Good day, everyone, and welcome to the Astrana Health Third Quarter 2025 Earnings Call. Today's speakers will be Brandon Sim, President and Chief Executive Officer of Astrana Health; and Chan Basho, Chief Operating and Financial Officer. This press release announcing Astrana Health's results for the third quarter ended September 30, 2025, is available at the Investors section of the company's website at www.astranahealth.com. The company will discuss certain non-GAAP measures during this call, and reconciliations to the most comparable GAAP measures are included in the press release. To provide some additional background on its results, the company has made a supplemental deck available on its website. A replay of this broadcast will also be available at Astrana Health's website after the conclusion of this call. Before we get started, I would like to remind everyone that this conference call and any accompanying information discussed contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms like anticipate, believe, expect, future, plan, outlook, and will, and they include, among other things, statements regarding the company's guidance, continued growth, acquisition strategy, ability to deliver sustainable long-term value, ability to respond to the changing environment, liquidity, operational focus, strategic growth plans, and acquisition integration efforts. While the company believes that the expectations reflected in these forward-looking statements are reasonable as of today, those statements are subject to risks and uncertainties that could lead to actual results differing materially from those projected. There is no assurance that those expectations will be proven correct. Information about the risks associated with investing in Astrana Health is included in filings with the Securities and Exchange Commission, which we encourage you to review before making any investment decisions. The company does not assume any obligation to update any forward-looking statements due to new information, future events, changes in market conditions, or otherwise, except as required by law. For further information regarding the disclaimer language, please refer to Slide 2 of the conference call presentation. With that, I will turn the call over to Astrana Health President and Chief Executive Officer, Brandon Sim. Please go ahead, Brandon.

Good afternoon, and thank you for joining us on Astrana Health's Third Quarter 2025 Earnings Call. Today, I'll start with an overview of our third quarter performance, highlight several exciting developments across our AI-enabled technology platform, and discuss our new strategic partnerships. I'll then review our updated 2025 guidance and share some early perspectives on how we're approaching 2026. After that, I'll turn it over to Chan for the financial review, and we'll open the call for your questions. Astrana delivered another strong quarter of financial and operational results in the third quarter as we continue to execute on our strategy of building the nation's leading healthcare delivery platform. This was an especially important quarter for all of us here at Astrana as we welcomed new providers, patients, and team members after the close of our acquisition of Prospect Health in July. Our strategy remains grounded in four pillars that define how we have built a durable and profitable enterprise, one that consistently does right by providers and patients. These are smart growth, disciplined risk progression, quality and cost excellence and operating leverage through our technology platform. First, our model allows us to grow markets with strong physician leadership, payer partnerships and performance visibility, thus delivering consistent quality and financial outcomes at scale. Next, we take on greater levels of risk in a disciplined fashion supported by the data, infrastructure and clinical programs needed to manage that risk responsibly. We've built Astrana to be efficient and accountable in both quality and cost. And as we integrate new partners and scale our automation and AI capabilities, we continue to unlock operating leverage where each incremental member, physician, and market contributes more to the enterprise than the one before it. It's in these periods of industry disruption that the Astrana model has continued to differentiate itself in terms of the superior outcomes we're delivering to both our patients and our payer partners. This has allowed us to consistently deliver differentiated financial results as well, and this quarter is no different. For the third quarter of 2025, we delivered another strong performance across the business with total revenues of $956 million, up 100% year-over-year and 46% sequentially, driven by both the integration of Prospect Health into the company as well as solid organic growth across the core business. Adjusted EBITDA for the quarter was $68.5 million, up 52% year-over-year and 42% sequentially as we continue to prioritize sustainable industry-leading profitability even as we scale aggressively. Medical cost trends across both Prospect and Astrana's core business remained firmly within expectations during the third quarter, underscoring the consistency and predictability of our operating model. In both the legacy Astrana and legacy Prospect businesses, the medical cost trend was stable and well-controlled with no meaningful deviation relative to the assumptions embedded in our guidance. First, in our legacy Astrana core business, Medicare once again trended favorably below our aggregate 4.5% trend expectation for the year. Importantly, Medicaid trend decelerated relative to the second quarter. Inpatient costs continue to trend favorably, and we continue to expect a full year blended cost trend of approximately 4.5% in the legacy Astrana business. Moving over to Prospect. Prospect also performed ahead of our expectations during the third quarter, and we remain very excited about the scale, capabilities, and talent this acquisition brings to the Astrana platform. We are reiterating our synergy targets of $12 million to $15 million over the coming quarters. Since closing the acquisition in early July, our teams have been focused on three key integration priorities. First, aligning and enhancing the provider and patient experience across both organizations; second, standardizing operating systems and financial reporting to enable consistent execution; and third, implementing the Astrana technology platform, which provides real-time visibility into utilization and outcomes and will drive meaningful synergy capture over time. Much of this work is already complete. We already have live visibility into utilization and performance metrics, and we remain on track to fully onboard prospects physician groups and care teams to the Astrana platform by mid-2026. Equally as important, we are advancing the cultural integration that underpins long-term success, ensuring that our combined teams are unified around a shared mission, values, and operating playbook. As we've always said, Prospect meaningfully expands our scale across Southern California and strengthens our ability to serve patients and payers with a single integrated delivery model. We remain confident that the integration will position Astrana for even stronger performance heading into 2026. As we continue integrating Prospect, we are also increasingly excited about the opportunity to leverage AI across our combined enterprise to drive meaningful improvements in both efficiency and care quality. A few examples include our predictive models that identify patients at high medical risk and surface actionable insights to physicians and care teams directly within Astrana's proprietary software, enabling earlier interventions and more coordinated care. We're also deploying AI-driven tools across claims analytics and clinical documentation to reduce administrative friction and help prevent fraud, waste, and abuse. Recently, we introduced a large language model integrated directly into our platform that allows clinicians and care teams to query a patient's longitudinal medical record and receive cited source-based responses. As a payer-agnostic platform serving all lines of business, Astrana is uniquely positioned with one of the most comprehensive data sets in the industry to power this kind of innovation. Over time, we expect these AI-enabled efficiencies to compound, expanding operating leverage, supporting consistent margin growth, and most importantly, improving outcomes for the patients we serve. It's a very exciting time here at Astrana. The third quarter was also an active period of growth for Astrana, underscoring the strong market demand for our high-quality technology-enabled solutions. We expanded our strategic partnership with Intermountain Health in Nevada, further strengthening Astrana's presence in one of our fastest-growing markets. This collaboration combines Intermountain's leading clinical infrastructure with Astrana's value-based care management capabilities and care delivery presence to enhance coordination, quality, and affordability for patients across Southern Nevada. It reinforces Astrana's position as a trusted partner to major health systems seeking to deliver integrated patient-centered care tailored to local communities. In our Care Enablement business, we also entered a new partnership with a provider group in Southern California. The group serves more than 40,000 members in value-based care arrangements across all lines of business and will begin onboarding to the Astrana platform in the first half of 2026. Next, I would like to address the adjustments we've made to our 2025 guidance, which are detailed in today's press release. To be clear, these updates do not reflect any change in the underlying performance, cost trend, or fundamentals of either Prospect or our legacy Astrana operations. Rather, they reflect timing considerations. Specifically, we now expect several payer contracts to transition from partial risk to full risk arrangements in the first quarter of 2026 instead of in mid-2025 as originally anticipated. At Astrana, we take a disciplined and collaborative approach to growth. We work closely with our payer partners to structure arrangements that are aligned, economically sound, and built for long-term success for both parties. We have not and will not enter into full risk contracts simply to accelerate the top line. We do so only when the data, infrastructure, and financial alignment are in place to manage that risk responsibly and sustainably. Accordingly, we are now updating our full-year 2025 revenue guidance to a range of $3.1 billion to $3.18 billion and adjusted EBITDA to a range of $200 million to $210 million. The key takeaway is that this is purely a matter of timing. Cost trends and clinical outcomes remain steady across both legacy Astrana and Prospect. Demand from our partners continues to be strong as reflected in several of the partnerships I just mentioned, and our pipeline continues to expand. We remain confident that the contribution from these contracts will be realized in 2026 and will further reinforce the strength and durability of our long-term growth trajectory. Before I hand it over to Chan for his financial review, I want to share a bit of our perspective on the factors that will shape performance in 2026. While we're not yet providing formal guidance, there are several dynamics already coming into focus. On the positive side, we expect tailwinds from improved Medicare Advantage rates, the realization of prospect-related synergies, and the continued maturation of our full risk cohorts, all of which should support steady revenue growth and margin expansion. Offsetting these, we do anticipate some headwinds in our Medicaid and exchange businesses, where evolving regulatory dynamics may create pressure on membership and rates in certain markets. We're working proactively with our plan partners and state agencies to navigate these transitions thoughtfully and to position Astrana for sustained performance across all lines of business. We remain confident that our focus on being a high-quality, responsibly managed care delivery platform will continue to differentiate Astrana and enable growth even in, and especially in, a more uncertain environment. Our 2026 planning reflects a balanced view that incorporates both the opportunities and the challenges ahead, and we look forward to sharing more detail when we report our fourth quarter results early next year. Moving over to a personal note, my family recently welcomed our first child, and we had the great privilege of doing so through the Astrana network. It was incredibly meaningful to experience firsthand the level of coordination and care our physicians, providers, and teams deliver each and every day. It reminds me of why we do what we do, building a healthcare system that truly supports physicians and patients through some of life's most important moments. In closing, I'm so proud of how our team continues to execute in a complex and evolving environment. Astrana's mission remains clear: to build a sustainable, coordinated healthcare platform that empowers physicians, improves outcomes, and lowers costs for patients and their communities. And we are delivering on that vision, building a healthcare system that truly works while driving industry-leading growth and profitability, one community at a time. With that, I'll turn it over to Chan to discuss our financials.

Thanks, Brandon, and good afternoon, everyone. Our third quarter results reflect strong execution and continued consistency across the business. We successfully integrated Prospect into our consolidated financials while maintaining solid performance across legacy Astrana operations. These results demonstrate the scalability of our platform and the discipline with which we continue to manage growth, risk, and capital deployment. Total revenue for the quarter was $956 million, representing growth of approximately 100% year-over-year and 46% sequentially. This increase reflects the addition of Prospect Health as well as steady organic growth across our Care Partners segment. Within our Care Enablement segment, we added material scale this quarter, more than doubling revenue quarter-over-quarter as Prospect brings more provider group clients for us to serve with our technology-enabled offerings. Adjusted EBITDA was $68.5 million, up 52% year-over-year and 42% sequentially, reflecting strong profitability even as the company grew rapidly. Medical cost trend performance in the quarter was stable and in line with our expectations across both legacy Astrana and Prospect. As we continue to bring these companies together over the coming quarters, there remains a material opportunity to bring Prospect's trend performance more in line with that of legacy Astrana. Operating expenses as a percentage of revenue declined modestly with the integration of Prospect and the continued automation of core administrative workflows. We remain on track to achieve our previously communicated synergy target of $12 million to $15 million of savings through 2026. We ended the quarter with approximately $463 million of cash and short-term investments and net debt of approximately $624 million, ahead of expectations following the close of the Prospect transaction. Our net leverage ratio at quarter end was approximately 2.5x on a pro forma trailing 12-month adjusted EBITDA basis, and we continue to expect to reduce leverage within the next 12 months through a combination of EBITDA growth and free cash flow generation. Cash flow from operations for the quarter was approximately $10 million, bringing our nine-month total to $118 million. We continue to expect full-year free cash flow conversion of approximately 40% to 45% of adjusted EBITDA, in line with prior commentary. Turning to guidance, we are updating our 2025 outlook to reflect the timing of full risk contracts with certain payer partners that have shifted from a 2025 start to a first-quarter 2026 start date. As Brandon mentioned, this update does not reflect any change in the underlying operating performance of either Prospect or legacy Astrana. For full-year 2025, we now expect total revenue in the range of $3.1 billion to $3.18 billion and adjusted EBITDA in the range of $200 million to $210 million. With that, we'll now open the call for questions.

Congratulations, Brandon, for the new addition to your family. My question is on the revenue guidance update driven by full risk transition timing delay. Were they related to one payer or multiple payers? You called out tech and data integration. Can you be more specific there? Were these contracts on the Prospect side or legacy Astrana? And do you have enough clarity at this point that this will definitely go live on 1/1? Or is there a chance of delay further? And related to that, does this delay impact how you are approaching your other partial risk to full risk transitions?

Jailendra, thank you for the question. Thanks for the warm message. So on the delay, the delay was strictly a timing issue. We remain committed to completing the transitions in the first quarter of 2026. It does relate to both legacy Astrana and the Prospect businesses as we're ensuring contract standardization across both of those businesses and consolidating them into one. The delay was not due to technical or technology or data issues. In fact, as I described in my prepared remarks, we are making significant progress in integrating Prospect's team and onboarding teams onto our AI-enabled platform, including the capability to have real-time utilization information and data on our population. Rather, around half of the delay, to dive a little deeper, is procedural in nature, such as regulatory filings and making sure that there is a bidirectional data and operational feed. Half of that delay, we expect to be finalized on 1/1. The other half were in late-stage conversations and do anticipate finalization in Q1 of 2026. And this is across several payer partners, not just a single entity. And I just want to remind everyone that we are very collaborative partners with our payers. We think that these contracts will mutually benefit both parties given our unique high-quality networks that are differentially well managed. And we're confident again that these contracts will commence in the first quarter of 2026. On the revenue item, a bit of seasonality on Prospect, but we're not expecting necessarily a step down in the core revenue of the business other than from these full-risk delays. Thanks, Jailendra.

And before I actually ask my follow-up quickly, just to make sure that EBITDA reduction of $10 million is also all because of this timing delay, right?

That's right. Core trend, medical cost trend in both legacy Astrana and Prospect businesses continue to come in line to slightly better than expected.

Okay. And then my follow-up is on the kind of congrats on the high-profile Intermountain Health partnership. Can you provide any more details around the economics there, level of engagement? What does this open up for you guys in terms of new market, new opportunities? Does this provide an opportunity down the road for Astrana to enter additional states where Intermountain has presence? Maybe spend some time there.

Sure. At the moment, we're very excited about the partnership. Intermountain is obviously a huge presence in Nevada as well as other states in that region. Our partnership today is about utilizing Intermountain's very established and large clinical infrastructure and network and combining that with Astrana's unique presence in our care delivery model in Las Vegas and in other parts of Southern Nevada in order to deliver a more coordinated and accessible approach to members in Nevada. So we're excited to expand our network to have Intermountain be a part of that network, and we think it's going to drive great outcomes in AEP as we speak and into next year. Going forward, we haven't had those discussions yet, but I do think that there are opportunities to continue expanding on that partnership and other partnerships with health systems. So, we're excited about that as well.

This is Matthew Mardula on for Ryan Daniels. First, Brandon, congratulations on your child. And it's great to hear that cost trends were reiterated for Astrana's full year. And in your prepared remarks, you mentioned higher Medicaid cost trends continuing to be above trend, although improvement from Q2. When do you expect Medicaid cost trends to come closer to that 4.5%? And we've just been hearing a bunch of different time frames. So curious to hear what you think. And then given the fourth quarter seasonality, what gives you that confidence that you have enough factored into the guide to account for it?

Thanks, Matthew. We continue to be encouraged by the trend that we're seeing the trend of the trend that is in Medicaid. Look, we do anticipate further continued headwinds in Medicaid as we have some instability in the regulatory environment at this moment. We do think that sometime in '26, perhaps late '26, we expect margins in Medicaid to stabilize. But at this moment, we're encouraged by the trend that we're seeing in terms of the improvement in Medicaid. So, we'll certainly update the market if anything changes there.

Great. And then with the new partnership group in Southern California that serves over 40,000 members across all lines of business, could you kind of provide a breakdown of the payer type of these 40,000 lives? Do they have a similar split as you? And then what's the kind of percentage of full risk lives? And then the kind of last one is, so do you believe this will be profitable from day one when you onboard them in the first half of 2026?

Sure. The payer mix for the new partnership in Southern California is similar to ours, consisting mainly of shared risk members rather than full risk members. We will assist them in managing their operations like we do with the rest of our Care Enablement business by charging a fee based on a percentage of revenues. We expect this to contribute positively to EBITDA early on, as our operating leverage in Care Enablement enables us to effectively integrate new members into the business.

Congrats on the quarter. This is Meghan Holtz on for Jack Slevin. Can you discuss the margins by segment in the quarter? Enablement looks very high, while Care Partners lagged a little bit. So, what's driving that?

Thank you for your question, Meghan. As Chan highlighted, the enablement business experienced significant growth in the third quarter. A key factor is that our legacy Prospect business had a substantial enablement division and a number of clients we have now integrated. We are optimistic about the potential of the Care Enablement business, where our AI-enabled technology platform is helping us manage members effectively and achieve a strong EBITDA margin, which we anticipate will continue to grow. We are also expanding the Care Enablement pipeline, having onboarded a new client, and there are several other clients that indicate a robust pipeline in this area. Regarding Care Partners, we expect margins to be slightly lower this quarter because, as previously noted, the legacy Prospect business operates at a marginally higher rate than our core business. This was all included in our guidance when we made the deal. Therefore, the blended figure will be a bit elevated. However, we see opportunities ahead to align that business more closely with the legacy Astrana Care Partners margin. Additionally, there is some seasonality to consider. Overall, these factors contribute to the strong performance and growth of Care Enablement, as well as Care Partners margins that are in line with or slightly above expectations.

Congratulations, Brendan. I want to ask about Medicaid. I know your cost trend guidance is progressing well, and it has decelerated from the second quarter. However, if we take a closer look, we are noticing increased member disenrollment trends on a national level. Specifically, California has shown a significant rise in monthly disenrollment trends in July and August, with about 90% attributed to procedural disenrollment, which is concerning. Are you observing any signs of this attrition in California or any changes in acuity mix? Additionally, with Elevance and United both expecting negative Medicaid margins for next year, I'm curious about how you are processing these developments and how they might influence your early outlook for 2026. You mentioned Medicaid as a headwind, but I would appreciate your detailed thoughts on this situation.

Thanks so much, Michael, for the question. We're tracking those numbers closely, too, from California that I think you're referencing. Overall, disenrollment from Medicaid year-to-date has not been as severe as our initial expectations, nor as high as you're probably seeing in the California DHCS reports in aggregate. Things are still early. So, we'll see how 2026 progresses. But year-to-date in 2025, we're seeing an annualized mid- to high single-digit attrition rate in Medicaid in terms of eligibility and enrollment. Part of this, I think there are two reasons. First, really that these are real Medicaid members that we have built a longitudinal relationship with. We've worked with them over time, whether through line of business change or as they get older, we really know these members, and we have known them for a long time. It's part of the strength of our model. So, we think that there's a lot of work that we're doing in order to ensure that those who are qualified legitimately continue to be enrolled in Medicaid even in the face of regulatory headwinds. In addition, as members have been disenrolled, we do believe also that plans are retaining members with us at a disproportionate rate because they want to keep members enrolled in our high-quality network and our well-managed network. So, with all that being said, we'll continue to observe what happens in 2026, having done some scenario planning internally to deal with these potential headwinds in '26. But disenrollment in that mid- to high single-digit range is not as bad as we think some of the data from the statewide reports are showing, Michael.

Perfect. I have one more question. Looking ahead to 2027, it feels a bit premature, but my early thoughts on the effective growth rate suggest it could be quite strong. The elevated trends for fee-for-service in 2025 appear to be quite high. I think a high single-digit effective growth rate could be achievable for 2027. With that in mind, MA is likely to represent nearly two-thirds of your total revenue, and your MA cost trend is below 4.5%. This leads me to think there could be a significant margin benefit across most of your company due to the excess rates on top of your trend. So, I have a couple of questions. First, what is your current position regarding MA margins? Secondly, how should we anticipate margins evolving into next year? I'm expecting margin expansion because the rates are positive, the trends are stable, and benefits should be reduced again. Finally, regarding 2027, I'd like to hear your perspective on how a strong rate notice could enhance margins and support the goal of achieving your 2027 EBITDA target of $350 million.

Thank you for your question, Michael. I recognize your expertise in the evolution of MA rates for 2026 and 2027. To address your inquiry, I'll break it down into a few parts. First, while 2026 saw a nice uptick in MA rates, we believe it did not fully reflect the ongoing trend. For context, the ACO REACH RTA report indicates a nationwide trend of about 8% to 10%. Although the report is positive, we still consider it slightly underfunded and see potential for further growth in the 2027 rate announcement that you mentioned. Currently, we're not disclosing margins by line of business, but we are optimistic that margins can stabilize and possibly expand in 2026 and 2027 due to the robust rate increases we're experiencing. As I have frequently emphasized, we do not face significant headwinds regarding V28, which gives us confidence in our growth potential if rates continue to meet expectations. It’s a bit early to define exactly what that growth will look like since we are still navigating AEP and evaluating our growth alongside the shifts in distribution across Stars in our plan partners. However, as I pointed out in the prepared remarks, we see a possible headwind there. We remain hopeful that the 2027 rate notice will also be strong, ideally in the mid- to high single digits, which is our current expectation.

Cool news on the kiddo, Brandon. Just I want to make sure about these contracts, I understand it. So, you lowered the full-year revenue guidance by $60 million at the midpoint, but you also lowered the EBITDA by $15 million. And assuming that's all from these contracts, that implies like a 25% margin assumption and like a run rate $60 million EBITDA on these contracts. So, is there just other pieces or kind of moving parts that are included in the guidance change? Or are those kind of the right numbers to think about?

Thank you for your question and your supportive message. We estimate that the run rate is around $15 million for the second half of the year, which brings us closer to a $30 million annual run rate. We anticipated that revenue would exceed expectations, so the extent of the decline is not as significant as you might assume based on the margin outlook. These are the main points regarding the full-risk delay. We are looking at a $15 million impact over six months that we expect will be completely resolved by the first quarter of 2026, and the margin isn't as substantial in that business as you might think.

Okay. And then just one more thing. On the Prospect commentary, I think you said it kind of beat standalone expectations. I'm sorry if I missed this, you already said it, but does that include any of the $12 million to $15 million synergies that you called out that you're reiterating? Or is that just like literally as a standalone entity, it exceeded expectations? And maybe just a sense on how much it exceeded, if you could.

Sure thing. I'm not discussing the synergies in my previous comment. I was referring to the medical cost trend, utilization trends, and the financial performance of the standalone Prospect business. The results were slightly better than expected and aligned with our due diligence. We are pleased to see this continuation and anticipate further synergies impacting both revenue and expenses, along with opportunities to enhance the medical loss ratio and performance into 2026 and 2027. But to clarify, the comment was specifically about the standalone business for Prospect.

This is Thomas Walsh on for Andrew. I believe you just quoted the legacy Astrana blended cost trend figure. Could you share the relevant Prospect figure? And is the delta between those due to any structural difference between the member populations?

We haven't shared the cost trend number for the standalone Prospect business. Part of that is that the integration is combining some of the businesses. Part of the acquisition was an asset purchase. We continue to expect it to be several points higher on trend than the legacy Astrana business. We don't think that necessarily this is something structural in nature. We believe that over time, as we combine the contracts, which we're doing now, and as we continue to combine and onboard the team into our clinical pathways and our technology platform, there is opportunity to move that margin to look more similar to the legacy Astrana business. And again, the Prospect business did perform in line with our expectations, both as a result of the diligence as well as expectations after we've gotten our hands around it. So, everything is in line, and we continue to look forward to improving the performance of both businesses as a combined entity in Q4 and into 2026.

I'm sorry if I missed this, but what was your medical trend in the quarter? And how does that compare to expectations? Just any color between the commercial, Medicaid and Medicare for that trend? And then what are your expectations for trend in '26?

Thanks for the question. The trend across all lines of business, blended weighted average was just under 4.5%, continues to be in line with our expectations for the legacy Astrana business. Medicare continues to be better. Medical Medicaid, as I mentioned, has sequentially improved. So, trend decelerated versus Q2, and continues to be going in the right direction, and commercial is stable as well. So, we're very pleased with our ability to manage cost trend effectively for our population. Going forward into 2026, we're not sharing our trend expectations specifically yet. I do think that we're going to be conservative just in the face of some of the regulatory potential headwinds that are coming down the line for Medicaid and exchange, but it's a bit early to share the exact trend assumption at this time. We certainly will do that on our Q4 earnings call.

That's very helpful. And then do you have any exposure to the exchanges? Another value-based care company this evening who reported indicated that exchanges could be very material to their '26 earnings. Is there any exposure there or not? I don't think so.

Thanks, Dave. There is some exposure. We do have exchange membership, but it's a fairly small part of the business, around 3% of revenue. So, we think it's a manageable exposure to the exchange.

Great. And then what percent of claims are complete so we can have confidence that there's not going to be any sort of negative surprise in terms of claims costs in the fourth quarter?

Our completion rates are pretty consistent quarter-over-quarter, over 85%. As a reminder, we haven't had negative prior period development for many quarters in a row now. I can't even count how many, and we continue to be consistent in terms of our medical cost trend forecasting and our ability to actually manage those costs. Notably, we also don't have any negative prior period developments on risk adjustment either. And again, we think that's a reflection of our consistent and conservative approach in terms of risk adjustment.

Congrats, Brandon. So, I wanted to ask about the implications of the reconciliation bill around work requirements. I'd assume California will be one of the slower there to adopt that. But have you heard anything about how they plan to implement it or the speed that they plan to implement?

Thank you. What we've been hearing is probably similar to all of you is that this is probably a 2027 item as currently constructed. So, we're not necessarily seeing the impacts of that yet. We are anticipating potential headwinds next year if there are other related items such as the UIS status members. But at this moment, we're anticipating this to be a 2027 item. Sure thing. I know there's been discussion about a potential V29 or a further change to the risk adjustment model. As I mentioned before, we feel very comfortable with our risk adjustment. If anything, we actually believe our RAF to be almost too low. So, we really don't think that V28 has hurt us. And even a further V29, we're not extremely concerned about, frankly. We think that there remains to be opportunity to continue to correctly code our members and continue to improve the way that we take care of our patients over time, regardless of the risk adjustment model that's being implemented.

This is Zach on for Matt. Congratulations, Brandon. Just wanted to touch on the transition to full risk. Based on the delays, I think that percentage ticks up in the first quarter. But do you have any guideposts or frameworks that you can provide in terms of how to think about that shift to full risk through the remainder of '26?

Yes, thanks for the question. We're going to continue the transition to full risk as expected. These contracts, which we expected to turn on in mid-2025, ended up being delayed until the first quarter of 2026. But going forward, we do expect that high 70s percent of revenue coming from full risk to remain in that range going into '26. There are several contracts that we had anticipated going live in 2026, separate from the ones that we had discussed. And there's no danger or indication that that's not going to happen. We're also seeing success in moving contracts to a delegated model even outside of California. As I mentioned before, Texas is starting on fully delegated, which means we're paying claims, we're doing ops. We have full data visibility, very similar to the model we've successfully run in other parts of the country, starting 1/1 of '26 as well. So by and large, contractual movements are as expected. Unfortunately, a slight delay on these particular items this year.

Congrats to the new dad, Brandon. My questions relate to, I guess, growth. So, you doubled revenue year-over-year. Much of that was Prospect. So, if we back out Prospect, what are we looking at for organic growth mid-single digits?

Gene, thank you for the question. Stripping out every aspect of the Prospect deal can be a bit challenging in some areas. However, I believe the core Astrana business continues to experience growth in the mid-teens to low-teens range. We had previously guided Prospect's growth to be in the mid- to high single digits. This is without factoring in some full risk movements and AEP so far. We are excited about the growth across all of these businesses and, more importantly, about managing that growth effectively and steadily in terms of EBITDA. Sure, Gene. No, not really. This is a separate client that had no relationship necessarily to us or to Prospect, just one of the clients in our pipeline. So that pipeline continues to be strong. We continue to expand our Care Enablement business. We're building a lot of technology around ensuring that, that offering is attractive and is well-priced. And we think that's an area for growth as it has been in the past going forward as well.

There are no further questions at this time. I'd like to pass the call back over to management for any closing remarks.

Thank you so much. To conclude, I wanted to emphasize that Astrana continues to manage medical costs well. We continue to show that the value of Prospect is meaningful, and that integration is going smoothly. We do not believe that the transition to full risk is an ongoing issue. It's a one-time delay and does not reflect any of the cost trend issues or medical cost issues in the core Astrana or the core Prospect businesses. And we're very happy to share, as Chan mentioned in the prepared remarks, that we are now down to approximately 2.5x net leverage on pro forma adjusted EBITDA, which is far ahead of what the timing was when we announced the deal. So, we continue to focus on deleveraging, continue to focus on execution of the business, and we look forward to continued execution in future quarters in 2026. Thank you all for joining the conference call today, and I look forward to speaking to many of you in the coming months.

This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation.