Astrana Health Revenue Soars 63% YOY, But Net Income Plummets

TL;DR

**Astrana's revenue looks great, but the massive jump in costs and debt means profits are getting squeezed – proceed with caution.**

AI Summary

Astrana Health, Inc. reported a significant increase in total revenue for the nine months ended September 30, 2025, reaching $2,231,243 thousand, up from $1,369,331 thousand in the prior year, primarily driven by a substantial rise in capitation, net, to $2,061,451 thousand from $1,239,885 thousand. Despite this revenue growth, net income attributable to Astrana Health, Inc. decreased to $16,488 thousand for the nine-month period in 2025, compared to $50,100 thousand in 2024. This decline was largely due to a sharp increase in operating expenses, with cost of services rising to $1,984,756 thousand from $1,148,422 thousand, and general and administrative expenses increasing to $157,009 thousand from $112,478 thousand. The company also experienced a significant increase in interest expense, more than doubling to $32,408 thousand from $25,028 thousand. Total assets grew substantially to $2,237,186 thousand as of September 30, 2025, from $1,354,894 thousand at December 31, 2024, mainly due to increases in cash and cash equivalents, receivables, intangible assets, and goodwill, reflecting recent acquisitions like certain businesses and assets of Prospect Medical Holdings, Inc. The company's long-term debt also surged to $1,002,026 thousand from $425,299 thousand, indicating increased leverage.

Why It Matters

Astrana Health's substantial revenue growth, primarily from capitation, signals strong market penetration and successful integration of new business, potentially enhancing its competitive position against rivals like Optum or DaVita in the value-based care space. However, the sharp decline in net income and rising operating costs, coupled with a significant increase in long-term debt, raises concerns about profitability and financial leverage. Investors should scrutinize the efficiency of recent acquisitions and the company's ability to manage costs and debt, as these factors will dictate future shareholder returns and the sustainability of its growth strategy in a competitive healthcare landscape. Employees and customers might see continued expansion of services, but the financial strain could impact future investments in innovation or compensation.

Risk Assessment

Risk Level: high — The company's net income attributable to Astrana Health, Inc. plummeted by 67% from $50,100 thousand in the nine months ended September 30, 2024, to $16,488 thousand in the same period of 2025, despite a 63% revenue increase. This significant drop in profitability, coupled with a 135% increase in long-term debt to $1,002,026 thousand from $425,299 thousand, indicates substantial financial risk and increased leverage.

Analyst Insight

Investors should exercise caution and conduct a deeper dive into Astrana Health's cost structure and acquisition integration. While revenue growth is impressive, the significant decline in net income and ballooning debt suggest potential operational inefficiencies or integration challenges that could erode shareholder value. Consider waiting for clearer signs of improved profitability and debt management before investing.

Financial Highlights

debt To Equity

N/A

revenue

$2,231,243

operating Margin

N/A

total Assets

$2,237,186

total Debt

$1,002,026

net Income

$16,488

eps

$0.33

gross Margin

N/A

cash Position

$462,227

revenue Growth

+63%

Revenue Breakdown

Key Numbers

• $2,231,243 — Total Revenue (Increased from $1,369,331 thousand for the nine months ended September 30, 2024, representing a 63% increase.)
• $16,488 — Net Income Attributable to Astrana Health, Inc. (Decreased from $50,100 thousand for the nine months ended September 30, 2024, representing a 67% decrease.)
• $2,061,451 — Capitation, net (Increased from $1,239,885 thousand for the nine months ended September 30, 2024, driving revenue growth.)
• $1,984,756 — Cost of services (Increased from $1,148,422 thousand for the nine months ended September 30, 2024, contributing to reduced net income.)
• $1,002,026 — Long-term debt, net of current portion and deferred financing costs (Increased from $425,299 thousand as of December 31, 2024, indicating higher leverage.)
• $2,237,186 — Total assets (Increased from $1,354,894 thousand as of December 31, 2024, reflecting growth and acquisitions.)
• $32,408 — Interest expense (Increased from $25,028 thousand for the nine months ended September 30, 2024, impacting profitability.)
• $0.33 — Diluted Earnings Per Share (Decreased from $1.04 for the nine months ended September 30, 2024.)

Key Players & Entities

• Astrana Health, Inc. (company) — registrant
• Prospect Medical Holdings, Inc. (company) — acquired business
• Allied Physicians of California, a Professional Medical Corporation (company) — consolidated affiliate and VIE
• Centers for Medicare & Medicaid Services (regulator) — oversight of healthcare programs
• The Nasdaq Stock Market LLC (regulator) — exchange where common stock is registered
• SEC (regulator) — Securities and Exchange Commission
• Optum (company) — competitive context
• DaVita (company) — competitive context

FAQ

Risk Factors

• Increased Leverage and Debt Obligations [high — financial]: The company's long-term debt surged to $1,002,026 thousand as of September 30, 2025, from $425,299 thousand at December 31, 2024. This more than doubling of debt indicates significantly increased financial leverage and associated interest expense, which rose to $32,408 thousand from $25,028 thousand.
• Rising Cost of Services [high — operational]: The cost of services increased substantially to $1,984,756 thousand for the nine months ended September 30, 2025, up from $1,148,422 thousand in the prior year. This disproportionate rise in costs relative to revenue growth is a key factor in the decline of net income.
• Increased General and Administrative Expenses [medium — operational]: General and administrative expenses grew to $157,009 thousand from $112,478 thousand for the nine-month period. This increase, alongside the rise in cost of services, contributed to the reduced profitability.
• Declining Net Income Despite Revenue Growth [high — financial]: While total revenue increased by 63% to $2,231,243 thousand, net income attributable to Astrana Health, Inc. decreased by 67% to $16,488 thousand. This divergence highlights significant margin compression.
• Growth in Intangible Assets and Goodwill [medium — financial]: Total assets grew to $2,237,186 thousand, largely due to increases in intangible assets ($285,060k from $118,179k) and goodwill ($863,266k from $419,253k), reflecting recent acquisitions like Prospect Medical Holdings, Inc.
• CMS Program Participation [medium — regulatory]: The company participates in the ACO REACH Model and Medicare Shared Savings Program (MSSP). While not explicitly detailed as a risk in this section, changes in CMS regulations or reimbursement policies for these programs could materially impact financial results.

Industry Context

The healthcare services industry, particularly managed care and provider networks, is characterized by increasing regulatory scrutiny, evolving payment models (like capitation and value-based care), and significant consolidation. Companies like Astrana Health operate in a competitive landscape where scale, operational efficiency, and effective management of patient populations are critical for profitability.

Regulatory Implications

Astrana's participation in CMS programs like ACO REACH and MSSP exposes it to regulatory risks associated with changes in program rules, reimbursement rates, and compliance requirements. The California Department of Managed Health Care (DMHC) is also mentioned, indicating state-level regulatory oversight.

What Investors Should Do

1. Monitor operating expense trends, particularly cost of services and G&A.
2. Analyze the impact of increased leverage on future financial flexibility.
3. Evaluate the integration and performance of recent acquisitions.

Glossary

ACO REACH Model

ACO Realizing Equity, Access, and Community Health Model, a program administered by CMS. (Indicates participation in a specific government healthcare initiative that could impact revenue and operations.)

MSSP

Medicare Shared Savings Program, another CMS initiative aimed at improving care quality and reducing costs. (Similar to ACO REACH, participation in this program is a key aspect of the company's business model.)

Capitation, net

Revenue received on a per-member, per-month basis, often used in managed care contracts, net of related costs or adjustments. (The primary driver of Astrana's revenue growth, highlighting the importance of its managed care business.)

Goodwill

An intangible asset that arises when a company acquires another company for a price greater than the fair value of its identifiable net assets. (A significant portion of Astrana's asset growth is attributed to goodwill, indicating substantial acquisition activity.)

VIE

Variable Interest Entity, a type of legal structure used to hold assets or conduct business, often requiring consolidation onto the balance sheet of the primary beneficiary. (Astrana consolidates VIEs, meaning their financial results are included in Astrana's consolidated statements.)

Year-Over-Year Comparison

Astrana Health reported a substantial 63% increase in total revenue for the nine months ended September 30, 2025, driven by capitation growth. However, this top-line expansion was accompanied by a significant 67% decrease in net income, as operating expenses, including cost of services and G&A, rose disproportionately. The company's balance sheet shows a dramatic increase in total assets, fueled by acquisitions, but also a more than doubling of long-term debt, indicating a higher leverage profile compared to the prior year.

Key Financial Figures

• $0.001 — nge on Which Registered Common Stock, $0.001 par value per share ASTH The Nasdaq

Filing Documents

• asth-20250930.htm (10-Q) — 4667KB
• asth-ex31_1.htm (EX-31.1) — 18KB
• asth-ex31_2.htm (EX-31.2) — 17KB
• asth-ex32.htm (EX-32) — 14KB
• img124449390_0.jpg (GRAPHIC) — 35KB
• 0001193125-25-274359.txt ( ) — 19030KB
• asth-20250930.xsd (EX-101.SCH) — 2168KB
• asth-20250930_htm.xml (XML) — 4291KB

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 51 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 66 Item 4.

Controls and Procedures

Controls and Procedures 66 PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 67 Item 1A.

Risk Factors

Risk Factors 67 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 69 Item 3. Defaults Upon Senior Securities 69 Item 4. Mine Safety Disclosures 69 Item 5. Other Information 69 Item 6. Exhibits 70 2 Glossary The following abbreviations or acronyms that may be used in this document shall have the adjacent meanings set forth below: ACO REACH ACO Realizing Equity, Access, and Community Health ADSC Advanced Diagnostic and Surgical Center, Inc. AHMC AHMC Healthcare Inc. AHMS Advanced Health Management Systems, L.P. AHM Astrana Health Management, Inc. (f/k/a Network Medical Management Inc.) APC Allied Physicians of California, a Professional Medical Corporation APC-LSMA APC-LSMA Designated Shareholder Medical Corporation Astrana Astrana Health, Inc. (f/k/a Apollo Medical Holdings, Inc.) Astrana Medical Astrana Health Medical Corporation (f/k/a AP-AMH Medical Corporation) Astrana Care Partners Medical Astrana Care Partners Medical Corporation (f/k/a AP-AMH 2 Medical Corporation) CFC Community Family Care Medical Group IPA, Inc. CHS Collaborative Health Systems, LLC, Golden Triangle Physician Alliance, and Heritage Physician Networks CMS Centers for Medicare & Medicaid Services DMHC California Department of Managed Health Care IPA Independent Practice Association MSSP Medicare Shared Savings Program Prospect Certain businesses and assets of Prospect Medical Holdings, Inc. acquired by the Company Sun Labs Sun Clinical Labs VIE Variable Interest Entity 3 INTRODUCTORY NOTE Unless the context dictates otherwise, references in this Quarterly Report on Form 10-Q to the "Company," "we," "us," "our," and similar words are references to Astrana Health, Inc., a Delaware corporation ("Astrana"), and its consolidated subsidiaries and affiliated entities, as appropriate, including its consolidated variable interest entities ("VIEs"). This Quarterly R

– FINA NCIAL INFORMATION

PART I – FINA NCIAL INFORMATION

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ASTRANA HEALTH, INC. CONDENSED CONSOLIDATE D BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) September 30, 2025 December 31, 2024 (Unaudited) Assets Current assets Cash and cash equivalents $ 462,227 $ 288,455 Investment in marketable securities 1,221 2,378 Receivables, net (including amounts with related parties) 381,215 275,990 Income taxes receivable — 19,316 Other receivables 9,891 29,496 Prepaid expenses and other current assets 23,162 22,861 Loans receivable 5,913 — Total current assets 883,629 638,496 Non-current assets Property and equipment, net 56,164 14,274 Intangible assets, net 285,060 118,179 Goodwill 863,266 419,253 Income taxes receivable, non-current 15,943 15,943 Loans receivable, non-current 48,474 51,266 Investments in other entities – equity method 18,462 39,319 Investments in privately held entities 8,896 8,896 Operating lease right-of-use assets 33,936 32,601 Other assets 23,356 16,667 Total non-current assets 1,353,557 716,398 Total assets (1) $ 2,237,186 $ 1,354,894 ASTRANA HEALTH, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) September 30, 2025 December 31, 2024 (Unaudited) Liabilities, Mezzanine Deficit, and Stockholders' Equity Current liabilities Accounts payable and accrued expenses $ 209,747 $ 106,142 Fiduciary accounts payable 4,476 8,223 Medical liabilities 333,969 209,039 Income taxes payable 4,919 — Operating lease liabilities 7,181 5,350 Current portion of long-term debt 47,865 9,375 Other liabilities 21,773 27,479 Total current liabilities 629,930 365,608 Non-current liabilities Deferred tax liability 4,429 4,555 Operating lease liabilities, net of current portion 30,171 30,654 Long-term debt, net of

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