Cano Health (CANO)

Marlow Hernandez Chairman and Chief Executive Officer
Brian Koppy Chief Financial Officer
Adam Braun Bank of America
Jason Cassorla Citi
Brian Tanquilut Jeffries
Justin Lake Wolfe Research
Josh Raskin Nephron Research
Adam Ron Bank of America
Call transcript
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Good morning and welcome to Cano’s Health First Quarter 2022 Earnings Call. Currently, all participants are in a listen-only mode. After the speaker’s presentation there will be question-and-answer session. Please be advised that today’s conference is being recorded. Hosting today's call are Dr. Chief and and Financial Koppy, Chairman Officer. Hernandez, Executive Brian Officer; Chief Marlow press and Cano webcast are Cano release, The Health link the Relations available Investor other section website. of Health's on materials related views uncertainties made are are X, reflect time, of These expectations various statements this risks, as at to assumptions. XXXX, May and management's and subject and

to Securities the Section a currently the the Securities forward-looking be statements these known performance, including actual future financial to the on reminder, results events future and intend as Safe Exchange that the this As by our XXE contained reflect We guidance based covered call you judgment XXXX us for differ best Harbor and caution and regarding Act or materially. statements forward-looking forward-looking year. of events Section contains are statements XXA forward-looking Act. statements for fiscal our could that of provisions of in today We factors

to will financial Chairman that, of Please the not Investor non-GAAP also in with reconciliation prepared our A During are Marlow the is provided GAAP. results discuss in With today non-GAAP call, measures. of financial on call GAAP I'll we ahead. Dr. go discuss non-GAAP and we accordance Co-Founder, over today's turn the Relations Hernandez, CEO website. of the Health. press and will release measures The section and Cano

Marlow Hernandez

appreciate to members. and future With today. to yet and EBTIDA you improve work team the Good adjusted providing morning. thank growth, position our their for Health quality us than another Thank Cano this the the revenue welcome to strong mission. membership, team and XXX,XXX for you entire more growth delivered now Cano for outcomes joining and dedication while We healthcare all like company call. the to the I to and continued quarter take strong opportunity hard Health

XXX% investments This growth while we growth important fundamental our power adjusted revenue the business. even manage of of once build model. growth. the line validation drove to execute fast on continuing earnings of This our business year-over-year, We achieved of continued top XXX% the making again is strategy. year-over-year EBITDA our momentum by demonstrates by Further, our of by required quarter growth pace

have cycle. and new We generate build begun which to the to provide growth in leverage believe scale our many us just will additional markets, further density a earnings opportunities virtuous and in investments for we with

with value populations, Direct ended national Medicare key Our We care add included has XXX,XXX and members Medicare Total over Capitated members, demographic Medicare patients. to the proven more quarter a to DCE or XX,XXX entire members. Medicare served over than as platform we Entity Advantage XXX,XXX Contracting which

New growth the care value to Medicare formerly above January in who We’re reconciliations. one or level primary significant for were fee our in of efficiently. us density gain patients served York, insights in don't presently and New quickly Plus medical serve have to our members and by XXXX like DCE and more build which based our XXXX, approximately broadens provide scale our we patients, reflecting potential XXXX allowing places DCE The affiliate majority DCE and XX,XXX excited members, where market Jersey centers about roster Arizona membership are owned service. to physicians, were by members

to overall better time XXXX care as leads expect more fewer We and and hospitalizations, health be outcomes. intensive accretive primary margins improve EBITDA expect to to in DCE to marginally over

which of due fee to generate of primary Puerto to in half Even care Medicare affiliates, grew to new Advantage convergence DCE year. the second of members Advantage growth represented patients sequentially XX% to Our retaining estimates for natural during this with those than we lower of and in Rico our XX% based markets, most QX. Medicare due membership Medicare XX% management membership quarter, timing to on-going expect committed affiliates attrition pick that total Medicare one to Medicare Advantage first in remain the to and membership about in to in are service our year, XXXX, up total compared DCE through of the Advantage membership. due Combined of the membership membership expect total Medicare and our Medicare in we our value

grow new medical are the own tuck-in medical in end of Medical with tuck-in XXX lower to costs million owned medical the XXX of we we service Generally through with basis about X.X roughly quarter year on blended half than existing even patients the building EBITDA Turning to ramp million our center ground up centers nearby and is than QX to with second facilities because The a done we're and to centers centers. typically our and add independent spend average expect faster Medicare medical center. to with the as and medical X.X centers a at in break have offer in the significantly fee the and one to will build as patients programs turn coincide with year Medicare new for continuing of up based enrollment be in centers, historically, profitable adding small from period. we majority we value services an Centers of builds. year two as the affiliates by we added past, Also, tuck-ins integration organically the annual practices the ended

Let me recent tuck-ins. tell our about you of two

and a many growing commercial run tuck-ins quarter’s independent medical serving these community an a center Medicare serves who and is center patients. The well-respected by is Vegas primarily been rapidly of market. physician has fee-for-service in for Las years One her

number members at value services this the center. the expect to center, we based increase we of capitated add to Medicare As

number Center South affiliate Medical an XXX year. under help This end an services now tuck-in the that Medicare members for contracted patients of will expand of add Another kind least by about the we bring former Medicare at already expect affiliate with in is we to based novel the and serve. center, of move as additional members. Florida the value had fee-for-service of us we members medical to increase construction this XXX Again

prevention our XX statin use of number Heart, LDL Healthy program patients results. our diabetes at improved cardiovascular Let highlight by with and goal of clinical the less of increasing XXX%. significantly me than patients some disease, among participating an has cardiovascular atherosclerotic now

quarter In treat we're clinical just chronic and designed We're future, national turn SGLTX redefining day kind for vision density to investor improve effective look CanoPanorama, addition, scale the and role drugs our produces to which building, with more which transforming growth. measurable communities. ER which significantly performance wellness primary access beginning. improving operations progression critical care visits, healthcare inhibitors. at disease Yet, particularly into of These our Their CKD. our of of underway hospital medical on strategy making kidney such care, protocols and just profitable Health only of integrated and growth buying to and team the in forward reducing I few is in approved admissions, our of in proud U.S. quality maybe and X. clinical our as the to underserved achieve centers Cano managing of mortality the upcoming in than June to reinforces plays CKD is or system are activities share you platform, reducing confidence are helps our and now progress Overall, our a this success the demonstrated support rates.

Brian our call walk financial will I'll outlook. our over Now through to performance the who on turn CFO, Koppy, and you

Brian Koppy

of was was PMPM. our were fourth an XX% This increase million, ago were members, $XXX And quarter, mix a total you, first quarter. quarter of quarter XX% up million Medicare capitated increase XX% was by member million Medicaid us increase up members per from in months Total DCE, in month XXXX. for approximately or million members the Total quarter, $XXX for of Thank increase were revenue a members the the This per the in In in the $XXX quarter. a from to a $XXX first sequential represents approximately revenue joining $XXX and Medicare were toward increased the XX% million approximately Advantage, Marlow. in shift fourth XX% quarter. and first capitated revenue thanks XX% member XXX% in driven total ACA. Medicare and membership approximately everyone from XX% XXX,XXX more the The today. XXX,XXX approximately than year

was on our Our discussed which XXXX is in fourth line $X,XXX, Medicare in the quarter with we quarter PMPM for PMPM call. $X,XXX the estimated

slides information and our posted by our about available supplement membership month morning this our and member Additional mix our PMPM revenue per on is or website. line financial press updated release business per in of

Our ratio or by DCE medical XX.X% new to was a significant year in XX.X% compared the increase members. in driven MCR ago, the quarter cost

prior MCR was of Excluding DCE, start below our program. XXXX was our MCR the which XX%, the DCE to QX

over expect to management based DCE members past, XXs, the have provide time as MCR we value we the improve we chronic have discussed decline mid-to-high services which care in As in initially conditions. an to of primary

For expect fourth MCR maintain the This quarter in the XXXX, revenue. year reached XX.X% for of in health quarter addition under patients lower first the with which insurance direct stock-based medical half expense Direct reflects up EBITDA platform. Adjusted a on expense be the producing call. DCE EBITDA to of a XX.X%, the are significantly -- lower range was $XX.X to our total X.X% XX% quarter MCR has of in we discussed patient lower expectation capitated usual as population in the than second continued our to revenue. was than excluding than that we XX.X% This revenue other X.X%. will result the total XX% electric quarter, half. from SG&A are DCE as integration an the in This adjusted cost amount margin loss of and million, $XX was see of patient responsible conditions into Medicare higher is during XX% primarily holidays, of members our impact the million lower positive due in compensation. to higher our of the ago, procedures or maximum to stop as we the primarily each revenue, was policies

and our at to to was in due credit quarter million, and the was Now, about $XXX of $XXX liquidity. quarter includes with end payments first our of the $XXX sellers. revolving and million capital million the leases, Total flow me turn let line ended term first debt We debt, undrawn. cash long cash and

net as million, total total debt $XXX was less Our debt cash. defined

This requirements. activities was XXXX, quarter operating the working related in $XX million. capital During first largely used was to cash

For the year with July. and strong June company generate start throughout in come XXXX, expected the result cash largest in to discussed, for we or to payments year year, the the expect payment the full risk continue positive flows we adjustment as operating as of a will the of of to the continue Medicare

we the centers, Marlow over Within XXX As those had employee medical -- centers. providers. quarter with XXX

by XXX now end are the year. We to on expand the medical own centers of our range to track of to the XXX

So now let which March. me summarize outlook, our unchanged last since in guidance remains our XXXX

for We to XXX,XXX expect is range membership XXXX be in billion. $X.X $X.X to XXX,XXX. to the approximately expected to of billion revenue be Total

year XXXX, For range we to XX.X%. the of expect will our full the be MCR XX% in

the adjusted EBITDA We our million. expect medical owned of is to to $XXX expected operate to and million centers end $XXX XXX XXX be XXXX by to

interest expense $XX Additionally, of expense capital million to $XX $XX million million. we $XX expenditures compensation of stock-based to million, and to expect million of million, $XX $XX

Health As we June day open live along of to supporting model, be investor on I the an a.m. weeks the Relations drivers on priorities, webcast focusing look. questions. financial on strategic day X:XX be X website. investor call the Investor ago, we few the With announced business operator ask holding presentation the A Eastern of Cano’s a to materials company's with event that, your on and will day growth will time will available at


Thank you.

question from the [Operator first begin Your Adam America. session. of Braun question-and-answer now of the will comes Instructions] line We from Bank

Please Your line open. go is ahead.

Adam Braun

for Appreciate the Hey, the of of I Yes, think And how it mentioned ramping year. centers. the membership Capitated the MA was like you a XX% mentioned thanks. tuck-in you question. target, part for big rest the

I'm how some if XX% target go that that? sort longer higher should it sense, or So wondering we makes of or the is about it should term if think than

Marlow Hernandez

Marlow. is this morning, Good

that take me question. Let

That's the we But the Advantage. the Medicare a having Capitated which select Medicare hard Capitated our a see Advantage be time, to value other number membership that is to we also Medicare target in and we're mantra be be given on to if we percentage And membership. a solution continue based model it of month given That our away. That XX% we total Medicare something referring but Membership Over Cano brings any XX% day predict is we from thus we for and will First, just value patients the quarter toward whole, not don't will the patient will is the serve. is trend in of run rates populations been the confident serve are that preference. year. or for as though patients to and that that can other in a turn an one. likely entire population, based

the focus provide our Medicare. on and we most value for where However, is patients

model be the Therefore, of significant comfortable at Medicare percentage target patient is structural more in in XX% based particular, Our in United population this to guiding have this membership have a focus, a that and to a given we problems senior way total. evidence the populations approach healthcare health system healthcare to even designed our what such the as we Advantage point, specifically we significant and for States. underserved of Medicare will as portion in holistic, continue feel Medicare

Adam Braun

could follow appreciate that. I more up. one I If Okay, do

the here? think cut added XXXX. the new like were states as in and about should quarter the continued that sounds but a that with be of around about expansion that the last How few we affiliates be business? affiliates slower same Is first, maybe underperforming that ones part into is it? how growth you, you strategy Or should And go should may than think the it with of mentioned to just the I and you it stable and clinics? think we was some basically from something clinics or grow general,

Marlow Hernandez

to the centers. combination a markets, continue add owned therefore, Sure, centers, that other because markets, be to And proportion medical will we as makes in build how affiliates. they our manage, to designed sense will to certain but a most have provide specific as to the the hard defined creation and medical market has In in market continue solution. avenues. in our strategy own that it serve dynamics the and for a markets, of it predict the add with to clinical the to sense time, least is can company, size one patients we the specific all, because we're capital, best outcomes, In to more ROI. lowest the amount will we more great fits historically, we the respect is always a makes that not will adapt differentiator combination, be markets as affiliates with business to specifically value growth efficiency different it shown reflect each of been buy other we are And have to lines have risk, growth targeting the amount of most as to most best

and While is of for wellness a the growth have we and we're is that access which to distilled what quality number essentials, through solve non-negotiable, scalable, portable, into going three avenues.

base Our is simple. business

in I utilize payers, appropriate to costs, best order results. is It's like the to simple. in market, prevention, model market And business going depending avenue needs the of growth on answered needs wellness you I near we specific the that but on reduces centers. investing we to the visibility, give that building that depending served on medical going markets. buying previous access grounded vary think and specific and that quality the that to in be know of And can continue we proportion are the term being populations will the primary downstream populations, in the the the Our most care for what is those providers which and managing that we're the achieve question,

Adam Braun

appreciate it. Thanks,


of from the UBS. from next Our [ph] question line comes Andrew Mock

open. ahead. Your Please line is go

Unidentified Analyst

half an Can favorable how are impact patient to Brian, loss is the of MLR good Thanks. bit you the is impacted significantly a experience insurance that Hi, be? in expand around expected your morning. you this big stop by groups and year. which driving of lower on mentioned back

Brian Koppy

clarify. is of positive stop question. year, I'm individual what reached the half that no you. we referring members the is the to to Thank Yes, great It limit. going in effect loss Yes, taking their in loss back have have stop of will

of the loss seasonality stop in have individual type Medicare of is so at deductibles, we think year the don't kick of how So back and will that's half members what co those pays members. business. our for really We're mainly the plans our Advantage happens

point. really our at claims that overall experience So is capped

members. So you we've see see, in the you improved with come why incremental that's claim those and MCR half overall much of business. guided to, costs the And any more not book what what over do through will we've for second first MCR half be our

Unidentified Analyst

it. Got

end kind is So stop or in have this the weighted with doesn't clinic back describing. the do to change MCR fully expectation impact of loss that you're openings, really anything

Brian Koppy

Yes, DCE it's do to and also, point stop we the improvements then the too, year. the loss mentioned, I will see And more expect is that it's the continue the utilization. throughout third more program that

that's first are you when components really half at second those So the look three half. big

Unidentified Analyst

year and Can Got skew opening it. implies independent will have color And or centers you you clinics help so practices? if acquired also another pipeline toward around XX some then Thanks. or today, That's more full XXX centers affiliate helpful. year. M&A clarify, the guidance this put

Brian Koppy

about was keep build trying now. by Yes, determine sure. little we're and manage to optionality to growth, the buy, of open. the market market leaders decisions the We I'll whether it's, best be, reiterate strategy, I our about it really through really the are deployment the that a best of bit ones we capital, right to it's market, want talking use driving

being of through terms We terms planning our in of already new but what's those through deployment in year have within as centers next capital sites. tuck-ins the flexible expansions of we a the were go or additional then number some centers we're best that of

of in the these the day, a the we we're for that critically for to markets. we'll growth continued to And able be have center potential keep get trying sight; growth. added of to we flexibility. is to believe important at that of maximize line capacity, which each within our But important really the us So, end that's

want coming without As see that our the membership, markets through growth adding in. we're in online. we is various grow you can And to strong membership capacity

Unidentified Analyst

in. Got could last And one here. in sneak I one just if

understand help leaning or Thanks. the some you're months M&A, you into have over us how of trended so? that can XX Given past multiples tuck-in the transaction

Brian Koppy

Sure, the about robust have markets, around to active the of terms where a as in in we pipeline market intelligence of these last what very are what expanding quarter, we opportunities, I talked have and very it's think each similar working seen field we're the we really to in how And the become leadership, say, markets. people effectively and multiples continue more local reassess attractive. that's much making of grow we've the would some opportunities, to I they market their want market

the I and we're to more little So continue the sure make analysis and to a and capital become [Indiscernible] be multiples, in attractive think given and seen past. seeing most use the than doing we've with prudent the still we'll highest effective we're the in return. assessment that's those And, deploying diligent

Unidentified Analyst

for thanks Great, the color.


comes Colin. question from [Indiscernible] next from Gary Our line the of

Please is Your line open. ahead. go

Unidentified Analyst

good Hi, morning.

about up following seasonality. EBITDA Just on your comments

Just far. quarter third would thinking be there looks improvement the EBITDA we a quarter. just appreciate like, really Is it sense so little modeling, year? should been maybe to it that else be help made be through strongest sequential anything the has the historically, I Or course guess about? you've of Does be we of bit that way? comments make should appreciated? Any modeling sort the

Brian Koppy

I then always third, fourth. July that quarterly I'll June, throughout second, it between our view a sequential call third, little that and would should no, year. timing of a good it does question. There’s Yes, pattern bit it's the increase hit

to throughout changing today, knows, things, sequential historical fourth patterns. first of it's quarterly I views and of difficult year. everyone a different the a COVID we improvement second of here tend the the But as sit expect throughout as kind the pattern would third through be So trends little type various

Unidentified Analyst

only about? has about really the just once if DCE at, number color annually. Is number, about? sort Got to it. year which year-over-year. of wondering looking good maybe net as doesn't just net if and higher, you out any it's think I And know thinking but is, progresses? since that pretty settles looked that But Or that there's the day worth is calling DSO there those number, think claims XX reporting it sequentially, then provider drive DSO, to made a number a that net anything that off think to be stable really

Brian Koppy

good Yes, I that's question. think a

net saw accounting associated we're increase think of higher you see sort AR I up to that quarter is And for MRA is higher we of is well. the this this But in also lot as a keep have the with people, sequentially. that we you'll are mind is membership DCE going our the revenue. quarter where really that that due that

DCP increasing So look at from you those are first this ratio. the is And two a we where AR. to quarter drivers, that's that quarter DSO fourth when sequentially look business to

quarter. the in about Compare the can't sequentially. DCP, which yet. that's think up XX from that really days, XX you that days, is slightly quarter, to And So DSO flat fourth roughly see

You'll is that filed. the see when queue

unpaid roughly in you'll said the So the claims quarter provider which we queue. of see $XXX in had million, I

ratio that at in it's you to of quarter, take looking first DSO it fourth quarter to when really DCP, line. So

So we we year. that that. about think think that relationship to that go good throughout that And the I a holdings as way forward of as that's you good feel

Unidentified Analyst

there's per revenue a I enrollments. And direct month just two looking the two think the X% per benchmark. year member for of contracting, $X,XXX realized DCE haircut, one I on at Last versus or me in only here

does But your much seem still has real reflect does just numbers high? and of closer a Medicare the Or that that dual highly DCE to Is those very XXXX component that eligibles So geography? for the does members. comorbid high population? that of, benchmark that membership

Brian Koppy

Yes, It's really right no, it's you're on. geographic driven. really

PMPM the is those presence of correlated members. that the geographic widespread, is have highly membership We quite DCE and to

Unidentified Analyst

you. thank Okay,

Brian Koppy

Thank you.


comes line from of question Jason next Citi. Cassorla from Our

is open. line Your ahead. Please go

Jason Cassorla

the for thanks questions. Great,

maybe past, come the membership DCE Would in by noted between DCE this make that the of you've similar majority that affiliates own help physicians. a just upside, then what a a that, Thanks. of affiliates as on comparable? will and affiliates should that nuances point? Or model time. and noted your digit aggregate that DCE expect on mid-single to something are like affiliate within can there But You that you owned consider kind the centers owned? membership the Cano your you at And our follow served members is over absolute of split the margin become under experience we that for is

Brian Koppy

so behavior to usage, down. XXXX. we focus etcetera. the And lot a hospital And getting MCR engage big as fourth in about go order helps probably, lower lower given drive half Sure, medical quarter, treatment the high would of that's is just talked the see the certainly, continue. quarter back affiliates, the that we've we first the that membership, is call those expect the engagement improve, that coming some that for as will plan, the we is improvement DCE to of that or then we're centers. receive from of into a and member to Cano to kind DCE, affiliates changing as around care primary of will assigning member called we outside is would far the how a I And sequential how some expect majority so, And it CMS then membership of low in and is be year the emergency to exit room that doctor as the quality on care membership I’ll we and XXs, with admissions, MCR as talked the about that XX% nature the of which that

Jason Cassorla

Got it.

and give backdrop pressure basis? were thanks. maybe up, the by is revenue That's kind And And cost Okay, DCE, outside us for just MLR obviously, cost any in well just any labor areas of MLR maybe costs you're for considerations backdrop, can area Cano trending on follow an incremental of watching the at helpful. relatively update seeing like perhaps if on really it looks where absolute time? there an how cost, impacted out this was but you're then inflationary the you the managed, on

Brian Koppy

medical think And from affected one mean, entire I RNs. we're system a a us you inflation, yes, where country not in has Sure, note, by been see pronounced. of most important centers, do overall is. within I of the lot the thing number have to inflation we our as healthcare significant that's But wage the that's

fact higher costs have center the manage it under fewer that keep mind. baked most is by continue those wages full to we But control. But always really, top control my call certainly through and we'll outlook of seeing amongst But expense our those. staff. RNs, we front that So year. for factors the helps And our of are desk clearly, into

So very closely. we're to watch going it

Jason Cassorla

you. Thank Great. it. Got


Tanquilut Our next question Brian Jeffries. comes from from

is ahead. line Your open. go Please

Jack Sullivan

Hey, good Brian that morning, on MLR on assumption back of wanted guys. and It's progression Jack touch just to there. Sullivan for DCE Brian. around the

onset far of it's on visits quarter, per quantifiable. it's that and per how guess, today, through from sort understand the to you've engagement. I metrics from stats So any of maybe going member come they're give visits had thus DCE us on any trending patients better Are there are month you can

or what can for there you're already, you seeing expected put the around rest of the baked So Thanks. into what's expectations year. and

Brian Koppy

to XX%, And you as we if how, the were of was, booking it we or the I roughly, we MCR remember, the XX% down re the started around XX%. XXXX, point April then of program think the just I'll of year, program, last fourth significantly so. launch initial was were to Yes, you like I think you MCR that trended to quarter were

that amount of improvement we four point So or time. in five saw saw, good we short

DCE of see those of operational that improvement to know to members. cohort? and to we certainly we more improvement we'll with we of much those with I new this continue large color going we programs our engagement out And on do members, that how management will engage to expect Not continue we're do So, continue the throughout year. exactly if get as our exactly, give but

Jack Sullivan

then about And were for XXXX. one more we in markets entered think helpful. That's expanded me it. really just as Got that or

are you're Specifically things and Texas you how on can those color here, any us or that seeing. trending Nevada give thinking about

Marlow Hernandez

of proud performance Nevada. very Well, let in one. And me our take Texas and that

beyond estimates, added seen have scores utilization of membership, through XXXX, and per as really populations membership, regions bug value the performance. MPS day. accelerate that the in and other at the good. exciting. full mirrored think our be can promoter by our scores programs. at we've above course, upcoming of see admissions And to based got additional have providing take and filings There model the investor color will, other to operating I for as I’ve well or But The to look our our in of service scores have It's been a been or is quality We a The in Nevada. what's there. team we The have manage in those scale expectations, Texas the And ramp Texas year. build happening from that have different well. growth, we're our and and exciting, the and will markets key this in time density in significant very amount DCE ability net deployment congratulate in It's very really end Nevada by short of line data of that seeing initial the our now in markets Florida years. growth as you

Jack Sullivan

And quarter. forward Got Nice in looking the it. to Thanks again. then. job

Marlow Hernandez

Thank you.


Justin question Lake comes of the Our Research. from from next line Wolfe

Please ahead. is go Your open. line

Justin Lake

Thanks. Good morning.

that I he First losses. not? you number Can got on a for give remember that us or de to have year? the it if just question you expect novo for can't

Brian Koppy

We didn't. Justin. that, didn't we guide to Yes,

of new the how many make and to kind really That's tuck-ins. assumptions to you builds around through of the view medical think come will how think those of center you more versus new openings the how to way I it. some of

Justin Lake

range. that million ballpark? $XX estimate Is the of like, that in We're our

Brian Koppy

a me. Yes, which feels higher, XX little to right ish, about million bit maybe

top head. the my Just quick off

Justin Lake

Then they use, us can Okay. many centers losses. was quarter, centers remind that convention you the in a XX around number? of XX-month how Can in million there many you there? like rolling were How

Brian Koppy

rolling Yes, I we'll line last to about talked when but on XX have we've come know the get past the the think I centers we on. so year, on. those -- I number have brought it's well, Yes, in back I'll

take that that look a kind and So through. of can talk take scheduling, that we at

Justin Lake

in of have ish, you of line your first in that would mind this, Okay, number expected where but kind it. was quarter

Brian Koppy

Yes, that's correct.

Justin Lake

on And cash then flow.

positive that the said for company be the flow I years, you you to expect think correct? is cash

Brian Koppy

Yes, cash That's operations correct. from positive? flow

Justin Lake

of any Okay, and us you're to terms what the give estimate want there you thinking kind for year? in of

Brian Koppy

talked a the Well, is, the that And about say, the think what June July we business. in risk -- past in think I I I time through. what period we've I've payment the to first that quarter today, know to was Medicare about that also important positive seeing adjustment momentum talked it's should No, comes year we've start in good

in least at in that, operating see really to quarter, that you when our from flow that that's shift negative cash positive. So

Justin Lake

balance it. I'm as Got cash the Got what or… the modestly de-novo markets put it's tuck-in some credit is I get it. how the we the, acquisitions, guess see of the with trying kind the if year? point, the to running positive with through it do to just, you to At

Brian Koppy

we us put No, our going? to to where great, need that XXXX That's guidance you in does that any assume it's not important, I order achieve out guidance. we the capital today think And a additional point. for great

trajectory the and roll on to that be think doing just well. do based we're of able that, seeing really the is we're performance, membership business a the we based great on we're So to per through, overall operations the seeing on good the quite good

feeling our very XXXX achievement about our So games. we're positive of

Justin Lake

are of guess a in you of look done the know those tuck-ins I tuck-ins up far. more I just last what earlier question was those if then to And so historically great. terms deals you've been follow there or question, those And kind of tuck-ins. on of are, affiliated of back, Okay, most nature

Brian Koppy

take it's model for growth could who for the potential XX:XX. Just affiliates and versus inorganic added we own their own and to within require your the growth financing. question, But have There's centers. factors on does include that even our that make And building new account lot kind I into ones, to a or several XXXX say times, deployment centers medical membership bag a scenarios, will that those model, or that guidance think transitioning not not physical a we under have this of our a reiterated those our additional both it's ROI analyze already does in mixed, would of nearby roughly and In capital providers of as we time, decision. last we expanding to practice. about established over mixed are capital

year growth, makes gives to beyond most grow that optionality model continue business it our and profitable this us which the is great Our for way shareholders. to the and sense for

of As most the amount with for and the least of best the look patients we've growth least the amount our reach got continue Brian all but risk, to mentioned, of a to robust And to pipeline. deploy time we avenues ways ROI. will

or side case we, us in are in capital find M&A other we to forms going And from that to attractive capital financing. the it markets that so the the so opportunities looking at of look a raise future, that merits


line of Raskin Our from Research. Josh next Nephron in comes question

is open. go line Please ahead. Your

Josh Raskin

Hi, morning. thanks. Good

assumption kind bunch lives the re-verifications end Just end the of don't year of Is I’m looking exchanges? the was at the up a opening quarter simply just low will Or through grow. to run revenue you rate, We've it at conservatism? just of are? de-novo offsets and there the some curious on guidance. DCE or first in MA Medicaid looking growth are you're got what whole attrition, that already above the

Brian Koppy

some year, the talked about for we're then and we're, street And year. program overall natural the have Yes, guiding Josh, year, the us, the we're that of get I throughout way DCE our and thinking in good guidance, some slight generally membership, that's as we'll the because attrition the year. we about through through we assignment the the I claims would we've feel it. think up and say you we our right go to you think, update within the I beginning of you'll through And that pick just now, always go that just in as attrition

Josh Raskin

All Okay. right.

are understanding or But So it versus you in have last payers then months there's a lot centers in across the been got there. nothing there are I'm others? so. curious, performance specific if see XX if you've geographies And filled I'm differences then seeing curious any the with specific performance that with of your differences call payer, of the also And centers. a geographies? anything new you just that, heavily added are in specific bigger geographies, different the just

Marlow Hernandez

at across to we through something harder patient long so our seen, we with, DCE answer having similar is several the and panorama, into the are generally you business. the course, panel, within the there level with Since significantly we that not be so a a that then region. negative service can network, a than of to there which be of example, but that ensure individual sure payers dozen dozens have certain only Florida, given with have result, integrate have favorable least have performance market established the seen Whereas, have that you have of improve when XXXX, level, on us regional as we we have the line an seen or for for to number be number best South what dozens density, of given on those partner partners with scale and are would Advantage, members as the different a then a outliers any density. on service of said, need patient of that of are our one of more to once members, ill XXXX ensure we our Medicare the but giving operate panel other pairs And work about. a cause significant region particularly to started in question. kind for There with performance, an also time patients scale that only that to but we of performance. within with those short in depend we we being Josh, payer significant performance selective of as And patients sure, make the to see that there's for member or we have side in market and year, a when and is have Medicare a is the all a affect have Brian program But and you patient contracts will services fund the growing outcomes to payer, a account. there's we given payer or improvement patients, markets a data And for things to example, more appropriate and different then it's payer given last need impact. Advantage. that payer that and than a patients, is are need and of will does line given That to taken the to highly we generally outside being talking what achieved level all critical want of have is feeds for equal. But basis, that being offer optimal response over you plans specialty a economics. talking that on station members, what a is we you lot That was that significant to really partner. but any payer, you important achieve we've metro And been component Medicare a for of irrespective an within serve

Josh Raskin

actually That relatively critical Whereas, with like may it important, critical well that getting think important get the specific that overall factor. plans once the or scale probably so to more to it. right okay, sounds the way tend or it's a all relatively most within specific critical the perform mass. about mass you to is That's aligned contract

Marlow Hernandez

has own infrastructure the an way you're market. managing of is the started our that share, payer that just patient overall mentioned, own equally, does it's context the established exact about that affects some and I and In it. given at market the already to than reasons membership, tend right and If payers for very the perform context but has panel. that share the that same to of material, That's infrastructure, for market it a that one in already market, think different

Josh Raskin

you. got Thanks. All Yes, right.


have We of Ron Adam question from America. another line the Bank from of

ahead. is go open. line Your Please

Adam Ron

is this Hey, Adam.

you're color more little just bit background, and hear for MLR think on down. DCE year, ramping now it's XXXX. in you QX were and you expecting the in the in mentioned what because was but can excluding seeing saying MLR the you versus non-COVID. throughout ramping QX And utilization year, hoping terms lower rest up And if the just a I of noise COVID you of give But last quarter was what Sorry, the you're year.

I'm the curious on what non-DCE? what you So the the in half and quarter you're for just back saw expecting

Marlow Hernandez

bit we of were new Yes, similar a increase but believe but -- other people in it we utilization think that year, utilization we're through we year direction and higher go And saw the cost lower the the to number saw, in of to in the the very more overall, little the came I for and tends utilization stabilized the the the come days line really as the half impact. right So from holidays, etcetera. we of trending what as of year, into of back January, just

the it as expecting in not we're anything past. unusual, put So seen abnormal, or I'll we've

on from it go earlier. our look keep improvement close as a we'll to operational mentioned at we we and down quarter And, see first I every as track emissions key every we we that week, every day, statistics some as So MCR, quarter, month. in the other fourth should eye

Adam Ron

you Thanks already I added your think new don't is which XXXX. Florida, And states I And appreciate any all in of biggest centers, were it. seven one the quarter, In which market? for questions. last no, one. for five the

you states was markets capital just curious in states full I on So adding year just the what point market at amount what capacity into new of philosophy this and position. existing and curious the within in is a that? think be to new keep how I'm expanding grow stronger constant the or idea markets, may about is

Brian Koppy

in. to build, continue that to and we're one. a on we build overall I'll XX, And our operational many expand take proximity, really, in are scale significant very go focused going medical contracting centers Yes, buy so in you're X, And a in our X, Yes, just markets When that's whether were I density. through manage you the we the true and those states believers incremental We're think from, provides X, of take density strategy. add number costs, you add are close improvements our XX, leverage I'll and buy, effectiveness. within benefits. and it's XX scale our right, SG&A can

stick this And And, the the still to planned we growing as we we're we're to our for going that so, have in, we're is year, Florida an market. Florida, least we're not look important growth. at opportunities, states where at where of and exclusion at

still well. we have But there. great grow entered in, to that continue in in as we'll we're So opportunities states we've the that

Adam Ron

Thanks Makes much. sense. so


the conclude back session, That call I'll -- does turn Koppy. the Brian over to

Brian Koppy

you. have thank one as And day. do Xth, on time for time Investor I just today. appreciate a reminder, our everyone's Thank have last Great, your so then. great everyone to look Day you we to coming we and forward talking


conference gentlemen, participating. and today's Ladies for Thank you call. concludes this

now You disconnect. may