Oscar Health Swings to Loss Despite Revenue Surge

TL;DR

**OSCR's revenue growth is overshadowed by ballooning medical costs, making it a risky bet until they prove cost control.**

AI Summary

Oscar Health, Inc. reported a significant increase in revenue for the nine months ended September 30, 2025, reaching $8.896 billion, up from $6.785 billion in the prior year, primarily driven by a rise in premium revenue to $8.723 billion from $6.626 billion. Despite this revenue growth, the company experienced a net loss of $90.540 million for the nine-month period, a reversal from a net income of $178.979 million in the same period of 2024. The third quarter of 2025 alone saw a net loss of $137.450 million, compared to a $54.596 million loss in Q3 2024. Operating expenses surged to $8.958 billion for the nine months, largely due to medical expenses increasing to $7.398 billion from $5.267 billion. The company expanded its member base to approximately 2.1 million effectuated members as of September 30, 2025. A key strategic move was the May 2025 acquisition of INSXCloud, IHC Specialty Benefits, and Healthinsurance.org, aimed at strengthening its individual market presence. Risks include the ability to manage medical costs, potential changes to risk adjustment programs, and compliance with evolving healthcare regulations.

Why It Matters

Oscar Health's shift from profitability to a significant net loss, despite robust revenue growth, signals potential challenges in managing escalating medical costs within the competitive health insurance market. For investors, this raises concerns about the company's path to sustainable profitability and its ability to effectively scale its operations. Employees and customers might see impacts on service offerings or premium adjustments as the company navigates these financial pressures. In the broader market, Oscar's performance reflects the inherent volatility and cost management difficulties faced by tech-driven health insurers, especially with the ongoing evolution of ACA regulations and the competitive landscape dominated by established players.

Risk Assessment

Risk Level: high — Oscar Health reported a net loss of $90.540 million for the nine months ended September 30, 2025, a significant decline from a net income of $178.979 million in the prior year. This is primarily driven by a substantial increase in medical expenses, which rose to $7.398 billion from $5.267 billion, indicating challenges in cost management despite premium revenue growth.

Analyst Insight

Investors should exercise caution and closely monitor Oscar Health's upcoming earnings reports for signs of improved cost management and a clear path to profitability. Consider holding off on new investments until there's concrete evidence that the company can control its medical expenses and translate revenue growth into sustainable net income.

Financial Highlights

revenue

$8.896B

operating Margin

-0.7%

net Income

-$90.540M

eps

-$0.35

cash Position

$2.149B

revenue Growth

+31.1%

Revenue Breakdown

Key Numbers

• $8.896B — Total Revenue (Increased from $6.785 billion in 2024 for nine months ended Sept 30)
• $8.723B — Premium Revenue (Increased from $6.626 billion in 2024 for nine months ended Sept 30)
• $90.540M — Net Loss (For nine months ended Sept 30, 2025, compared to $178.979 million net income in 2024)
• $137.450M — Net Loss (Q3 2025) (For three months ended Sept 30, 2025, compared to $54.596 million net loss in Q3 2024)
• $7.398B — Medical Expenses (Increased from $5.267 billion in 2024 for nine months ended Sept 30)
• 2.1M — Effectuated Members (As of September 30, 2025, indicating membership growth)
• $410.000M — Proceeds from long-term debt (For nine months ended Sept 30, 2025, indicating financing activities)
• $1.564B — Benefits payable (As of September 30, 2025, increased from $1.356 billion at Dec 31, 2024)

Key Players & Entities

• Oscar Health, Inc. (company) — registrant
• New York Stock Exchange (regulator) — exchange where OSCR is traded
• Thrive Capital Management, LLC (company) — affiliated investment funds
• INSXCloud, Inc. (company) — acquired in May 2025
• IHC Specialty Benefits, Inc. (company) — acquired in May 2025
• Healthinsurance.org, LLC (company) — acquired in May 2025
• Chief Executive Officer (person) — chief operating decision maker
• Securities and Exchange Commission (regulator) — filing oversight
• Patient Protection and Affordable Care Act (regulator) — influences market operations
• Bloomberg (company) — publisher

FAQ

Risk Factors

• Medical Cost Management [high — operational]: The company's ability to manage medical costs is critical, as evidenced by the significant increase in medical expenses to $7.398 billion for the nine months ended September 30, 2025, up from $5.267 billion in the prior year. Failure to control these costs directly impacts profitability.
• Risk Adjustment Program Changes [medium — regulatory]: Changes to government risk adjustment programs could materially impact revenue and profitability. The company relies on these programs, with a risk adjustment transfer receivable of $92.581 million as of September 30, 2025.
• Healthcare Regulation Compliance [medium — regulatory]: Oscar Health operates in a highly regulated industry. Evolving healthcare regulations require continuous compliance efforts and can introduce new costs or operational challenges.
• Competition in Individual Market [medium — market]: The acquisition of INSXCloud, IHC Specialty Benefits, and Healthinsurance.org aims to strengthen its individual market presence, indicating a competitive landscape where market share is actively being pursued.
• Net Loss Trend [high — financial]: The company reported a net loss of $90.540 million for the nine months ended September 30, 2025, a significant reversal from a net income of $178.979 million in the prior year. This trend raises concerns about financial sustainability.
• Operating Expense Growth [high — operational]: Total operating expenses increased to $8.958 billion for the nine months ended September 30, 2025, from $6.580 billion in the prior year, primarily driven by medical costs. This rapid expense growth outpaced revenue growth in the third quarter.

Industry Context

The health insurance industry is characterized by intense competition, regulatory oversight, and a constant need to manage medical costs. Key trends include the shift towards value-based care, increasing consumer demand for personalized plans, and the ongoing impact of government policies on market dynamics. Oscar Health operates primarily in the individual and small group markets, facing established players and emerging insurtech companies.

Regulatory Implications

Oscar Health is subject to extensive federal and state healthcare regulations, including the Affordable Care Act (ACA). Changes in regulations, particularly concerning risk adjustment programs and essential health benefits, pose significant risks. Compliance requires ongoing investment and can impact product offerings and financial performance.

What Investors Should Do

1. Monitor medical loss ratio (MLR) trends closely.
2. Evaluate the effectiveness of recent acquisitions.
3. Assess the impact of regulatory changes on future earnings.
4. Analyze membership growth versus profitability.

Key Dates

• 2025-09-30: Nine Months Ended — Reported $8.896B in revenue, but a net loss of $90.540M, indicating increased operational costs and a shift from prior year profitability.
• 2025-09-30: Third Quarter Ended — Reported a net loss of $137.450M, a worsening trend compared to the prior year's Q3 loss of $54.596M.
• 2025-05-01: Acquisition of INSXCloud, IHC Specialty Benefits, and Healthinsurance.org — Strategic move to bolster presence in the individual health insurance market.
• 2025-09-30: Effectuated Members — Reached approximately 2.1 million members, showing continued growth in the customer base.

Glossary

Effectuated Members

The number of members whose health insurance coverage has become active and is in force. (Indicates the company's market penetration and customer base size, with 2.1 million as of September 30, 2025.)

Premium Revenue

Revenue generated from the sale of health insurance policies. (The primary revenue driver for Oscar Health, totaling $8.723 billion for the nine months ended September 30, 2025.)

Medical Expenses

Costs incurred by the company for healthcare services provided to its members. (A major expense category, which significantly increased to $7.398 billion for the nine months ended September 30, 2025, impacting profitability.)

Risk Adjustment

A healthcare payment adjustment mechanism designed to compensate health plans for the health status of their enrollees. (Crucial for revenue stability; changes can significantly impact financial results, with a receivable of $92.581 million noted.)

Noncontrolling Interests

The portion of equity interest in a subsidiary that is not attributable to the parent company. (Represents minority ownership in consolidated entities, with a minor impact on net income/loss attributable to Oscar Health, Inc.)

Year-Over-Year Comparison

Oscar Health reported a substantial increase in total revenue to $8.896 billion for the nine months ended September 30, 2025, up from $6.785 billion in the prior year, driven by premium revenue growth. However, this top-line expansion was overshadowed by a significant deterioration in profitability, with the company posting a net loss of $90.540 million compared to a net income of $178.979 million in the same period last year. Medical expenses surged by over 40%, leading to a widening operating loss and a negative net income for the period. New risks related to the integration of recent acquisitions and continued medical cost management challenges are now more prominent.

Key Financial Figures

• $0.00001 — which registered Class A Common Stock, $0.00001 par value per share OSCR New York Stock

Filing Documents

• oscr-20250930.htm (10-Q) — 1325KB
• ex102amendmenttoinvestment.htm (EX-10.2) — 29KB
• a3q25oscrex311.htm (EX-31.1) — 10KB
• a3q25oscrex312.htm (EX-31.2) — 10KB
• a3q25oscrex321.htm (EX-32.1) — 5KB
• a3q25oscrex322.htm (EX-32.2) — 6KB
• 0001568651-25-000037.txt ( ) — 7561KB
• oscr-20250930.xsd (EX-101.SCH) — 48KB
• oscr-20250930_cal.xml (EX-101.CAL) — 115KB
• oscr-20250930_def.xml (EX-101.DEF) — 177KB
• oscr-20250930_lab.xml (EX-101.LAB) — 585KB
• oscr-20250930_pre.xml (EX-101.PRE) — 395KB
• oscr-20250930_htm.xml (XML) — 1285KB

FORWARD LOOKING STATEMENTS

FORWARD LOOKING STATEMENTS 3

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited) Condensed Consolidated Statements of Operations 5 Condensed Consolidated Statements of Comprehensive Income 6 Condensed Consolidated Balance Sheets 7 Condensed Consolidated Statements of Stockholders' Equity 8 Condensed Consolidated Statements of Cash Flows 9 Notes to Condensed Consolidated Financial Statements Note 1 - Organization 10 Note 2 - Earnings Per Share 12 Note 3 - Revenue Recognition 13 Note 4 - Investments 13 Note 5 - Fair Value Measurements 15 Note 6 - Restricted Cash and Restricted Deposits 16 Note 7 - Benefits Payable 17 Note 8 - Debt 17 Note 9 - Reinsurance 20 Note 10 - Business Arrangements 22 Note 11 - Related Party Transactions 22 Note 12 - Commitments and Contingencies 22 Note 13 - Segment Information 24 Note 14 - Risk Adjustment 25

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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 38

Controls and Procedures

Item 4. Controls and Procedures 38

- OTHER INFORMATION

PART II - OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 39

Risk Factors

Item 1A. Risk Factors 39

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 44

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 44

Other Information

Item 5. Other Information 44

Exhibits

Item 6. Exhibits 45

SIGNATURES

SIGNATURES 46 Table of Contents This Quarterly Report on Form 10-Q for the period ended September 30, 2025 ("Quarterly Report on Form 10-Q") contains the following defined terms, unless context otherwise requires: (i) "Oscar," "the Company," "we," "our," "us" or like terms refer to Oscar Health, Inc. and its subsidiaries, (ii) "Thrive Capital" refers to Thrive Capital Management, LLC, a Delaware limited liability company, and the investment funds affiliated with or advised by Thrive Capital Management, LLC and (iii) "Thrive General Partners" refers to Thrive Partners II GP, LLC, Thrive Partners III GP, LLC, Thrive Partners V GP, LLC, Thrive Partners VI GP, LLC, Thrive Partners VII GP, LLC, and Thrive Partners VII Growth GP, LLC, each of which is a general partner of a Thrive Capital-affiliated fund.

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "forecasts," "predicts," "potential" or "continues" or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements regarding our future results of operations and financial position, risk adjustment transfer payments, industry, regulatory and business trends, our commercial arrangements, business strategy, plans and plan mix, membership and market growth, and our objectives for future operations. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important 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, including, but not limited to, the following: Our ability to execute our strategy and manage our grow

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Oscar Health, Inc. Condensed Consolidated Statements of Operations (unaudited) Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share amounts) 2025 2024 2025 2024 Revenue Premium $ 2,923,968 $ 2,368,257 $ 8,723,233 $ 6,626,055 Investment income 53,215 50,326 153,331 143,309 Other revenues 8,801 4,899 19,628 15,764 Total revenue 2,985,984 2,423,482 8,896,192 6,785,128 Operating Expenses Medical 2,586,330 2,003,979 7,398,954 5,267,475 Selling, general, and administrative 521,592 460,377 1,538,836 1,289,745 Depreciation and amortization 7,312 7,500 21,012 22,912 Total operating expenses 3,115,234 2,471,856 8,958,802 6,580,132 Earnings (loss) from operations ( 129,250 ) ( 48,374 ) ( 62,610 ) 204,996 Interest expense 6,857 5,815 18,698 17,708 Other expenses (income) 3,184 ( 1,877 ) 3,308 173 Earnings (loss) before income taxes ( 139,291 ) ( 52,312 ) ( 84,616 ) 187,115 Income tax expense (benefit) ( 1,807 ) 2,076 5,853 7,709 Net income (loss) ( 137,484 ) ( 54,388 ) ( 90,469 ) 179,406 Less: Net income (loss) attributable to noncontrolling interests ( 34 ) 208 71 427 Net income (loss) attributable to Oscar Health, Inc. $ ( 137,450 ) $ ( 54,596 ) $ ( 90,540 ) $ 178,979 Earnings (Loss) per Share Basic $ ( 0.53 ) $ ( 0.22 ) $ ( 0.35 ) $ 0.75 Diluted $ ( 0.53 ) $ ( 0.22 ) $ ( 0.35 ) $ 0.65 Weighted Average Common Shares Outstanding Basic 259,273 243,106 255,419 237,759 Diluted 259,273 243,106 255,419 301,459 See the accompanying Notes to Condensed Consolidated Financial Statements 5 Table of Contents Oscar Health, Inc. Condensed Consolidated Statements of Comprehensive Income (unaudited) Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2025 2024 2025 2024 Net income (loss) $ ( 137,484 ) $ ( 54,388 ) $ ( 90,469 ) $ 179,406 Other comprehensive income (loss), net of tax: Net unrealized gains on securities available fo

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