P3 Health Partners Inc.

What they do

P3 operates a delegated, capitated care model under which it contracts with health plans to manage the total cost of care for Medicare Advantage members attributed to its affiliated primary care physicians. The company primarily uses an affiliate model, contracting with existing local physicians rather than acquiring practices, and provides tools and technology to support value-based care. As of June 30, 2026, P3 had approximately 2,100 physicians across 26 markets in five states, serving roughly 104,400 at-risk members.

Revenue drivers

• Capitated revenue from health plans — P3 earns per-member-per-month fees, typically a percentage of the CMS premium, for managing all healthcare costs of attributed Medicare Advantage members. This is the primary revenue source.
• At-risk membership growth — Revenue is tied to the number of at-risk members. At-risk membership was about 105,000 in Q2 2026, down 10% year-over-year due to intentional network and payer rationalization.
• Per-member capitated revenue improvements — Total per-member capitated revenue increased 15% year-over-year in Q2 2026, driven by improved network economics, rate progression, and burden of illness performance.

Recent performance

For Q2 2026, P3 reported total revenue of $386 million, up 9% year-over-year, and net income of $15.7 million versus a net loss of $43.7 million in the prior-year quarter. Medical margin was $97.8 million, or $311 PMPM, including favorable payer settlements and prior-year development; excluding those items, medical margin was $52.9 million, or $168 PMPM. Adjusted EBITDA was $54.4 million, or $173 PMPM, compared to a loss of $17.1 million in Q2 2025. Annual revenue has grown from $578.6 million in 2021 to $1.46 billion in 2025, with net losses in every year, including $147.9 million in 2025. As of June 30, 2026, the company had $21.3 million in cash, $98.1 million in long-term debt, and $73.2 million in shareholder equity.

Strategy

Management is focused on improving profitability through structural contract changes, network rationalization, and operational efficiency, as outlined by CEO Dr. Aric Coffman. The company is intentionally reducing at-risk membership to improve network economics and per-member returns. P3 continues to expand into new markets and states while leveraging its affiliate physician model and delegated care capabilities. The company aims to drive total cost-of-care savings and improve health outcomes, which it believes will increase profitability over time.

Risks

• Going concern doubt — Management has concluded there is substantial doubt about the company's ability to continue as a going concern within one year after the issuance of the 2025 Form 10-K, given negative cash flows and the need for additional funding in 2026.
• Cash and liquidity constraints — With only $21.3 million in cash as of June 30, 2026 and recurring operating losses, the company is reliant on further financing, which may not be available on favorable terms.
• High leverage and claims obligations — As of December 31, 2025, the company had $336.7 million of outstanding indebtedness and $287.8 million of unpaid claims, which could strain liquidity and increase financial risk.
• Nasdaq listing compliance — The company received delisting notices in May 2026, indicating potential failure to meet listing requirements, which could impact stock trading and access to capital.

Outlook

Management raised full-year 2026 adjusted EBITDA guidance to a range of $80 million to $110 million, and expects total revenue of $1.5 billion to $1.6 billion. At-risk members are projected to be between 102,000 and 106,000 for the year. The company acknowledges it will require additional funding in 2026 absent other financing transactions.