Home Medical Malpractice One Medical Announces Results for Second Quarter 2022

One Medical Announces Results for Second Quarter 2022

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1Life Healthcare, Inc.

  • Second Quarter 2022 Ending Total Membership Count of 790,000, a 27% Increase Year-Over-Year. Ending Consumer and Enterprise Membership Count of 750,000 and At-Risk Membership Count of 40,000

  • Second Quarter 2022 Net Revenue of $255.8 Million, a 112% Increase Year-Over-Year

SAN FRANCISCO, Aug. 03, 2022 (GLOBE NEWSWIRE) — 1Life Healthcare, Inc. (One Medical) (Nasdaq: ONEM) today announced financial results for the second quarter ended June 30, 2022.

“At One Medical during the second quarter we continued to advance our mission to transform healthcare through our human-centered and technology-powered model,” said Amir Dan Rubin, Chair & CEO of One Medical. “We believe that at One Medical we have an exciting opportunity to deliver better health outcomes, better care experiences, and lower costs, within a better team environment.”

Financial Highlights for the Second Quarter 2022

All comparisons are to the three months ended June 30, 2021. Unless otherwise noted, our results of operations in this press release include the activity of Iora Health, Inc. (“Iora”) beginning from the close of our acquisition on September 1, 2021.

  • Total membership count as of quarter-end was 790,000 compared to 621,000, a 27% increase; Consumer and Enterprise membership count of 750,000 and At-Risk membership count of 40,000 as of quarter-end.

  • Net Revenue was $255.8 million compared to $120.4 million, a 112% increase.

  • Medical Claims Expense Ratio was 85%.

  • Loss from Operations was $97.4 million, or 38% of Net Revenue; Net Loss was $93.8 million, or 37% of Net Revenue.

  • Care Margin was $40.0 million, or 16% of Net Revenue.

  • Adjusted EBITDA was a loss of $38.5 million, or 15% of Net Revenue.

  • Cash and marketable securities of $347.6 million as of June 30, 2022.

  • On July 21, 2022, we announced our entry into a definitive merger agreement with Amazon.com, Inc. (“Amazon”), in which Amazon agreed to acquire our Company for $18 per share in an all-cash transaction valued at approximately $3.9 billion, including the Company’s net debt. Pursuant to the merger agreement (and subject to the terms and conditions therein), our Company would merge with and into a wholly-owned subsidiary of Amazon. The consummation of the merger is subject to a number of closing conditions, including, among others, the approval from our shareholders, and regulatory approval, as well as other customary closing conditions.

  • Pursuant to the merger agreement, Amazon has agreed to provide us with access to senior unsecured interim debt financing in an aggregate principal amount of up to $300.0 million to be funded in up to ten tranches of $30.0 million per month, beginning on March 20, 2023 until the earlier of the consummation of the acquisition by Amazon, and the termination of the merger agreement pursuant to its terms, with a maturity date of 24 months after the termination of the merger agreement.

Due to the company’s pending transaction with Amazon, One Medical will not be providing guidance for the third quarter 2022 and is suspending its financial guidance for the full fiscal year 2022.

In addition, as is customary during the pendency of an acquisition, One Medical will not be hosting a conference call in conjunction with its second quarter 2022 earnings release. For further details and discussion of our financial performance please refer to our quarterly report on Form 10-Q for the quarter ended June 30, 2022.

Key Metrics and Non-GAAP Financial Measures

Members: Members include both Consumer and Enterprise members as well as At-Risk members as defined below. Our number of members depends, in part, on our ability to successfully market our services directly to consumers including Medicare-eligible as well as non-Medicare eligible individuals, to Medicare Advantage health plans and Medicare Advantage enrollees, to employers that are not yet enterprise clients, as well as our activation rate within existing enterprise clients. We define estimated activation rate for any enterprise client at a given time as the percentage of eligible lives enrolled as members. While growth in the number of members is an important indicator of expected revenue growth, it also informs our management of the areas of our business that will require further investment to support expected future member growth. Member numbers as of the end of each period are rounded to the thousands.

Consumer and Enterprise Members: A Consumer and Enterprise member is a person who has registered with us and has paid for membership for a period of at least one year or whose membership has been sponsored by an enterprise or other third party under an agreement having a term of at least one year. Consumer and Enterprise members do not include trial memberships, our virtual only One Medical Now users, or any temporary users. Our number of Consumer and Enterprise members depends, in part, on our ability to successfully market our services directly to consumers and to employers that are not yet enterprise clients and our activation rate within existing clients. Consumer and Enterprise members may include individuals who are: (i) Medicare-eligible and (ii) have paid for a membership or whose membership has been sponsored by an enterprise or other third party. Consumer and Enterprise members do not include any At-Risk members as defined below. Consumer and Enterprise members help drive commercial revenue.

At-Risk Members: An At-Risk member is a person for whom we are responsible for managing a range of healthcare services and associated costs. At-Risk members help drive Medicare revenue.

Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

Medical Claims Expense Ratio: We define Medical Claims Expense Ratio as medical claims expense divided by Capitated Revenue. The nature of our contracting with Medicare Advantage payers and CMS requires us to be financially responsible for a range of healthcare services of our At-Risk members. Our care model focuses on leveraging the primary care setting as a means of reducing unnecessary or avoidable health care costs and balancing our cost of care with the impact of our service levels on medical claims expense. We are liable for potentially large medical claims should we not effectively manage our At-Risk members’ health. We therefore consider the Medical Claims Expense Ratio to be an important measure to monitor our performance. As we sign up new At-Risk members or open new offices to serve these members, our Medical Claims Expense Ratio is likely to increase initially due to a potential increase in medical claims expense from a lag in improvement in health outcomes with member tenure. Similarly, there may be a lag in adequately documenting the health status of our members, resulting in different Capitated Revenue compared to what is indicated by the health status of an At-Risk member. We believe that the Medical Claims Expense Ratio for a given set of At-Risk members can improve over time as we help improve their health outcomes relative to their underlying health conditions, though the ratio may fluctuate for any given customers or cohort of customers depending on future outbreaks or variants of COVID-19 and associated increases in medical claims expense.

Care Margin: We define Care Margin as income or loss from operations excluding depreciation and amortization, general and administrative expense and sales and marketing expense. We consider Care Margin to be an important measure to monitor our performance, specific to the direct costs of delivering care. We believe this margin is useful to both us and investors to measure whether we are effectively pricing our services and managing the health care and associated costs, including medical claims expense and cost of care, of our At-Risk members successfully. We have provided below a reconciliation of historical Care Margin to loss from operations, its most directly comparable GAAP financial measure.

Adjusted EBITDA: We define Adjusted EBITDA as net income or loss excluding interest income, interest and other expense, depreciation and amortization, stock-based compensation, provision for (benefit from) income taxes, certain legal or advisory costs, and acquisition and integration costs that we do not consider to be expenses incurred in the normal operation of the business. Such legal or advisory costs may include but are not limited to expenses with respect to evaluating potential business combinations, legal investigations, or settlements. Acquisition and integration costs include expenses incurred in connection with the closing and integration of acquisitions, which may vary significantly and are unique to each acquisition. We started to exclude prospectively from our presentation certain legal or advisory costs from the first quarter of 2021 and acquisition and integration costs from the second quarter of 2021, because amounts incurred in the prior periods were insignificant relative to our consolidated operations. We include Adjusted EBITDA because it is an important measure upon which our management assesses and believes investors should assess our operating performance. We consider Adjusted EBITDA to be an important measure to both management and investors because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis. We have provided below a reconciliation of historical Adjusted EBITDA to net loss, its most directly comparable GAAP financial measure.

Available Information

One Medical intends to use its Company website (including its Investor Relations website) as well as its Facebook, Twitter and LinkedIn accounts as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Forward-Looking Statements

This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties and are based on our beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts contained in this press release, including statements regarding our proposed transactions with Amazon, future results of operations, financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” or “would,” or the negative of these words or other similar terms or expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our current beliefs, estimates and assumptions only as of the date of this press release and information contained in this press release should not be relied upon as representing our estimates as of any subsequent date. These statements, and related risks, uncertainties, factors and assumptions, include, but are not limited to: our ability to consummate the proposed transactions with Amazon in a timely manner or at all and potential delays in consummating such proposed transactions; the satisfaction (or waiver) of closing conditions to the consummation of the proposed transactions with Amazon, including with respect to the approval of our stockholders; timely and successful integration of Iora with our company and our ability to timely and successfully achieve the anticipated benefits and potential synergies of such transaction; the strength of the One Medical brand; member satisfaction with our services and support; the effects of the COVID-19 pandemic, including any new outbreaks and emerging variant strains of the virus, and related self-isolation and quarantine measures on our business, revenue, future growth and results of operations; anticipated membership growth and revenue potential from our members; our ability to retain members; our ability to successfully introduce and drive adoption of new products; changes in the pricing we offer our members; our relationships with our health network partners and enterprise clients and any changes to, accommodations in or terminations of our contracts with the health network partners or enterprise clients; our ability to improve cost of care and margins, including timing and expenses of new office openings and entry into new geographies; our ability to improve our medical claims expense ratio; changes in laws or regulations; our involvement in existing and potential litigation, including medical malpractice claims and consumer class actions; any governmental investigations or inquiries, including those related to COVID-19 vaccine administration or challenges to our relationships with the One Medical PCs under the administrative services agreements; our strategic plan; the impact of new laws and regulations on our industry, including Medicare, general economic and market conditions; our financial outlook; our focus areas for investment and our investments; announcements by us, our health network partners or our competitors of business or strategic developments; and our overall business trajectory. These risks are not exhaustive. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Further information on factors that could cause actual results to differ materially from the results anticipated by our forward-looking statements is included in the reports we have filed or will file with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022. These filings, when available, are available on the investor relations section of our website at investor.onemedical.com and on the SEC’s website at www.sec.gov.

About One Medical

One Medical is a U.S. national human-centered and technology-powered primary care organization with seamless digital health and inviting in-office care, convenient to where people work, shop, live, and click. One Medical’s vision is to delight millions of members with better health and better care while reducing costs, within a better team environment. One Medical’s mission is to transform health care for all through a human-centered, technology-powered model. Headquartered in San Francisco, 1Life Healthcare, Inc. is the administrative and managerial services company for the affiliated One Medical physician-owned professional corporations that deliver medical services in-office and virtually. 1Life and the One Medical entities do business under the “One Medical” brand.

Additional Information and Where to Find It

In connection with the proposed acquisition of One Medical by Amazon, One Medical intends to file with the SEC preliminary and definitive proxy statements relating to such acquisition and other relevant documents. The definitive proxy statement will be mailed to One Medical’s stockholders as of a record date to be established for voting on the proposed acquisition and any other matters to be voted on at the special meeting. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENTS, ANY AMENDMENTS OR SUPPLEMENTS THERETO, ANY OTHER SOLICITING MATERIALS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED ACQUISITION OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENTS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT ONE MEDICAL AND THE PROPOSED ACQUISITION. Investors and security holders may obtain free copies of these documents (when they are available) on the SEC’s web site at www.sec.gov, on One Medical’s website at https://investor.onemedical.com/ or by contacting One Medical’s Investor Relations via email at https://investor.onemedical.com/contact-ir.

Participants in the Solicitation

One Medical and its directors and executive officers may be deemed participants in the solicitation of proxies from the stockholders of One Medical in connection with the proposed acquisition and any other matters to be voted on at the special meeting. Information regarding the names, affiliations and interests of such directors and executive officers will be included in the preliminary and definitive proxy statements (when available). Additional information regarding such directors and executive officers is included in One Medical’s definitive proxy statement on Schedule 14A for the 2022 Annual Meeting of Stockholders, which was filed with the SEC on April 21, 2022.

Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies of One Medical’s stockholders in connection with the proposed acquisition and any other matters to be voted upon at the special meeting will be set forth in the preliminary and definitive proxy statements (when available) for the proposed acquisition. These documents are available free of charge as described in the preceding paragraph.

Media Contact:
Breanna Shirk, One Medical
External Communications
press@onemedical.com

Investor Contact:
Ken Goff, One Medical
Investor Relations
investor@onemedical.com

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
(unaudited)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net revenue:

 

 

 

 

 

 

 

Medicare revenue

$

131,594

 

 

$

 

 

$

259,016

 

 

$

 

Commercial revenue

 

124,245

 

 

 

120,416

 

 

 

250,925

 

 

 

241,768

 

Total net revenue

 

255,839

 

 

 

120,416

 

 

 

509,941

 

 

 

241,768

 

Operating expenses:

 

 

 

 

 

 

 

Medical claims expense

 

108,900

 

 

 

 

 

 

213,866

 

 

 

 

Cost of care, exclusive of depreciation and amortization shown separately below

 

106,948

 

 

 

67,922

 

 

 

208,325

 

 

 

138,014

 

Sales and marketing (1)

 

23,193

 

 

 

10,570

 

 

 

45,652

 

 

 

23,259

 

General and administrative (1)

 

92,422

 

 

 

77,196

 

 

 

189,458

 

 

 

141,541

 

Depreciation and amortization

 

21,783

 

 

 

7,292

 

 

 

42,676

 

 

 

13,899

 

Total operating expenses

 

353,246

 

 

 

162,980

 

 

 

699,977

 

 

 

316,713

 

Loss from operations

 

(97,407

)

 

 

(42,564

)

 

 

(190,036

)

 

 

(74,945

)

Other income (expense), net:

 

 

 

 

 

 

 

Interest income

 

364

 

 

 

79

 

 

 

521

 

 

 

184

 

Interest and other expense

 

(3,682

)

 

 

(2,842

)

 

 

(8,801

)

 

 

(5,685

)

Total other income (expense), net

 

(3,318

)

 

 

(2,763

)

 

 

(8,280

)

 

 

(5,501

)

Loss before income taxes

 

(100,725

)

 

 

(45,327

)

 

 

(198,316

)

 

 

(80,446

)

Provision for (benefit from) income taxes

 

(6,916

)

 

 

(4,040

)

 

 

(13,648

)

 

 

159

 

Net loss

$

(93,809

)

 

$

(41,287

)

 

$

(184,668

)

 

$

(80,605

)

Net loss per share — basic and diluted

$

(0.48

)

 

$

(0.30

)

 

$

(0.95

)

 

$

(0.59

)

Weighted average common shares outstanding — basic and diluted

 

194,488

 

 

 

136,788

 

 

 

193,774

 

 

 

137,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation, as follows:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

Sales and marketing

$

1,325

 

 

$

964

 

 

$

2,268

 

 

$

1,987

 

General and administrative

 

31,011

 

 

 

25,368

 

 

 

66,987

 

 

 

50,673

 

Total

$

32,336

 

 

$

26,332

 

 

$

69,255

 

 

$

52,660

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Components of Net Revenue:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Net revenue:

 

 

 

 

 

 

 

Capitated revenue

$

128,521

 

 

$

 

 

$

253,151

 

 

$

 

Fee-for-service and other revenue

 

3,073

 

 

 

 

 

 

5,865

 

 

 

 

Total Medicare revenue

 

131,594

 

 

 

 

 

 

259,016

 

 

 

 

Partnership revenue

 

63,401

 

 

 

56,126

 

 

 

124,336

 

 

 

111,057

 

Net fee-for-service revenue

 

35,740

 

 

 

43,416

 

 

 

77,254

 

 

 

87,878

 

Membership revenue

 

25,104

 

 

 

20,874

 

 

 

49,335

 

 

 

41,070

 

Grant income

 

 

 

 

 

 

 

 

 

 

1,763

 

Total commercial revenue

 

124,245

 

 

 

120,416

 

 

 

250,925

 

 

 

241,768

 

Total net revenue

$

255,839

 

 

$

120,416

 

 

$

509,941

 

 

$

241,768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statements of Operations Data as a Percentage of Net Revenue:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Net revenue:

 

 

 

 

 

 

 

Medicare revenue

51

%

 

%

 

51

%

 

%

Commercial revenue

49

%

 

100

%

 

49

%

 

100

%

Total net revenue

100

%

 

100

%

 

100

%

 

100

%

Operating expenses:

 

 

 

 

 

 

 

Medical claims expense

43

%

 

%

 

42

%

 

%

Cost of care, exclusive of depreciation and amortization shown separately below

42

%

 

56

%

 

41

%

 

57

%

Sales and marketing (1)

9

%

 

9

%

 

9

%

 

10

%

General and administrative (1)

36

%

 

64

%

 

37

%

 

59

%

Depreciation and amortization

9

%

 

6

%

 

8

%

 

6

%

Total operating expenses

138

%

 

135

%

 

137

%

 

131

%

Loss from operations

(38

)%

 

(35

)%

 

(37

)%

 

(31

)%

Other income (expense), net:

 

 

 

 

 

 

 

 

 

 

 

Interest and other expense

(1

)%

 

(2

)%

 

(2

)%

 

(2

)%

Total other income (expense), net

(1

)%

 

(2

)%

 

(2

)%

 

(2

)%

Loss before income taxes

(39

)%

 

(38

)%

 

(39

)%

 

(33

)%

Provision for (benefit from) income taxes

(3

)%

 

(3

)%

 

(3

)%

 

%

Net loss

(37

)%

 

(34

)%

 

(36

)%

 

(33

)%

 

 

 

 

 

 

 

 

(1) Includes stock-based compensation, as follows:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Sales and marketing

1

%

 

1

%

 

%

 

1

%

General and administrative

12

%

 

21

%

 

13

%

 

21

%

Total

13

%

 

22

%

 

14

%

 

22

%

 

 

 

 

 

 

 

 

 

 

 

 

Components of Net Revenue:

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2022

 

2021

 

2022

 

2021

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

(unaudited)

Net revenue:

 

 

 

 

 

 

 

Capitated revenue

50

%

 

%

 

50

%

 

%

Fee-for-service and other revenue

1

%

 

%

 

1

%

 

%

Total Medicare revenue

51

%

 

%

 

51

%

 

%

Partnership revenue

25

%

 

47

%

 

24

%

 

46

%

Net fee-for-service revenue

14

%

 

36

%

 

15

%

 

36

%

Membership revenue

10

%

 

17

%

 

10

%

 

17

%

Grant income

%

 

%

 

%

 

1

%

Total commercial revenue

49

%

 

100

%

 

49

%

 

100

%

Total net revenue

100

%

 

100

%

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

 

 

*Percentages may not sum due to rounding.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except par value amounts)
(unaudited)

 

June 30,

 

December 31,

 

 

2022

 

 

 

2021

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

184,748

 

 

$

341,971

 

Short-term marketable securities

 

162,874

 

 

 

111,671

 

Accounts receivable, net

 

153,155

 

 

 

103,498

 

Inventories

 

6,571

 

 

 

6,065

 

Prepaid expenses

 

28,555

 

 

 

28,055

 

Other current assets

 

24,429

 

 

 

21,767

 

Total current assets

 

560,332

 

 

 

613,027

 

Long-term marketable securities

 

 

 

 

48,296

 

Restricted cash

 

3,785

 

 

 

3,801

 

Property and equipment, net

 

204,814

 

 

 

193,716

 

Right-of-use assets

 

272,966

 

 

 

256,293

 

Intangible assets, net

 

334,325

 

 

 

352,158

 

Goodwill

 

1,157,179

 

 

 

1,147,464

 

Other assets

 

7,518

 

 

 

12,277

 

Total assets

$

2,540,919

 

 

$

2,627,032

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

17,046

 

 

$

18,725

 

Accrued expenses

 

76,289

 

 

 

72,672

 

Deferred revenue, current

 

57,651

 

 

 

47,928

 

Operating lease liabilities, current

 

36,465

 

 

 

31,152

 

Other current liabilities

 

29,030

 

 

 

31,632

 

Total current liabilities

 

216,481

 

 

 

202,109

 

Operating lease liabilities, non-current

 

291,596

 

 

 

269,641

 

Convertible senior notes

 

310,782

 

 

 

309,844

 

Deferred income taxes

 

60,199

 

 

 

73,875

 

Deferred revenue, non-current

 

25,768

 

 

 

29,317

 

Other non-current liabilities

 

11,611

 

 

 

13,663

 

Total liabilities

 

916,437

 

 

 

898,449

 

Commitments and contingencies

 

 

 

Stockholders’ Equity:

 

 

 

Common stock, $0.001 par value, 1,000,000 and 1,000,000 shares authorized as of June 30, 2022 and December 31, 2021, respectively; 195,154 and 191,722 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

 

195

 

 

 

193

 

Additional paid-in capital

 

2,428,684

 

 

 

2,346,781

 

Accumulated deficit

 

(802,866

)

 

 

(618,198

)

Accumulated other comprehensive income

 

(1,531

)

 

 

(193

)

Total stockholders’ equity

 

1,624,482

 

 

 

1,728,583

 

Total liabilities and stockholders’ equity

$

2,540,919

 

 

$

2,627,032

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
(unaudited)

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

Net loss

$

(184,668

)

 

$

(80,605

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Provision for bad debts

 

270

 

 

 

105

 

Depreciation and amortization

 

42,676

 

 

 

13,899

 

Amortization of debt discount and issuance costs

 

938

 

 

 

937

 

Accretion of discounts and amortization of premiums on marketable securities, net

 

661

 

 

 

483

 

Reduction of operating lease right-of-use assets

 

16,053

 

 

 

8,609

 

Stock-based compensation

 

69,255

 

 

 

52,660

 

Deferred income taxes

 

(13,676

)

 

 

 

Other non-cash items

 

570

 

 

 

400

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable, net

 

(49,571

)

 

 

11,380

 

Inventories

 

(481

)

 

 

3,216

 

Prepaid expenses and other current assets

 

4,105

 

 

 

(21,261

)

Other assets

 

3,792

 

 

 

110

 

Accounts payable

 

121

 

 

 

1,234

 

Accrued expenses

 

4,546

 

 

 

6,772

 

Deferred revenue

 

5,793

 

 

 

6,765

 

Operating lease liabilities

 

(13,143

)

 

 

(8,761

)

Other liabilities

 

(2,119

)

 

 

17,128

 

Net cash (used in) provided by operating activities

 

(114,878

)

 

 

13,071

 

Cash flows from investing activities:

 

 

 

Purchases of property and equipment, net

 

(34,188

)

 

 

(31,172

)

Purchases of marketable securities

 

(54,906

)

 

 

(79,984

)

Proceeds from sales and maturities of marketable securities

 

50,000

 

 

 

498,977

 

Acquisitions of businesses, net of cash and restricted cash acquired

 

(10,451

)

 

 

(9,695

)

Issuance of note receivable

 

 

 

 

(20,000

)

Net cash (used in) provided by investing activities

 

(49,545

)

 

 

358,126

 

Cash flows from financing activities:

 

 

 

Proceeds from the exercise of stock options

 

5,450

 

 

 

16,107

 

Proceeds from employee stock purchase plan

 

1,659

 

 

 

2,972

 

Payment of principal portion of finance lease liability

 

(27

)

 

 

(29

)

Net cash provided by financing activities

 

7,082

 

 

 

19,050

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

(157,341

)

 

 

390,247

 

Cash, cash equivalents and restricted cash at beginning of period

 

346,054

 

 

 

115,005

 

Cash, cash equivalents and restricted cash at end of period

$

188,713

 

 

$

505,252

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

Purchases of property and equipment included in accounts payable and accrued expenses

$

7,732

 

 

$

5,883

 

Equity consideration for business acquisition

$

5,541

 

 

$

 

 

 

 

 

 

 

 

 

Select Metrics (As of Period End)

 

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

 

December 31,
2020

 

September 30,
2020

Consumer and Enterprise members

 

750,000

 

728,000

 

703,000

 

683,000

 

621,000

 

598,000

 

549,000

 

511,000

At-Risk members

 

40,000

 

39,000

 

33,000

 

32,000

 

 

 

 

Offices

 

204

 

188

 

182

 

177

 

124

 

110

 

107

 

103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MEDICAL CLAIMS EXPENSE RATIO

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(in thousands)

Medical claims expense

$

108,900

 

 

$

 

 

$

213,866

 

 

$

 

Capitated Revenue

$

128,521

 

 

$

 

 

$

253,151

 

 

$

 

Medical Claims Expense Ratio

 

85

%

 

 

N/A

 

 

 

84

%

 

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF LOSS FROM OPERATIONS TO CARE MARGIN

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(in thousands)

Loss from operations

$

(97,407

)

 

$

(42,564

)

 

$

(190,036

)

 

$

(74,945

)

Sales and marketing*

 

23,193

 

 

 

10,570

 

 

 

45,652

 

 

 

23,259

 

General and administrative*

 

92,422

 

 

 

77,196

 

 

 

189,458

 

 

 

141,541

 

Depreciation and amortization

 

21,783

 

 

 

7,292

 

 

 

42,676

 

 

 

13,899

 

Care Margin

$

39,991

 

 

$

52,494

 

 

$

87,750

 

 

$

103,754

 

Care Margin as a percentage of net revenue

 

16

%

 

 

44

%

 

 

17

%

 

 

43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

_______________
* Includes stock-based compensation

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(in thousands)

Net loss

$

(93,809

)

 

$

(41,287

)

 

$

(184,668

)

 

$

(80,605

)

Interest income

 

(364

)

 

 

(79

)

 

 

(521

)

 

 

(184

)

Interest and other expense

 

3,682

 

 

 

2,842

 

 

 

8,801

 

 

 

5,685

 

Depreciation and amortization

 

21,783

 

 

 

7,292

 

 

 

42,676

 

 

 

13,899

 

Stock-based compensation

 

32,336

 

 

 

26,332

 

 

 

69,255

 

 

 

52,660

 

Provision for (benefit from) income taxes

 

(6,916

)

 

 

(4,040

)

 

 

(13,648

)

 

 

159

 

Legal or advisory costs

 

 

 

 

11,282

 

 

 

547

 

 

 

15,567

 

Acquisition and integration costs

 

4,753

 

 

 

4,597

 

 

 

10,079

 

 

 

4,597

 

Adjusted EBITDA

$

(38,535

)

 

$

6,939

 

 

$

(67,479

)

 

$

11,778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



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