P3 Health Partners Reports Strong Second-Quarter 2026 Results, Raises Full-Year Adjusted EBITDA Outlook
P3 Health Partners, a patient-centered and physician-led population health management company, has reported financial results for the second quarter ended June 30, 2026, highlighting substantial improvements in profitability, stronger network economics and continued progress in its operating model.
The company generated $54.4 million in adjusted EBITDA during the quarter, compared with an adjusted EBITDA loss of $17.1 million in the second quarter of 2025. The significant year-over-year improvement reflects what management described as structural changes across P3’s contracts, physician network and operating model.
The company also reported $386 million in total revenue, representing a 9% increase from the same period a year earlier. At the same time, P3 continued to streamline its membership base as part of previously disclosed network and payer rationalization initiatives.
P3’s second-quarter performance marks an important point in its ongoing transformation. Management said the results demonstrate that the business is increasingly executing according to its strategic plan, providing the company with confidence to raise its full-year 2026 adjusted EBITDA outlook.
Strong Improvement in Adjusted EBITDA
P3 reported adjusted EBITDA of $54.4 million for the second quarter of 2026, equivalent to $173 per-member-per-month.
That compares with an adjusted EBITDA loss of $17.1 million, or negative $49 per-member-per-month, in the second quarter of 2025.
The improvement represents a significant shift in the company’s profitability profile.
P3 CEO Dr. Aric Coffman said the second-quarter results demonstrate that the company’s business is now executing according to its strategic plan.
According to Coffman, the core business delivered improved profitability quarter over quarter, reflecting structural improvements that have become embedded across P3’s contracts, network and operating model.
The company believes these improvements provide a stronger foundation for the second half of 2026 and support its decision to increase its full-year adjusted EBITDA outlook.
Revenue Increases 9%
P3 generated $386 million in total revenue during the second quarter, an increase of 9% compared with the prior-year quarter.
The revenue growth occurred despite a reduction in at-risk membership, demonstrating the impact of improved economics within the company’s existing business.
A particularly important component of the performance was growth in per-member capitated revenue, which increased by 15% year over year.
The increase was driven by several factors, including improved network economics, rate progression and burden-of-illness performance.
For a population health management company, per-member economics are an important measure because they indicate the revenue generated relative to the number of members served.
P3’s ability to increase per-member capitated revenue while reducing membership demonstrates the company’s focus on improving the quality and economics of its contracts rather than simply pursuing membership growth.
Membership Declines as P3 Rationalizes Its Network
P3 reported approximately 105,000 at-risk members during the second quarter, representing a 10% decrease from the prior-year period.
The decline reflects previously announced decisions to rationalize the company’s network and payer relationships.
While a reduction in membership can typically create pressure on revenue, P3’s second-quarter results show that improved per-member economics helped offset the impact.
The company’s strategy appears focused on building a more sustainable membership portfolio by concentrating resources on contracts and relationships that provide stronger long-term economics.
In addition to its at-risk membership, P3 reported approximately 133,000 total lives under management during the quarter.
Of those, approximately 28,000 lives were managed through management service arrangements.
The distinction between at-risk membership and total lives under management is important because P3 operates through multiple population health arrangements. At-risk models generally place greater responsibility for healthcare costs and outcomes on the organization, while management service arrangements can provide healthcare management capabilities under different contractual structures.
Medical Margin Reaches $97.8 Million
P3 reported medical margin of $97.8 million during the second quarter.
On a per-member-per-month basis, medical margin was $311.
The company’s medical margin performance included favorable impacts from payer settlements and prior-year development recognized during the quarter.
These items had a meaningful effect on reported medical margin.
Excluding the impact of payer settlements and prior-year development, P3’s medical margin was $52.9 million, equivalent to $168 per-member-per-month.
The underlying medical margin provides additional insight into the company’s operating performance because it excludes the impact of these favorable items.
The adjusted figure still represents a meaningful improvement in the company’s underlying economics and supports management’s view that structural changes are improving the core business.
Net Income Swings to Profit
P3 reported net income of $15.7 million for the second quarter of 2026.
That compares with a net loss of $43.7 million in the second quarter of 2025.
The shift from a substantial quarterly loss to profitability represents one of the most significant aspects of P3’s latest financial performance.
The improvement reflects stronger operating results, including the substantial increase in adjusted EBITDA.
The company’s improved profitability also suggests that its efforts to optimize contracts, strengthen network economics and improve operating efficiency are beginning to translate into bottom-line results.
Structural Improvements Across the Business
Management attributed the quarter’s performance to structural improvements across several areas of the company.
These include its contractual arrangements, physician network and operating model.
The changes are intended to create a more sustainable business structure that can generate improved financial performance while continuing to support patient-centered healthcare delivery.
For P3, population health management involves coordinating care for patient populations while working with physicians, payers and healthcare providers to improve outcomes and manage costs.
The effectiveness of this model depends heavily on the quality of the underlying contracts and the ability of the organization to coordinate healthcare services efficiently.
By rationalizing less attractive relationships and strengthening the economics of its remaining business, P3 is seeking to establish a more predictable financial foundation.
Focus on Network Economics
Improving network economics is a central component of P3’s current strategy.
The company’s second-quarter results indicate that it is generating more revenue per member while operating with a smaller at-risk membership base.
The 15% increase in per-member capitated revenue suggests that contract economics have improved significantly compared with the prior year.
Rate progression also contributed to the increase, while burden-of-illness performance provided another favorable factor.
These improvements can be particularly important for population health organizations because medical costs and patient acuity can vary considerably between different populations.
Effective risk management requires healthcare organizations to understand patient needs, coordinate appropriate services and structure contracts that reflect the populations being served.
Patient-Centered Population Health Model
Despite the company’s emphasis on financial performance, P3 continues to position itself as a patient-centered and physician-led population health management organization.
Its model is designed around collaboration with physicians and healthcare providers to coordinate care for patients.
Population health management seeks to move healthcare beyond episodic treatment toward a more coordinated approach in which providers can identify patient needs, manage chronic conditions and reduce avoidable healthcare utilization.
For P3, stronger financial performance can provide additional capacity to support these activities.
Improved profitability may allow the organization to continue investing in physician relationships, care coordination capabilities and technology while maintaining a disciplined approach to its contract portfolio.
Confidence in the Second Half of 2026
Following the second-quarter results, P3 is entering the second half of the year with increased confidence in its financial trajectory.
Coffman said the strength of the company’s core business gives management confidence to raise its full-year 2026 adjusted EBITDA outlook.
The decision to increase guidance reflects management’s view that the improvements achieved during the first half of the year are sustainable and increasingly embedded within the business.
Rather than relying solely on temporary financial benefits, the company is pointing to improvements in its contracts, network and operating model as the foundation for stronger performance.
That distinction is important for investors and other stakeholders evaluating P3’s longer-term financial outlook.
Balancing Membership and Profitability
One of the most notable aspects of P3’s second-quarter results is the relationship between membership and profitability.
At-risk membership declined by 10% year over year, yet revenue increased by 9% and adjusted EBITDA improved dramatically.
This suggests that the company’s current strategy is not centered primarily on maximizing membership numbers.
Instead, P3 appears to be prioritizing the quality and economics of its membership base.
Removing or restructuring less attractive payer and network relationships can reduce membership in the short term but potentially improve the profitability and sustainability of the remaining portfolio.
The second-quarter results provide evidence that this approach is producing measurable financial benefits.
Improving Operational Discipline
P3’s results also reflect an increased emphasis on operational discipline.
Population health companies operate in a complex environment in which medical costs, reimbursement rates, patient acuity and payer relationships can all influence financial results.
Managing these variables requires strong operational controls and effective coordination across the healthcare network.
P3’s improved adjusted EBITDA suggests that the company has made progress in aligning its operating structure with the economics of its business.
The company is now seeking to build on this progress during the remainder of 2026.
Outlook for P3 Health Partners
P3 Health Partners enters the second half of 2026 with a significantly improved financial profile compared with the same period last year.
Revenue increased 9% to $386 million, while per-member capitated revenue rose 15%. Medical margin reached $97.8 million, although the company noted that favorable payer settlements and prior-year development contributed to the reported figure.
Even excluding those items, medical margin remained positive at $52.9 million.
The company’s most significant improvement came from adjusted EBITDA, which increased from a loss of $17.1 million in the second quarter of 2025 to $54.4 million in the latest quarter.
Net income also improved dramatically, moving from a $43.7 million loss to $15.7 million in profit.
These results provide a stronger foundation for P3’s ongoing transformation.
Strategic Priorities Going Forward
As P3 moves into the second half of 2026, management’s focus will remain on executing its strategic plan and maintaining the operational improvements achieved during the first half.
Key priorities include continuing to improve contract economics, strengthening the physician network, managing medical costs and maintaining disciplined operational execution.
The company will also need to balance these priorities with its broader objective of delivering patient-centered population health services.
The reduction in at-risk membership demonstrates that P3 is willing to make strategic changes to its network and payer portfolio when necessary.
At the same time, higher per-member revenue and improved profitability suggest that these changes are contributing to stronger economics.
A Stronger Foundation for Future Growth
P3 Health Partners’ second-quarter 2026 results represent a significant improvement from the company’s performance one year earlier.
The company has demonstrated that it can generate higher revenue and substantially stronger profitability despite operating with a smaller at-risk membership base.
The combination of improved network economics, rate progression, burden-of-illness performance and operational discipline contributed to the quarter’s results.
Most importantly, the sharp improvement in adjusted EBITDA suggests that P3’s efforts to restructure its business are beginning to produce tangible financial benefits.
With management raising its full-year adjusted EBITDA outlook, the company is signaling confidence that these improvements can continue.
As P3 enters the second half of 2026, the focus will shift from implementing structural changes to consistently executing the model across its contracts, network and operations. If the company can maintain its improved medical economics and profitability while continuing to serve patients through its physician-led population health model, the second-quarter performance could represent an important milestone in its broader transformation.
For now, P3’s latest results show a company that has made meaningful progress in moving from financial pressure toward improved profitability, stronger contract economics and a more disciplined operating model.
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