Agilon Health said its turnaround is gaining momentum after 18 months of moving from rapid growth toward profitability, with Chief Financial Officer Jeff Schwaneke outlining improved cost trends, higher cash and raised 2026 EBITDA guidance at Jefferies' Healthcare Services and Technology Conference on Monday, September 14, 2026. The company had doubled in size in 2024 before pausing growth and executing a transformational strategy over the past 18 months.
Agilon raised full-year 2026 EBITDA guidance to $75 million to $95 million. The company ended the second quarter with $257 million in cash excluding ACO entities and another $83 million in ACO entities, and expects to finish 2026 with at least $125 million in cash. Management cited about $22 million of favorable prior-period development and approximately $35 million of operating cost reductions implemented at the end of 2025.
Cost trends improved after a restatement. First-quarter 2026 cost trend was reset to the low 6% range from an earlier 7.4% reading, while second-quarter 2026 cost trend came in the low 7% range, affected by incomplete claims data at quarter-end when about 20% of claims had been paid. The company guided for a 7% cost trend in the third quarter and a low 7% trend in the fourth quarter, after 2025 ended at 5.8%. Agilon noted that a 1-point difference in cost trend can move medical margin by about $50 million and EBITDA by about $25 million.
Contracting actions also contributed to the outlook. The company said it touched 80% of contracts a year ago, generating more than $120 million of value for 2026. Fifty percent of the contract book is open for 2027, with 20% of that open book representing new contracting opportunities and 20% untouched a year ago. Agilon did not renew 50,000 members at the start of 2026 because of economic terms, while 35,000 members are in care coordination fee arrangements. Its REACH program covers more than 110,000 lives, and the network includes more than 2,300 physicians serving approximately 445,000 Medicare Advantage members plus about 110,000 members in an ACO fee-for-service partnership.
Risk-adjustment and clinical initiatives showed progress. The burden-of-illness program started with an initial guide of 40 basis points, moved to 1.5% net in the first quarter and reached 3% net by mid-year, with a 2027 net range expected at 0% to 3%. Full Part D risk was carried by 30% of members in 2025 and has fallen to less than 15% in 2026, with further reductions and agreements in place for 2027. The heart failure program is active across 90% of the network, and first-time inpatient heart failure diagnoses fell from roughly 25% to 5%. Dementia programs are rolling out and are expected to add meaningfully in 2026 and 2027, while COPD and lung health programs are in development.
A payer data pipeline turned on in the first quarter of 2025 now covers about 85% of payer partners, with plans to move above 90% over time and a 30- to 60-day data lag. Schwaneke said the system has been important for estimating risk adjustment and medical claims, and that the company took a conservative position during its first full reconciliation with mid-year MAO and MMR government data. Agilon shares had returned 421% year to date and traded at $92.38, according to the transcript page, while a separate quote showed a close of $89.77, down $2.83 or 3.06%.
