P3 raises lower end of 2026 adjusted EBITDA outlook to $90 million
Key Facts
P3 Health Partners raised the lower end of its 2026 adjusted earnings before interest, taxes, depreciation and amortization outlook to $90 million, lifting the midpoint of its range to $100 million. The company announced the revision on November 9, alongside results for the third quarter ended September 30, 2026. It said in its statement that the higher floor reflected year-to-date performance, as well as prior-year claims development and payer settlements recognized during the quarter. The revision sets a higher estimate for the full-year result with those items included in the company's calculations. The stock closed at $4.25 in the session when the announcement was made, then rose to $4.52 in after-hours trading.
The company posted third-quarter revenue of $396 million, up 15% from the same period a year earlier. Capitation revenue per at-risk member rose 18% year over year, according to the statement. Net income was $30.8 million, compared with a net loss of $69.5 million in the third quarter of the prior year. That comparison shows the results moving from a loss to profitability over the year-earlier period. However, the medical care margin included items related to payer settlements and prior claims development, distinguishing the reported figure from the margin excluding those items.
Medical care margin was $43.9 million for the quarter, and the company said excluding the effects of payer settlements and claims development would reduce it to $35 million. On the results call, the chief financial officer said about $7 million of positive margin was tied to a CMS settlement for the 2025 ACO initiative. He added that about $5 million was noncash income resulting from the release of a liability in the joint venture. The settlement and noncash income were among the items accompanying the quarter's results, alongside prior-year claims development. The company said some of these items recognized in the quarter contributed to the basis for raising the lower end of its full-year guidance.
Revenue and profitability improved as at-risk membership fell to about 105,000, down 9% from a year earlier. The company attributed the decline to deliberate network and payer rationalization. Total lives under management were about 133,500, a broader measure than the at-risk membership base. On the results call, the chief financial officer said the adjusted EBITDA outlook takes into account the higher pace of medical costs seen in the third quarter. He also tied the outlook to continued execution of clinical utilization management, payment integrity and cost-reduction initiatives.
Management identified more than $200 million in potential value-creation opportunities across payer economics, clinical execution and operational efficiency. Executives described the opportunities as multiyear and said their realization depends on execution. This value does not represent confirmed 2026 earnings; management said it would provide more detail on the timing and earnings contribution of the opportunities in early 2027. Investors are therefore awaiting clarification on how the initiatives will flow through to earnings in the company's future guidance. The company warned in its statement that actual results could differ materially from current estimates, and management said it does not undertake to update those estimates.