agilon health’s first quarter was marked by a cautious market reaction, as management highlighted a decline in membership and ongoing margin pressures. CEO Steve Sell attributed the year-over-year revenue decrease to previously announced partnership and payer exits, as well as a deliberate slowdown in membership growth to limit underwriting risk. The company’s performance was further shaped by elevated medical cost trends, particularly in inpatient admissions and Part B drug spend. Sell noted, “We are pleased with our first quarter results, demonstrating both the resilience and growth potential of our business model,” but acknowledged that cost trends “remained elevated” and required ongoing management focus. CFO Jeff Schwaneke emphasized that cost discipline and targeted clinical initiatives partially offset these headwinds, with improvements in payer terms and technology investments supporting operational visibility.
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agilon health (AGL) Q1 CY2025 Highlights:
- Revenue: $1.53 billion vs analyst estimates of $1.51 billion (4.5% year-on-year decline, 1.8% beat)
- Adjusted EBITDA: $20.57 million vs analyst estimates of $17.42 million (1.3% margin, 18.1% beat)
- The company slightly lifted its revenue guidance for the full year to $5.94 billion at the midpoint from $5.93 billion
- EBITDA guidance for the full year is -$75 million at the midpoint, above analyst estimates of -$78.29 million
- Operating Margin: -1.4%, in line with the same quarter last year
- Customers: 491,000, down from 527,000 in the previous quarter
- Market Capitalization: $902.4 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions agilon health’s Q1 Earnings Call
- Stephen Baxter (Wells Fargo) asked whether the transition to the new CMS V-28 risk adjustment model created unexpected headwinds. CEO Steve Sell replied that the impact was consistent with expectations, citing strong continuity of care and preparation in 2024 as key factors.
- Elizabeth Anderson (Evercore ISI) questioned lingering impacts from previously exited markets. CFO Jeff Schwaneke clarified that negative development tied to these exits was minimal for 2025, with most legacy impacts now isolated to historical periods.
- Jailendra Singh (Truist Securities) requested details on how CMS’s improved 2026 rate notice would flow through to agilon’s contracts. Sell explained that 40% of membership would see direct benefit through percentage-of-premium increases, with further progress on risk reduction and quality incentives targeted in upcoming renewals.
- Lisa Gill (JPMorgan) inquired about cost trend visibility and the progression of inpatient and drug utilization. Sell noted that trends were in line with expectations, and highlighted new data systems providing improved real-time insight into claims and costs.
- Matthew Shea (Needham) asked about the progress and future impact of newer clinical programs like heart failure and dementia management. Sell responded that while these initiatives are in early stages, their benefits are expected to materialize more fully in 2026 and beyond, with early indications of improved disease detection and intervention.
Catalysts in Upcoming Quarters
Over the next few quarters, the StockStory team will closely monitor (1) the outcomes of payer contract renewals and their effect on Part D exposure and quality incentives, (2) the operational impact of expanded clinical programs—particularly in heart failure and palliative care, and (3) ongoing trends in medical utilization and margin performance. Progress in technology-driven care management and member growth discipline will also be important markers for future stability.
agilon health currently trades at $2.31, down from $4.49 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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