Starling Oncology, Inc.

What they do

Starling operates 65 community oncology clinics staffed by 125 providers (physicians and advanced practice providers) and manages a network of 791 independent providers in Florida and 11 in California. The company earns revenue through fee-for-service billing (CPT codes, cost-plus drugs) and value-based contracts (capitation, gain/loss sharing, full delegation) with managed care and risk-bearing entities. It also operates specialty and retail pharmacies in all five states, filling medications incidental to oncology care. As of June 30, 2026, it managed approximately 2.1 million patients under value-based agreements.

Revenue drivers

• Fee-for-service oncology services — Bills for physician services, in-house infusion, radiation, and transfusions on a CPT-code basis; drugs billed cost-plus. Revenue is retrospective and depends on referrals and patient volume.
• Value-based contracts (capitation and delegation) — Receives fixed monthly per-member payments or gains/loss sharing for managing oncology populations; expected to generate about $150 million in capitated revenue in 2026. Recent exclusivity in California added ~230,000 capitated lives.
• Specialty pharmacy — Fills medication orders for oncology patients; Q2 2026 revenue up 58% year-over-year, driven by record Part D fills and Florida delegated arrangements.

Recent performance

Q2 2026 revenue was $161.3 million, up 34.6% from $119.8 million a year earlier. Gross profit rose 55.2% to $27.2 million. Net loss narrowed to $9.8 million from $17.0 million, and Adjusted EBITDA turned positive at $0.2 million versus -$4.1 million. Cash and equivalents were $41.1 million at June 30, 2026, with total assets of $178.2 million and shareholder equity of -$24.9 million.

Strategy

Management is focused on expanding value-based, delegated contracts beyond Florida, with new agreements in Nevada and Oregon. The company plans to launch a proprietary provider portal, Starling Nexus, in mid-August 2026 to strengthen provider engagement and clinical pathway adherence. It is also leveraging exclusivity agreements, such as the California deal adding ~230,000 capitated lives, to drive capitated revenue growth. The stated goal is sustained positive Adjusted EBITDA, supported by raising full-year guidance for revenue and gross profit.

Risks

• History of net losses — The company has reported net losses in most years (2021-2023, 2025, and Q2 2026), and may not achieve or maintain profitability.
• Negative shareholder equity — As of June 30, 2026, shareholder equity was -$24.9 million while total liabilities were $203.1 million, indicating a potential solvency risk.
• Dependence on value-based contracts — The business model relies on managing oncology populations under capitation/delegation; any failure to control costs (MLR above expectations) could reduce profits.
• Rapid growth and integration — Expanding into new states and managing a growing network (791 Florida providers) could strain management, operations, and internal controls.

Outlook

Management raised full-year 2026 guidance to revenue of $650-670 million (from $630-650 million), gross profit of $105-110 million (from $97-107 million), and Adjusted EBITDA of $2-7 million (from $0-9 million). Free cash flow guidance remains at $5-15 million. For Q3 2026, they expect Adjusted EBITDA of $0.5-1.5 million as Florida delegated lives ramp. The company also anticipates Medical Loss Ratio in the 80-90% range over the next twelve months.