided by investing activities was $57.0 million for the nine months ended September 30, 2026 compared to $66.0 million for the nine months ended September 30, 2025. During the nine months ended September 30, 2026, we received net proceeds from the maturities of marketable securities and repayments of loans receivables of $67.7 million and made investments of $10.7 million primarily for the acquisition of intangible assets and property and equipment. During the nine months ended September 30, 2025, we received net proceeds from the maturities of marketable securities and repayments of loans receivables of $100.4 million and made investments of $34.4 million primarily for the acquisition of intangible assets and property and equipment.
Net Cash Provided By (Used In) Financing Activities
Net cash used in financing activities of $0.6 million for the nine months ended September 30, 2026 was primarily related to the repayment and refinance of debt, partially offset by proceeds from stock option exercises. Net cash used in financing activities of $3.0 million for the nine months ended September 30, 2025 was primarily related to the payments related to equity issuances.
Debt Obligations
On February 18, 2021, we executed a credit facility agreement (as amended by the First Amendment to Credit Agreement, dated as of March 1, 2021, the Second Amendment to Credit Agreement, dated as of May 25, 2023, the Third Amendment to Credit Agreement, dated as of February 12, 2026 (the “Third Amendment”), and the Fourth Amendment to Credit Agreement, dated as of April 9, 2026, the “Credit Agreement”), which includes: (i) a secured term loan facility (the “Secured Term Loan Facility”) and (ii) a senior secured revolving credit facility (the “Secured Revolving Facility,” and together with the Secured Term Loan Facility, the “Credit Facility”). The Third Amendment, among other changes, (a) extended the stated maturity date from February 18, 2026 to February 18, 2028; (b) amended certain covenant “baskets” to be measured as a percentage of EBITDA rather than, or as an alternative to, Consolidated Total Assets; (c) required that we maintain a minimum of $50.0 million in Total Cash as of the end of each Business Day; (d) conditioned certain payments, including dividends, to Holdings under the available amount “basket” on us achieving positive EBITDA for two consecutive trailing four-quarter periods each ending after the Third Amendment effective date; (e) required that any reduction in outstanding letters of credit be accompanied by a corresponding prepayment of term loans; (f) reduced the aggregate amount of revolving credit commitments from $100.0 million to $90.0 million; and (g) required cash collateralization at 103% of the amount of each letter of credit outstanding. Concurrently with the effectiveness of the Third Amendment, we executed and delivered an unsecured guaranty of management’s obligations under the Credit Agreement. All capitalized terms used herein, but not defined herein, shall have the meanings ascribed to such terms in the Third Amendment.
The Secured Overnight Financing Rate (“SOFR”) is used as a benchmark interest rate in accordance with the Credit Agreement. At our option, borrowings under the Credit Facility can be either: (i) Term SOFR Rate Loans, (ii) Daily Simple SOFR Rate Loans, or (iii) Base Rate Loans, each as defined in the Credit Agreement. Daily Simple SOFR Rate Loans and Term SOFR Rate Loans bear interest at a rate equal to the sum of 3.50% and the higher of (a) SOFR, as defined in the Credit Agreement, and (b) 0%. Base Rate Loans bear interest at a rate equal to the sum of 2.50% and the highest of: (a) 0.50% in excess of the overnight federal funds rate, (b) the prime rate established by the administrative agent from time to time, (c) the one-month SOFR rate (adjusted for maximum reserves) plus 1.00% and (d) 0%. Additionally, we pay a commitment fee on the unfunded Secured Revolving Facility amount of 0.375%. We must also pay customary letter of credit fees.
The Credit Facility contains customary covenants including, among other things, limitations on restricted payments including: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios.
For additional discussion on our debt obligations, see Note 8 to the Condensed Consolidated Financial Statements.
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Equity
As of September 30, 2026, we had 16.8 million shares of common stock outstanding. See “—Overview and Recent Developments” above for information related to the Reverse Stock Split.
Critical Accounting Estimates
Management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our historical experience, known trends and events, and various other assumptions that we believe are reasonable under the circumstances. These estimates affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our condensed consolidated financial statements. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 in Part II, Item 7 “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting Policies” and Note 2 to the Condensed Consolidated Financial Statements. There have been no significant changes to our critical accounting policies during 2026.
Recent Accounting Pronouncements
For the impact of new accounting standards, see Note 2 to the Condensed Consolidated Financial Statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market risks, including the potential loss arising from adverse changes in interest rates. We do not use derivative financial instruments in the normal course of business or for speculative or trading purposes.
Our exposures to market risk for changes in interest expense relate primarily to the Credit Facility. Indebtedness under the Credit Facility is floating rate debt and is carried at amortized cost. Therefore, fluctuations in interest rates will impact our consolidated financial statements. A rising interest rate environment will increase the amount of interest paid on this debt. A hypothetical 100 basis point change in interest rates would not have a material impact on our interest expense.
We held cash, cash equivalents, restricted cash and equivalents, and marketable securities of $311.7 million and $285.1 million as of September 30, 2026 and December 31, 2025, respectively, consisting of bank deposits, certificates of deposits, money market funds, U.S. Treasury notes, and corporate debt securities. Such interest-earning instruments carry a degree of interest rate risk. A hypothetical 100 basis point change in interest rates would not have a material impact on the fair value of our marketable securities. Declines in interest rates over time will reduce our investment income. The goals of our investment policy are liquidity and capital preservation. We do not enter into investments for trading or speculative purposes.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures. Our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), with the assistance of other members of management, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our CEO and CFO have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to provide reasonable assurance that the information we are required to disclose in the reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s (“SEC”) rules and forms and (2) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.
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Because of its inherent limitations, internal control over financial reporting may not prevent or detect every misstatement. An evaluation of effectiveness is subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may decrease over time.
Changes in Internal Control Over Financial Reporting. Under applicable SEC rules (Exchange Act Rules 13a-15(d) and 15d-15(d)), management is required to evaluate any change in internal control over financial reporting that occurred during each fiscal quarter that had materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See the “Legal Proceedings” section of Note 9 to the Condensed Consolidated Financial Statements for information regarding legal proceedings, which information is incorporated by reference in this Item 1.
Item 1A. Risk Factors
In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes to the risk factors disclosed in that Form 10-K.
Item 5. Other Information
Effective November 3, 2026, the Board of Directors (the “Board”) of the Company approved the following changes to the titles of the Company’s executive officers:
•Tim O’Rourke from Chief Executive Officer and President to Chief Executive Officer;
•Benjamin Shaker, from Chief Markets Officer to President; and
•Denise Zamore, from Chief Legal Officer and Corporate Secretary to Chief Legal and People Officer and Corporate Secretary.
Mr. O’Rourke remains the Company’s sole principal executive officer.
In connection with the title changes, the Compensation and Human Capital Committee of the Board approved increases to the base salaries of Mr. Shaker and Ms. Zamore, effective November 3, 2026. Mr. Shaker’s base salary was increased from $464,000 to $575,000 and Ms. Zamore’s base salary was increased from $437,500 to $500,000. Target annual bonus opportunities, expressed as a percentage of base salary, remain unchanged, so that target bonus amounts increase proportionally with base salary.
The Company expects to enter into amendments to the employment agreements of each of Messrs. O’Rourke and Shaker and Ms. Zamore to reflect each executive’s new title and, as applicable, base salary.
Insider Trading Arrangements and Policies
During the three months ended September 30, 2026, the following officers of the Company (as defined in Rule 16a-1(f) under the Exchange Act) adopted trading arrangements intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended (each, a “Rule 10b5-1 Plan”):
•On August 12, 2026 , Timothy Gertsch , the Company’s Chief Accounting Officer , adopted a Rule 10b5-1 Plan covering up to 11,040 shares of the Company’s common stock. The Rule 10b5-1 Plan provides for sales beginning no earlier than November 13, 2026, and is scheduled to terminate on December 31, 2027 , subject to earlier termination in accordance with its terms.
•On August 17, 2026 , Benjamin Shaker , the Company’s then Chief Markets Officer , adopted a Rule 10b5-1 Plan covering up to 46,089 shares of the Company’s common stock and 10,293 options to purchase the Company’s common stock. The Rule 10b5-1 Plan provides for sales beginning no earlier than December 16, 2026, and is scheduled to terminate on September 16, 2027 , subject to earlier termination in accordance with its terms.
•On August 21, 2026 , Denise Zamore , the Company’s then Chief Legal Officer and Corporate Secretary , adopted a Rule 10b5-1 Plan covering up to 2,533 shares of the Company’s common stock and 1,600 options to purchase the Company’s common stock. The Rule 10b5-1 Plan provides for sales beginning no earlier than November 27, 2026, and is scheduled to terminate on August 16, 2027 , subject to earlier termination in accordance with its terms.
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Item 6. Exhibits
| Exhibit Number | Description | |||||||
| 3.1 | ||||||||
| 3.2 | ||||||||
| 10.1 | ||||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32.1 | ||||||||
| 32.2 | ||||||||
| 101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.* | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document.* | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document.* | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document.* | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document.* | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document.* | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document).* | |||||||
___________________________________________
*Filed herewith.
**Furnished herewith.
† Identifies each management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 4, 2026 | agilon health, inc. | |||||||
| (Registrant) | ||||||||
| /s/ JEFFREY SCHWANEKE | ||||||||
| Jeffrey Schwaneke | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||
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Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Timothy O’Rourke, certify that:
1.I have reviewed this quarterly report on Form 10-Q of agilon health, inc. for the period ended September 30, 2026;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 4, 2026 | By: | /s/ TIMOTHY O’ROURKE | |||||||||
Timothy O’Rourke | |||||||||||
| Chief Executive Officer and President | |||||||||||
| (Principal Executive Officer) | |||||||||||
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Jeffrey Schwaneke, certify that:
1.I have reviewed this quarterly report on Form 10-Q of agilon health, inc. for the period ended September 30, 2026;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 4, 2026 | By: | /s/ JEFFREY SCHWANEKE | |||||||||
| Jeffrey Schwaneke | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial Officer) | |||||||||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of agilon health, inc. (the “Company”) on Form 10-Q for the period ending September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Timothy O’Rourke, Chief Executive Officer and President, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 4, 2026 | By: | /s/ TIMOTHY O’ROURKE | |||||||||
Timothy O’Rourke | |||||||||||
| Chief Executive Officer and President | |||||||||||
| (Principal Executive Officer) | |||||||||||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of agilon health, inc. (the “Company”) on Form 10-Q for the period ending September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey Schwaneke, Chief Financial Officer, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 4, 2026 | By: | /s/ JEFFREY SCHWANEKE | |||||||||
| Jeffrey Schwaneke | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial Officer) | |||||||||||