0000950170-25-105242
SEC filingRevenue grew 35% driven by acquisitions and risk transition, but net income fell 51% due to higher costs and expenses.
Total revenue for Q2 2025 increased 35% to $654.8 million from $486.3 million in Q2 2024, primarily driven by capitation revenue growth of $171.5 million (+39%). This was largely attributable to recent acquisitions within the Care Partners segment and the transition of enrollees to full-risk models under the Restricted Knox-Keene plans. Cost of services (excluding D&A) rose 40% to $576.8 million, outpacing revenue growth, while general and administrative expenses increased 41% to $50.7 million due to stock-based compensation and transaction costs for the Prospect acquisition. As a result, operating income declined 32% to $20.3 million. Net income attributable to Astrana fell 51% to $9.4 million, further impacted by a $5.0 million decrease in other income (prior-year reimbursement not recurring). Adjusted EBITDA remained nearly flat at $48.1 million (7% margin) versus $47.9 million (10% margin) in the prior year, reflecting margin compression from higher expenses.
Care Partners, the largest segment, generated $631.4 million in revenue (+36% YoY) and $49.7 million in operating income (+23%), benefiting from M&A scale. Care Delivery revenue grew 10% to $38.4 million with operating income of $2.1 million (+18%), driven by increased patient visit volume. Care Enablement revenue rose 13% to $40.9 million, but operating income plummeted 73% to $1.8 million as costs from workforce expansion outpaced growth. The segment mix continues to shift toward Care Partners, which now accounts for ~96% of total revenue.
Management noted the recently completed Prospect Transaction (July 2025) will expand the provider network to over 20,000 providers and 1.6 million patients. The acquisition was funded with $707.3 million from a delayed-draw term loan. No explicit financial guidance was provided, but the company highlighted sufficient liquidity ($342.1 million in cash and marketable securities) and a focus on integrating acquisitions while navigating regulatory changes (OBBBA). The MD&A did not issue specific revenue or margin targets for upcoming quarters, signaling a period of operational consolidation and cost management.
As of June 30, 2025, the Company held $339.7M in cash and cash equivalents and $2.4M in marketable securities. Total assets were $1.44B, with goodwill of $416.9M and intangible assets net of $105.7M. Total liabilities stood at $904.4M, including $287.7M in medical liabilities (up from $209.0M at year-end 2024) and $418.8M in total debt. Stockholders' equity was $765.5M. The Company's VIE consolidation added $878.7M in assets and $230.3M in liabilities that are not recourse to the general credit of Astrana.
The Company has $418.8M in debt commitments, with $12.5M due within one year. Standby letters of credit total $27.1M ($25.0M under the credit facility, $2.1M from consolidated IPAs). Surety bonds required by CMS aggregate approximately $46.4M, expiring through 2030. Operating lease commitments total $43.8M, with $3.7M due in the remainder of 2025. The Company also has $27.5M in Level 3 contingent consideration liabilities, including $11.8M for CFC (up to $15.0M total) and $6.3M for CHS (up to $26.3M total).
During the six months ended June 30, 2025, the Company repurchased 300,000 shares from APC for $10.6M. Cash dividends paid totaled $6.2M, and APC distributed 699,896 shares of Company stock to its shareholders. Net debt decreased by $19.4M ($412.0M borrowed, $431.4M repaid). Capital expenditures were $4.5M. The Company also paid $4.5M in contingent consideration for ADSC. Unrecognized stock-based compensation expense was $52.8M.
The Company operates three reportable segments. For the three months ended June 30, 2025, Care Partners generated $631.4M in third-party revenue and $49.7M in operating income (7.9% margin). Care Delivery generated $20.0M in revenue and $2.1M in operating income (10.7% margin). Care Enablement generated $3.4M in revenue and $1.8M in operating income (54.9% margin). Intersegment eliminations totaled $55.9M in revenue and $55.9M in expenses. Corporate costs were $33.3M. All revenues are derived from the United States.
Operating cash flow of $107.5M substantially exceeded net income of $16.4M, reflecting strong cash generation from operations. Adjustments included $13.8M depreciation/amortization, $19.5M share-based compensation, and a $51.6M working capital inflow (vs. -$36.1M in prior year), indicating efficient management of receivables/payables. Capex of $4.5M was modest at 4.2% of CFO, suggesting low capital intensity. Dividends of $6.2M were well-covered by CFO. The company did not repurchase shares. The large working capital swing was the primary driver of the YoY improvement, consistent with business growth and timing of collections. No unusual one-time items were noted aside from the working capital reversal.