P3 Health (PIII) Q3 2026 Earnings Call Transcript

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DATE

Monday, Nov. 9, 2026

CALL PARTICIPANTS

• Investor Relations - William Hoover
• CEO - Aric Coffman
• Amir Bacchus
• Leif Pedersen

TAKEAWAYS

• Adjusted EBITDA -- $20.9 million for the third quarter, compared to an Adjusted EBITDA loss of $45.9 million in the prior year quarter.
• Full-Year Adjusted EBITDA Guidance -- Increased to a range of $90 million to $110 million, raising the midpoint to $100 million due to underlying year-to-date performance and favorable prior period settlements.
• Medicare Advantage Medical Expense -- 0.7% below the full-year 2025 level on a normalized basis through the first nine months of the year, reflecting effective medical cost management.
• At-Risk Membership -- Approximately 105,000 members, representing a 9% year-over-year decrease driven by intentional network and payer rationalization.
• Total Revenue -- $396.3 million, a 15% increase year over year driven by improved network economics and rate progression.
• Capitated Revenue Per At-Risk Member -- Increased 18% year over year, reflecting maturation of burden of illness performance and improved payer funding.
• Medical Margin -- $43.9 million or $140 per member per month, which included the favorable impact of payer settlements recognized during the quarter.
• Underlying Adjusted EBITDA -- Approximately $10 million for the quarter, after excluding $7 million from a 2025 CMS ACO reconciliation and a $5 million liability release.
• Total Lives Under Management -- Approximately 133,500 total lives, including 28,000 lives managed through service arrangements that serve as a pipeline for future at-risk relationships.
• Adjusted Medical Loss Ratio -- Approximately 90.6%, after adjusting for favorable prior period items recognized during the period.
• Cash and Cash Equivalents -- $43.9 million as of Sept. 30, representing an increase from $25.0 million at the end of 2025.
• Outpatient Prior Authorization Avoidance -- Improved 68% per member since the first quarter, representing significant gains in utilization management.
• Inpatient Observation Rate -- Increased from 24% to 34% since the first quarter, reflecting improved management of inpatient stays.
• Quality Performance -- Improved approximately nine points in blood pressure control and diabetes control, both of which are triple-weighted measures for patient outcomes.
• Value Creation Opportunity -- $200 million identified across clinical execution, payer economics, and operating efficiency for the existing membership base.
• Adjusted Operating Expense -- $34.6 million for the quarter, compared to $32.0 million in the prior quarter, driven by clinical infrastructure and data investments.
• Patient Engagement -- 91% of total patients and 97% of high-risk members seen by teams year to date to coordinate care.
• Full-Year Revenue Guidance -- $1,525 million to $1,600 million for the 2026 fiscal year.
• Full-Year Medical Margin Guidance -- $260 million to $300 million for the 2026 fiscal year.
• ACO Settlement Impact -- $13 million reduction in medical expense related to the 2025 CMS ACO reconciliation process.

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RISKS

• Bacchus warned that medical costs increased in specific regions, stating, "We did see probably some of those costs increase more in Nevada than probably other markets," primarily due to outpatient and professional services.
• Pedersen reported a shift in the medical trend, stating, "medical expense stepped up during the quarter compared to the first half, particularly across outpatient and professional services."

SUMMARY

P3 Health Partners Inc. (NASDAQ:PIII) achieved its third consecutive quarter of Adjusted EBITDA profitability, reporting $20.9 million for the third quarter. Management stated that the results were driven by improved payer economics, disciplined medical cost management, and favorable prior period settlements. The company raised its full-year Adjusted EBITDA guidance midpoint to $100 million while identifying a multiyear pipeline of value creation opportunities. Management noted that operational focus remains on increasing density in existing markets and executing a capital-efficient entry strategy in new geographies such as Nebraska, while teams work to mitigate increased medical cost pressure observed in the third quarter.

• The company has identified a multiyear value creation pipeline totaling $200 million from internal improvements. CEO Coffman stated, "We have identified more than $200 million of potential value creation across payer economics, clinical execution, and operating efficiency."
• Market expansion is following a repeatable, capital-light model as demonstrated by the Nebraska launch. Coffman noted that Nebraska serves as the "model for this approach" by starting with delegated operations before moving to full-risk arrangements.
• Clinical leadership is being strengthened to address medical cost trends. Management welcomed Dr. Mike Millie as the new Chief Clinical Officer to lead clinical execution.
• Engagement with high-risk populations remains a priority for managing costs. Amir Bacchus noted that clinical teams are "performing at-home assessments to reach high-risk patients who are not seeing their primary care physician."
• Growth in existing markets is being prioritized due to its low incremental cost. CEO Coffman stated that expanding in legacy footprints "adds membership at low incremental cost" because it leverages existing infrastructure and care teams.

INDUSTRY GLOSSARY

• Adjusted EBITDA: A non-GAAP financial measure that starts with net income and adds back interest, taxes, depreciation, amortization, and other items like equity-based compensation or warrant gains.
• At-Risk Membership: Patients for whom the company receives a fixed fee and assumes the financial risk for their medical care.
• Burden of Illness: A measure of the health status and clinical complexity of a patient population, used for risk-adjusted reimbursement.
• Capitation: A payment arrangement where a provider is paid a set amount for each enrolled person assigned to them, regardless of whether that person seeks care.
• CMS ACO: Centers for Medicare & Medicaid Services Accountable Care Organization, a group of doctors and hospitals that provides coordinated high-quality care to Medicare patients.
• Medical Loss Ratio (MLR): The percentage of premium revenue spent on medical claims and quality improvement activities.
• PMPM: Per member per month, a standard metric in healthcare used to normalize revenue or costs across a member population.

Full Conference Call Transcript

Operator: Please note, this event is being recorded. I would now like to turn the conference over to William Hoover with Investor Relations. Please go ahead.

William Hoover: Thank you, operator, and thank you for joining us today. Before we proceed with the call, I would like to remind everyone that certain statements made during this call are forward-looking statements under the U.S. Federal Securities Laws, including statements regarding our financial outlook and long-term target. These forward-looking statements are only predictions and are based largely on our current expectations and projections about the future events and financial trends that we believe may affect our business, financial conditions, and results of operations. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations.

Additional information concerning factors that could cause actual results to differ from statements made on this call is contained in our periodic reports filed with the SEC. The forward-looking statements made during this call speak only as of the date hereof, and the company undertakes no obligation to update or revise these forward-looking statements. We will refer to certain non-GAAP financial measures on this call, including adjusted operating expense, Adjusted EBITDA, Adjusted EBITDA per member per month, normalized Adjusted EBITDA, medical margin, medical margin per member per month, and cash flow. These non-GAAP financial measures are in addition to and not a substitute for or superior to the measures of financial performance prepared in accordance with GAAP.

There are a number of limitations related to the use of these non-GAAP financial measures. For example, other companies may calculate similarly titled non-GAAP financial measures differently. Please refer to the appendix of our earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures. Information presented on this call is contained in the press release that we issued today and in our SEC filings, which may be accessed from the Investor page of the P3 Health Partners website. I will now turn the call over to Aric Coffman, CEO of P3 Health Partners.

Aric Coffman: Good afternoon, and thank you for joining us today to discuss our third quarter results. It has been two and a half years since I began leading P3, and the changes we have made across the business continue to build on one another. Our third quarter results reflect that work, with $21 million of Adjusted EBITDA, bringing our year-to-date Adjusted EBITDA to $101 million. As a result, we are raising the low end of our full-year Adjusted EBITDA guidance to $90 million, increasing the midpoint to $100 million. Our focus now is on building upon the durable foundation we have created.

We have four areas of focus: medical cost management, quality and burden of illness documentation, disciplined growth, and refining our operations through people, process, and technology. I want to thank our teams across the country for the focus and care they bring every day, and our provider and payer partners who share our commitment to delivering better care for the patients we serve. There are two areas of the business I want to highlight that drive our results: operational execution and growth. I'll start with our execution. First and foremost, our year-to-date Medicare Advantage medical expense is 0.7% below the full-year 2025 medical expense on a normalized basis.

In other words, this means we are bending the medical cost curve through the first three quarters of the year. Our combined approach to medical cost management, quality execution, and accurate documentation create a compounding impact. With peers in our sector reporting medical cost trend of 7% or more, this is a meaningful differentiator for P3. This quarter, we showed progress across our model in the following areas. Utilization management had its strongest quarter of the year, with meaningful gains in how we manage both inpatient stays and outpatient services. Compared to Q1, our inpatient to observation rate is up more than 10 points, and outpatient prior authorization avoidance has improved 68%.

Quality had its strongest quarter of the year, with our highest weighted outcome measures moving in the right direction. We saw nine-point improvements over the prior year in both blood pressure control and control of diabetes, which are two triple-weighted measures. Patient and provider engagement remains ahead of plan, with our teams having seen 91% of our patients year to date and 97% of high-risk members. We are enhancing our AI-enabled technology to improve the point-of-care experience for clinicians and improve outreach capabilities to our patients. In addition, we continue to invest in our P3 Restore program, aimed at directly supporting our clinician partners. Clinical leadership and analytics continue to deepen.

We built an enhanced medical economics function focused on more quickly identifying areas of higher cost and utilization. That then allows us to put interventions in place against the findings. Additionally, we continue to invest in talent and are thrilled to welcome Dr. Mike Millie as Chief Clinical Officer to lead and strengthen our clinical execution. Turning to growth, our growth comes from two sources: expanding in the markets where we already operate and entering new markets in a capital-efficient and deliberate way. First, expansion in existing markets. We grow our legacy footprint in three ways: new plans in counties adjacent to our current service areas, increasing provider density, and taking on more delegated functions with our current payer partners.

This growth runs on infrastructure, care teams, and relationships we already have in place, so it adds membership at low incremental cost. Each function we take on also gives us better returns by controlling medical costs and quality outcomes more tightly. Second is smart growth in new geographies. New market entry is a repeatable model, partnership, development, and then a move to meaningful risk on a glide path. We start with delegated operations for plan partners and building the clinical and operational infrastructure. Then we expand the scope of delegated functions and finally move to full-risk arrangements.

This sequence keeps growth capital-light and gives us time to build network relationships to understand the local market before we take on full risk. Nebraska is the model for this approach. Since launching in May, we have put utilization management, payment integrity, coding, and quality programs in place. On top of those functions, we have added our clinical programs, including Senior Wellness Centers that provide direct patient care, more points of access, and high-risk clinical programs. Demand for this model is strong. There are more than 60 mid-sized Medicare Advantage plans facing similar pressure on medical cost and quality. Our solution manages more of the levers that drive performance with a clear path to margin first and membership growth after.

We are actively pursuing opportunities in our pipeline, sequencing them at a pace our infrastructure supports, and on terms that reward the value we create. Overall, our third quarter results reinforce the consistency of the earnings improvement we have established this year, and we enter the final quarter with momentum and a stronger operating foundation. The core levers that drive our performance are demonstrating measurable results, and we continue to see substantial opportunity within our existing book of business. We have identified more than $200 million of potential value creation across payer economics, clinical execution, and operating efficiency. As we execute on these opportunities, we expect them to translate into material earnings growth and more consistent financial performance.

We intend to provide greater clarity on the timing, expected realization, and earnings contribution of these opportunities early in 2027. With that, I'll turn the call over to Amir to discuss our clinical performance.

Amir Bacchus: Thank you, Aric. Our year-to-date medical cost performance continues to compare well against the industry. As expected, the third quarter medical expense ran higher than the first half of the year, driven primarily by outpatient and professional services, while inpatient costs tracked in line with expectations. Within outpatient, cardiovascular procedures are the largest driver. Our response, built on the care enablement model, has two parts: targeting the specific drivers of the increase and continuing to strengthen the programs behind our year-to-date performance. First, we are going directly after those drivers. Our teams have identified where costs are rising and are focused on mitigating them in the fourth quarter and into next year.

One of our most effective tools is our high utilizer model, which identifies members with repeat hospital, emergency, and observation visits down to the provider they see. Our clinicians and care managers step in earlier and direct care to the appropriate site. We are focused on transitions of care, including medication reviews and care coordination for patients being discharged from a facility. For those patients with barriers to care, our teams are performing at-home assessments to reach high-risk patients who are not seeing their primary care physician. Second, utilization management has its strongest quarter of the year. Since the first quarter, our outpatient prior authorization effectiveness has improved 68% per member.

On the inpatient side, our review teams raised the rate at which appropriate hospital stays moved to observation from 24% to 34%. Third, we continue to execute on quality. We are submitting supplemental data at more than twice last year's pace, and our quality outreach reached more than 76,000 members, or 96% of our MA members in the quarter. That work is showing up where it matters most for patient outcomes. Blood pressure control and diabetes control, two of our most heavily weighted measures, are each up approximately nine points over last year. Better control of these measures means better control of overall medical spend and improvement in outcomes.

Finally, we continue to invest in our clinician partners through P3 Restore. In the third quarter, we added 23 clinicians to the program's one-on-one coaching and education program. Their feedback continues to be strong, especially around work-life balance, leadership, and a renewed sense of purpose. On the backdrop of provider burnout, about 40%, and a physician shortage, this is important for long-term success. Clinical foundation behind our year-to-date performance is in place and scaling. Under the leadership of Dr. Mike Millie, our new Chief Clinical Officer, our teams are focused on the levers that provide the highest quality care to patients at the lowest cost to the system, and that focus will carry through the fourth quarter and into 2027.

With that, I'll turn the call over to Leif.

Leif Pedersen: Thank you, Amir, and good afternoon. Q3 marked our third consecutive profitable quarter. We delivered $21 million of Adjusted EBITDA. Two items drove a meaningful part of that result. First, approximately $7 million of favorable medical margin from the 2025 CMS ACO reconciliation. Second, approximately $5 million of non-cash income from a liability release associated with our ACO joint venture. Excluding these and other prior period and non-recurring items, underlying Q3 Adjusted EBITDA was approximately $10 million. Importantly, the underlying business remained profitable despite medical expense pressure in the quarter. Year-to-date performance continues to reflect improved payer economics, strong clinical execution, and progress in utilization management and payment integrity.

Based on our year-to-date results and current expectations for the fourth quarter, we are raising our midpoint guidance from $95 million to $100 million. I'll cover three areas today: our Q3 financial performance, liquidity, and our outlook for the remainder of 2026. Starting with membership, we ended the third quarter with approximately 105,000 at-risk members, compared to approximately 116,000 in Q3 of 2025. The year-over-year decline primarily reflects deliberate portfolio actions taken in 2025 and early in 2026 to exit or reduce exposure to arrangements that did not meet our economic thresholds. As a result, our current membership base is more concentrated in payer and provider relationships where we believe the P3 model can generate attractive and sustainable economics.

In addition to our at-risk membership, we manage approximately 28,000 lives through management services arrangements, creating a potential pipeline for deeper future at-risk relationships and bringing total lives under management to approximately 133,000. Moving to the top line, third quarter revenue was approximately $396 million, compared with $345 million in the prior year quarter, a 15% increase. Capitated revenue per at-risk member increased approximately 18% year-over-year, reflecting rate progression, improved payer economics, and continued maturation of our burden of illness performance. Total revenue also benefited from growth in other revenue streams, primarily management services and incentive-related revenue, along for fee-for-service and care coordination activity. Against that revenue backdrop, medical expense was the most impactful operating trend in the quarter.

Medical claims expense was approximately $322 million. The quarter included favorable prior period adjustments associated with the 2025 CMS ACO reconciliation noted earlier. Year-to-date, Medicare Advantage Part A and B medical expense remains approximately 0.7% below the full year 2025 level on a normalized basis. However, medical expense stepped up during the quarter compared to the first half, particularly across outpatient and professional services. Improving that trend is one of our primary operating priorities as we finish the year. As Amir described, we are focused on specific areas driving the increase through utilization management, care management, payment integrity, and targeted Med Econ work. Medical margin for the quarter was approximately $44 million, or $140 Per Member Per Month.

Medical loss ratio was approximately 90.6% after adjusting for the favorable prior period items recognized during the quarter. While medical expense increased during the quarter, our year-to-date economics continued to benefit from improved payer funding, utilization management, and payer payment integrity processes, and disciplined clinical execution. Beyond medical costs, we continue to manage the overall cost structure closely. Adjusted operating expense in the quarter was approximately $35 million, compared to approximately $32 million in the prior quarter. The increase reflects continued investment in our data and clinical capabilities and the build-out of our Nebraska market infrastructure. We continue to invest in capabilities that directly support medical costs, quality, and burden of illness performance.

At the same time, we are reducing back office and third-party spend to keep our cost structure aligned with the size and needs of the business. Bringing those components together, Q3 Adjusted EBITDA was $21 million, compared with an Adjusted EBITDA loss of approximately $46 million in the third quarter of 2025. As outlined earlier, underlying Adjusted EBITDA for the quarter was approximately $10 million. On a year-to-date basis, Adjusted EBITDA was $101 million, compared with Adjusted EBITDA loss of approximately $85 million through the same period in 2025. After excluding prior period items and specific non-recurring operating costs, underlying Adjusted EBITDA was approximately $29 million. For us, that is an important measure of the progress we have made.

The underlying business has generated positive EBITDA in each of the first three quarters of 2026, giving a stronger operating base as we move through the fourth quarter and into 2027. With that, let me move to liquidity. We ended the quarter with approximately $44 million of cash and cash equivalents. We continue to actively manage liquidity and capital requirements against our operating plan while maintaining the investments necessary to improve the underlying performance of the business and preserve appropriate financial flexibility as we move into 2027. That brings me to our outlook for the balance of the year. We are raising the low end of our full year 2026 Adjusted EBITDA guidance from $80 million to $90 million.

Resulting in a revised range of $90 million-$110 million, and increasing the midpoint from $95 million to $100 million. The revised outlook reflects our year-to-date reported performance, including favorable prior period items recognized during the year, as well as our current expectations for the underlying business in the fourth quarter. Our outlook incorporates the higher medical cost run rate experienced in Q3 and our current expectations across revenue, medical expense, and operating costs. It also assumes continued execution against the clinical utilization management, payment integrity, and cost initiatives we have discussed today.

Our priorities for the remainder of the year remain clear: improve Medicare Advantage medical cost performance, maintain discipline around operating expense, continue strengthening payer economics, and build on positive underlying earnings performance generated through the first three quarters. With that, I'll turn it back to Aric.

Aric Coffman: Thanks, Leif. Before we open the line for questions, I want to leave you with three takeaways. First, our clinical and operational execution is delivering. The structural and clinical work we set out to do two years ago is now embedded in how we run the business. Utilization management and quality have their strongest quarters of the year, our clinical programs continue to scale, and our differentiated medical cost trend remains below what peers are reporting. Second, we are growing in a smart and balanced way. We are deepening the partnerships in our existing markets. Nebraska is proving our framework in a new market, and the opportunity to bring that framework to more health plans is significant.

We will pursue it at a pace our infrastructure supports and on terms that reward the value we create. Lastly, 2026 has set the baseline for 2027 and beyond. Our year-to-date results and an upward revision to full-year guidance midpoint reflect what our teams have built over the last two years. Combined with the $200 million of value creation we have identified, our performance reinforces our confidence in the growth and earnings potential of P3. With that, operator, please open the line for questions.

Operator: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. The first question comes from Ryan Langston with TD Cowen. Please go ahead.

Ryan Langston: Hi, thanks. Good afternoon. I know it's a little early, but maybe how should we think about any sort of building blocks for 2027? Other than PYD, any other one-timers to keep in mind? And Aric, I think you talked about expanding and growing the membership base. Maybe give us some insight into what enrollment could look like next year, and remind us if those lives come on at sort of care management arrangements or full risk.

Aric Coffman: Yeah. Hey, thanks for the question, Ryan. There's a few of those things that we won't have full clarity into until we get obviously through open enrollment, and that process is underway right now. We'll be happy to detail some of the things that we see as we head out of open enrollment and get into the beginning of 2027. We'll have a better line of sight. I think that the dollars that we pointed to in terms of what we see as additional opportunities within the existing business, we'll also get into some greater clarity on that for you as we head into the beginning of next year.

Ryan Langston: Okay. Then you noted that cost trends kind of stepped up a bit in the quarter. Maybe can you just give us a sense how cost trend has materialized through the year by quarter, sort of on a year-over-year basis? And maybe was there any sort of particular geography that's driving that increase, or was it more broad-based?

Aric Coffman: Leif, do you want to hit on that one?

Leif Pedersen: Yeah. Hey, Ryan. As we noted, through Q2, when we did Q2 earnings, you will note that we were, when we compared 2026 full-year PMPMs to 2025 full-year PMPMs, we were at 1.7% favorable on a year-over-year basis. Through Q3, that dropped down to 8.7% favorable on a year-over-year basis. Q3 did show some increased pressure on the MedEx side of the business, and predominantly on the Part B side of the business, we are seeing some increased utilization there.

Aric Coffman: Amir, do you have any comment?

Amir Bacchus: Yeah. Real quick, Ryan, as well. When you asked about geography, we did see probably some of those costs increase more in Nevada than probably other markets, which we are looking deep into, especially in regards to that outpatient utilization and some of the professional services in that market.

Ryan Langston: Okay, that's helpful. Then just, if I could squeeze one more in. Just, Aric, on the $200 million of identified opportunity, appreciate you don't want to explicitly talk about it until you give 2027 guidance, but I guess maybe just any other high-level insight into if that's more sort of clinical angle, is it operational? Just any other detail you could give us, I think, would be helpful just to kind of understand how you're sort of looking at 2027, at least at this point. Thanks.

Leif Pedersen: Hey, Ryan. Leif, let me take a first stab at it, and I'll let Aric and Amir kind of augment where necessary. The way I would think about that $200 million is, that's going to be a multi-year realization into the P&L. That timing's going to depend on execution, obviously. We, like you said, will provide further guidance when we do our 2027 guidance. But I'd really think of it as the three buckets that Aric talked about. One is our clinical execution, which is really our burden of illness documentation quality as a continued areas of focus, care management, utilization management, and PI.

Those kind of all fall into that bucket, and I would say that preponderance is the biggest piece of that value creation from a proportionality perspective to the other two buckets, which I'll talk about. The second largest is going to be kind of provider economics, and that would just be our continued maturation on our payer contracting with our payers, as well as our in-network contracting opportunities, and then some relatively small portion of how quality flows into those contracts as well.

The last piece, which is probably the smallest portion of all those value levers moving forward, but not necessarily unimportant, is our operating efficiency, which is really our OpEx costs and how we think about our structure moving forward and how we're being efficient with the dollars that we're given to spend to drive that return on investment.

Ryan Langston: Okay, thank you.

Aric Coffman: Thanks, Ryan.

Operator: The next question comes from Ben Haynor with Lake Street Capital Markets. Please go ahead.

Ben Haynor: All right. Good afternoon, gentlemen. Thanks for taking the questions. Just following up on Ryan's last question there. On the $200 million in opportunities, is that for the existing membership? Then, you talk about bending the cost curve. How much meat on the bone is left there? Is that something that you can continue to kind of track at very low or even flat growth year over year?

Aric Coffman: Yeah. Hey, this is Aric, Ben. Thanks for the question. In terms of the dollars, yes, that's reflective of the existing membership base that we have, so that's where we point those dollars. Then on the second, I think the exciting part is, we still have a lot in terms of executional opportunities, clinical programs that we're launching and that are maturing within our markets. You probably also heard that we've made significant investments into our clinical bench. So, we added in Dr.

Mike Millie to come in as a Chief Clinical Officer, and that's going to be a really important part of attacking some of the opportunities that still exist within medical cost, and really getting ahead and preventative on some of the things that sometimes just happen. That's going to be done through high-risk programs and being able to get care delivered more closely to those high-risk patients, whether that's in the home or through our Senior Wellness Centers or clinics in the markets.

Amir Bacchus: Ben, this is Amir. I would add one or two things to what Aric said. So, definitely everything that Aric and Leif described is spot on. Couple other quick things. We continue to see more delegation, which is great. As we continue to see more delegation, it gives us more of the opportunity to help manage and be tighter on medical expense. We know some of the issues that we had in Nevada. We have our clear line of sight as to some of those things that are going on, especially from our Med Econ department, which we stood up even more with our new clinical leadership at the same time.

So, a lot more information that we're seeing to be able to get on things quicker, to manage more expeditiously, to drive results.

Ben Haynor: Okay. Got it. That's helpful. Then just wondering how the conversations are going with potential plan partners to get more of these agreements, a la Nebraska. Are those progressing? Should we expect to hear more about those in the near future? What's the right way to calibrate that?

Aric Coffman: Yeah, Ben, I think what we can comment on is that we're in active conversations. I think we've said publicly there's well over 60 mid-sized plans that are in a similar type of situation with a lot of lives, millions of lives in those plans, and they're looking for solutions. So, it's an exciting opportunity.

Ben Haynor: Okay. Got it. And then a quick housekeeping one. It looks like other medical expense came down, I don't know, $8 million or something sequentially. What is driving that and can they continue at the Q3 level?

Leif Pedersen: Hey, Ben, it is Leif. Part of what is driving that from a reported basis is some of the one-time ACO true-up that happened in Q3. So, that $7 million that I outlined in my opening remarks was a net number to medical margin, and there was about $13 million of medical expense that actually reduced in the quarter related to that portion of the ACO 2025 settlement.

Ben Haynor: Okay. Got it. Thanks for taking the questions, gentlemen, and congrats on the progress.

Aric Coffman: Thank you very much.

Leif Pedersen: Thank you.

Operator: This concludes the question-and-answer session. I would like to turn the conference back over to Aric Coffman for any closing remarks. Please go ahead.

Aric Coffman: Yeah, I just want to thank everyone for being on with us today, and we look forward to seeing you again next quarter. Goodbye.

Operator: Conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

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