Projects $170 Million EBITDA Improvement and Path to Profitability in 2026
P3 Health Partners a physician-led and patient-centered population health management organization, has released its financial results for the fourth quarter and full year ending December 31, 2025, while also outlining its financial outlook and strategic priorities for 2026. The announcement reflects a transitional year for the company, marked by operational restructuring, improved financial discipline, and a forward-looking plan aimed at achieving profitability.
Strategic Progress and Leadership Perspective
According to CEO Aric Coffman, 2025 represented a pivotal year for P3 Health as the company undertook meaningful steps to reposition its business model. The organization focused on strengthening contract economics, aligning providers more effectively, and establishing a more disciplined operating structure. These efforts are expected to yield tangible results in 2026, with management projecting a clear trajectory toward profitability.
Coffman emphasized that the company anticipates approximately $170 million in year-over-year EBITDA improvement at the midpoint of its 2026 guidance range. This projected turnaround is supported by strategic initiatives such as expanding into new Medicare Advantage geographies and implementing a measured approach to risk-based care. The company believes this deliberate “glidepath” toward full-risk arrangements will enhance long-term earnings potential and create a more sustainable business model.
Fourth Quarter 2025 Financial Performance
For the fourth quarter of 2025, P3 Health reported mixed financial results, reflecting both progress in certain operational metrics and ongoing financial challenges.
At-risk membership stood at approximately 115,000, representing a decline of about 9% compared to the same quarter in the prior year. This decrease was largely intentional, as the company refined its network and aligned its provider base more strategically.
Total revenue for the quarter reached $384.8 million, an increase from $370.7 million in the fourth quarter of 2024. This growth was driven in part by improved capitated revenue per member per month (PMPM), which rose 9% year-over-year to $1,060.
Despite revenue growth, the company experienced a negative medical margin of $28.7 million, or negative $83 PMPM. This represents a significant decline compared to the prior year’s positive medical margin of $7.3 million, or $19 PMPM. The deterioration in medical margin highlights ongoing cost pressures and utilization trends that continue to impact profitability.
Net loss for the quarter widened to $165.7 million, compared to $129.1 million in the same period the previous year. Similarly, adjusted EBITDA loss increased to $76.1 million, up from $67.6 million in the fourth quarter of 2024. These figures underscore the financial headwinds the company faced during the quarter, even as it implemented structural improvements.
Full-Year 2025 Financial Results
For the full year 2025, P3 Health reported total revenue of $1.46 billion, slightly down from $1.50 billion in 2024. The modest decline reflects the company’s strategic decision to reduce at-risk membership and focus on higher-quality, more aligned contracts.
At-risk membership averaged approximately 116,000 for the year, down 8% from around 126,000 in 2024. This reduction was driven by deliberate network alignment efforts aimed at improving long-term performance and profitability.
Capitated revenue PMPM increased by 5% year-over-year to $1,026, indicating improved revenue quality despite the lower membership base.
Medical margin for the year was $23.5 million, or $17 PMPM. On a normalized basis, which adjusts for certain one-time or non-recurring items, medical margin improved to $53.4 million, or $38 PMPM. This compares favorably to $51.5 million, or $34 PMPM, in 2024, demonstrating incremental improvement in core operational performance.
Net loss for the full year totaled $323.1 million, compared to $310.4 million in the prior year, reflecting ongoing investments and operational challenges.
Adjusted EBITDA loss improved to $161.3 million from $167.2 million in 2024. On a normalized basis, adjusted EBITDA loss was $149.1 million, a significant improvement from $193.0 million in the previous year. This represents a $43.9 million year-over-year improvement, highlighting the early impact of the company’s restructuring efforts.
2026 Financial Guidance and Outlook
Looking ahead, P3 Health has provided detailed guidance for the full year 2026, signaling a strong anticipated turnaround in financial performance.
The company expects adjusted EBITDA to range from a loss of $20 million to a positive $40 million, with a midpoint of $10 million. This midpoint represents a substantial $170 million improvement compared to 2025, underscoring management’s confidence in its strategic initiatives.
At-risk membership is projected to range between 107,000 and 117,000 members, reflecting continued discipline in network optimization and growth strategy.
Total revenue for 2026 is expected to fall between $1.5 billion and $1.7 billion, indicating a return to growth following the slight decline in 2025.
Medical margin is forecasted to be in the range of $160 million to $200 million, with PMPM values between $120 and $150. These projections suggest significant improvement in cost management and care delivery efficiency.
While the company has provided guidance for non-GAAP metrics such as adjusted EBITDA and medical margin, it noted that it is unable to offer a quantitative reconciliation to the most directly comparable GAAP measures, such as net income or gross profit. This limitation is due to uncertainties surrounding certain factors that could impact these metrics and are not within the company’s control.
Operational Strategy and Growth Focus
P3 Health’s strategy for 2026 centers on disciplined growth, operational efficiency, and a continued shift toward value-based care models. The expansion into new Medicare Advantage markets is expected to play a key role in driving revenue and improving margins.
The company’s approach emphasizes a gradual transition to full-risk arrangements, allowing it to manage costs more effectively while improving patient outcomes. By aligning incentives with providers and leveraging data-driven care models, P3 aims to enhance both clinical and financial performance.
Additionally, the company’s focus on strengthening provider relationships and optimizing its network is expected to contribute to improved care coordination and cost control.
Conference Call and Webcast Details
P3 Health management hosted a conference call and webcast on March 26, 2026, at 4:30 PM Eastern Time to discuss the financial results and outlook in greater detail. During the call, executives provided additional insights into the company’s performance, strategic initiatives, and expectations for the coming year.
Investors and interested parties were able to access the webcast through the “Events & Presentations” section of the company’s investor relations website. An archived version of the webcast will remain available for 90 days following the event.
Forward-Looking Considerations
The company cautioned that its 2026 outlook represents management’s current estimates and is subject to change based on various factors. These may include market conditions, regulatory developments, healthcare utilization trends, and other uncertainties that could materially impact financial results.
P3 Health emphasized that it does not assume any obligation to update forward-looking statements, except as required by law. Investors are encouraged to review the company’s cautionary disclosures regarding forward-looking statements for a comprehensive understanding of potential risks.
Conclusion
P3 Health Partners enters 2026 with a renewed focus on profitability, operational discipline, and strategic growth. While 2025 presented financial challenges, the company made significant progress in restructuring its business and improving key performance metrics.
With a projected $170 million improvement in adjusted EBITDA and a clear path toward positive earnings, P3 Health is positioning itself for a transformative year. Its emphasis on value-based care, provider alignment, and measured expansion into Medicare Advantage markets reflects a long-term vision aimed at sustainable growth and improved patient outcomes.
As the healthcare landscape continues to evolve, P3 Health’s ability to execute on its strategy will be critical in determining its success in achieving profitability and delivering value to both patients and investors.
About P3 Health Partners (NASDAQ: PIII):
P3 Health Partners Inc. is a leading population health management company committed to transforming healthcare by improving the lives of both patients and providers. Founded and led by physicians, P3 has an expansive network of more than 2,400 affiliated primary care providers across the country. Our local teams of health care professionals manage the care of thousands of patients in 23 counties across four states. P3 supports primary care providers with value-based care coordination and administrative services that improve patient outcomes and lower costs. Through partnerships with these local providers, the P3 care team creates an enhanced patient experience by navigating, coordinating, and integrating the patient’s care within the healthcare system
