P3 Health Partners Reports $373.2 Million Revenue, $44.2 Million Net Loss in Q1 2025

P3 Health Partners Inc. reported a total operating revenue of $373.2 million for the first quarter of 2025, a decrease of 4% from $388.5 million in the same period of 2024. The decline was primarily attributed to a 9% reduction in the number of at-risk members, which fell from 126,800 to 115,500, as the company strategically terminated underperforming payor contracts and affiliate providers. Capitated revenue, which constitutes the majority of the company's income, decreased to $369.5 million from $384.1 million year-over-year. Other patient service revenue also saw a decline, dropping to $3.7 million from $4.4 million.

The company's operating expenses for the quarter were $411.3 million, down from $432.3 million in the previous year, reflecting a 5% reduction. Medical expenses accounted for the largest portion of these costs, totaling $372.0 million, a decrease of 3% from $382.1 million. The premium deficiency reserve showed a significant improvement, resulting in a benefit of $7.0 million compared to an expense of $1.0 million in the prior year, indicating better management of contract profitability. Despite these reductions, P3 Health Partners reported a net loss of $44.2 million, slightly less than the $49.6 million loss recorded in the first quarter of 2024.

In terms of strategic developments, P3 Health Partners executed a 1-for-50 reverse stock split on April 11, 2025, aimed at meeting Nasdaq listing requirements. The company also entered into a financing agreement with VBC Growth SPV 4, LLC, securing up to $30 million through a promissory note, which will help support its operations amid ongoing losses. Additionally, P3 Health Partners finalized the sale of its remaining Florida operations on May 1, 2025, for approximately $0.1 million, as part of its strategy to streamline operations.

Operationally, P3 Health Partners maintained a network of approximately 2,800 primary care physicians across 27 markets in five states. The company continues to focus on expanding its membership base and improving care quality through its value-based care model. However, the company faces challenges, including a working capital deficit of $315.6 million as of March 31, 2025, and ongoing losses, which raise concerns about its ability to continue as a going concern without additional capital.

Looking ahead, P3 Health Partners anticipates continued operating losses and negative cash flows as it invests in growth and membership expansion. The company is actively exploring options for raising additional capital through debt and equity financing. However, there is no assurance that such financing will be available on favorable terms, which could significantly impact its operations and financial condition. The management's outlook remains cautious, emphasizing the need for effective cost management and strategic growth initiatives to navigate the current market challenges.