agilon health, inc. [AGL] Filings

10-Q 1 agl-20220630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-40332

agilon health, inc.

(Exact name of registrant as specified in its charter)

Delaware

37-1915147

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

6210 E Hwy 290, Suite 450

Austin, TX 78723

(Address of principal executive offices)

(562) 256-3800

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	AGL	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	☐	Accelerated Filer	☐

Non-accelerated Filer	☒	Smaller Reporting Company	☐

		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) YES ☐ NO ☒

At July 29, 2022, there were 410,936,377 shares of the registrant’s $0.01 par value common stock outstanding.

agilon health, inc.

INDEX



PART I. FINANCIAL INFORMATION

Item 1.	Unaudited Financial Statements:

	Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	3

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2022 and 2021	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2022 and 2021	5

	Condensed Consolidated Statements of Contingently Redeemable Common Stock and Stockholders’ Equity (Deficit) for the Three and Six Months Ended June 30, 2022 and 2021	6

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	8

	Notes to the Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35

Item 4.	Controls and Procedures	35

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	36

Item 1A.	Risk Factors	36

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

Item 6.	Exhibits	37

Signatures		38

agilon health, inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)


	June 30, 2022			December 31, 2021
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	668,574		$	1,040,039
Restricted cash and equivalents		15,085			14,781
Marketable securities		285,590			—
Receivables, net		607,632			293,407
Prepaid expenses and other current assets, net		24,528			18,968
Total current assets		1,601,409			1,367,195
Property and equipment, net		15,808			9,161
Intangible assets, net		62,505			55,398
Goodwill		41,540			41,540
Other assets, net		119,260			112,958
Total assets	$	1,840,522		$	1,586,252
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Medical claims and related payables	$	458,038		$	239,014
Accounts payable and accrued expenses		142,048			112,946
Current portion of long-term debt		5,000			5,000
Total current liabilities		605,086			356,960
Long-term debt, net of current portion		40,943			43,401
Other liabilities		91,122			94,295
Total liabilities		737,151			494,656

Commitments and contingencies

Stockholders' equity (deficit):
Common stock, $0.01 par value: 2,000,000 shares authorized; 408,204 and 400,095 shares issued and outstanding, respectively		4,082			4,001
Additional paid-in capital		2,076,329			2,045,572
Accumulated deficit		(977,096	)		(957,677	)
Accumulated other comprehensive income (loss)		513			—
Total agilon health, inc. stockholders' equity (deficit)		1,103,828			1,091,896
Noncontrolling interests		(457	)		(300	)
Total stockholders’ equity (deficit)		1,103,371			1,091,596
Total liabilities and stockholders’ equity (deficit)	$	1,840,522		$	1,586,252

The condensed consolidated balance sheets include assets and liabilities of consolidated variable interest entities (“VIEs”) as agilon health, inc., together with its consolidated subsidiaries and variable interest entities (the “Company”), is the primary beneficiary of these VIEs. The condensed consolidated balance sheets include total assets that can only be used to settle obligations of the Company’s consolidated VIEs totaling $748.3 million and $420.5 million as of June 30, 2022 and December 31, 2021, respectively, and total liabilities of the Company’s consolidated VIEs for which creditors do not have recourse to the general credit of the primary beneficiary of $539.9 million and $282.0 million as of June 30, 2022 and December 31, 2021, respectively. See Note 13 for additional details.

See accompanying Notes to the Condensed Consolidated Financial Statements.

agilon health, inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Revenues:
Medical services revenue	$	669,184		$	497,678		$	1,321,607		$	910,090
Other operating revenue		950			1,278			1,972			1,970
Total revenues		670,134			498,956			1,323,579			912,060
Expenses:
Medical services expense		587,140			442,483			1,153,348			802,837
Other medical expenses		49,080			33,694			93,853			57,355
General and administrative (including noncash stock-based compensation expense of $6,553, $274,548, $10,523, and $276,020, respectively)		51,924			317,561			91,758			355,338
Depreciation and amortization		3,042			3,581			6,415			7,008
Total expenses		691,186			797,319			1,345,374			1,222,538
Income (loss) from operations		(21,052	)		(298,363	)		(21,795	)		(310,478	)
Other income (expense):
Other income (expense), net		6,997			2,967			9,266			4,303
Gain (loss) on lease terminations		(5,458	)		—			(5,458	)		—
Interest expense		(945	)		(1,498	)		(1,816	)		(4,439	)
Income (loss) before income taxes		(20,458	)		(296,894	)		(19,803	)		(310,614	)
Income tax benefit (expense)		(580	)		(435	)		(509	)		(451	)
Income (loss) from continuing operations		(21,038	)		(297,329	)		(20,312	)		(311,065	)
Discontinued operations:
Income (loss) before income taxes		321			(1,547	)		750			(2,898	)
Income tax benefit (expense)		(14	)		(65	)		(14	)		(129	)
Total discontinued operations		307			(1,612	)		736			(3,027	)
Net income (loss)		(20,731	)		(298,941	)		(19,576	)		(314,092	)
Noncontrolling interests’ share in (earnings) loss		82			96			157			169
Net income (loss) attributable to common shares	$	(20,649	)	$	(298,845	)	$	(19,419	)	$	(313,923	)

Net income (loss) per common share, basic and diluted
Continuing operations	$	(0.05	)	$	(0.79	)	$	(0.05	)	$	(0.88	)
Discontinued operations	$	—		$	—		$	—		$	(0.01	)
Weighted average shares outstanding, basic and diluted		407,339			377,445			404,666			351,695

See accompanying Notes to the Condensed Consolidated Financial Statements.

agilon health, inc.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net income (loss)	$	(20,731	)	$	(298,941	)	$	(19,576	)	$	(314,092	)
Other comprehensive income (loss):
Net unrealized gain (loss) on marketable securities, net of tax		513			—			513			—
Total comprehensive income (loss)		(20,218	)		(298,941	)		(19,063	)		(314,092	)
Comprehensive (income) loss attributable to noncontrolling interests		82			96			157			169
Total comprehensive income (loss) attributable to agilon health, inc.	$	(20,136	)	$	(298,845	)	$	(18,906	)	$	(313,923	)

See accompanying Notes to the Condensed Consolidated Financial Statements.

agilon health, inc.

CONDENSED CONSOLIDATED STATEMENTS OF CONTINGENTLY REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

(unaudited)

For the three months ended June 30, 2022:


	Total Stockholders’ Equity
	Common Stock					Additional Paid-In			Accumulated			Accumulated Other Comprehensive		Noncontrolling			Total Stockholders’ Equity
	Shares			Amount		Capital			Deficit			Income (loss)		Interest			(Deficit)
April 1, 2022		405,727		$	4,057	$	2,064,242		$	(956,447	)	$	—	$	(375	)	$	1,111,477
Net income (loss)		—			—		—			(20,649	)		—		(82	)		(20,731	)
Other comprehensive income (loss)		—			—		—			—			513		—			513
Exercise of stock options		2,370			24		6,293			—			—		—			6,317
Vesting of restricted stock units		140			1		(1	)		—			—		—			—
Shares withheld related to net share settlement		(33	)		—		(758	)		—			—		—			(758	)
Stock-based compensation expense		—			—		6,553			—			—		—			6,553
June 30, 2022		408,204		$	4,082	$	2,076,329		$	(977,096	)	$	513	$	(457	)	$	1,103,371

For the six months ended June 30, 2022:


	Total Stockholders’ Equity
	Common Stock					Additional Paid-In			Accumulated			Accumulated Other Comprehensive		Noncontrolling			Total Stockholders’ Equity
	Shares			Amount		Capital			Deficit			Income (loss)		Interest			(Deficit)
January 1, 2022		400,095		$	4,001	$	2,045,572		$	(957,677	)	$	—	$	(300	)	$	1,091,596
Net income (loss)		—			—		—			(19,419	)		—		(157	)		(19,576	)
Other comprehensive income (loss)		—			—		—			—			513		—			513
Exercise of stock options		8,002			80		20,993			—			—		—			21,073
Vesting of restricted stock units		140			1		(1	)		—			—		—			—
Shares withheld related to net share settlement		(33	)		—		(758	)		—			—		—			(758	)
Stock-based compensation expense		—			—		10,523			—			—		—			10,523
June 30, 2022		408,204		$	4,082	$	2,076,329		$	(977,096	)	$	513	$	(457	)	$	1,103,371

agilon health, inc.

CONDENSED CONSOLIDATED STATEMENTS OF CONTINGENTLY REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

(unaudited)

For the three months ended June 30, 2021:


	Contingently Redeemable Common Stock						Total Stockholders’ Equity
							Common Stock				Additional Paid-In		Accumulated			Noncontrolling			Total Stockholders’ Equity
	Shares			Amount			Shares		Amount		Capital		Deficit			Interests			(Deficit)
April 1, 2021		76,201		$	309,500			249,474	$	2,494	$	265,603	$	(566,268	)	$	(73	)	$	(298,244	)
Net income (loss)		—			—			—		—		—		(298,845	)		(96	)		(298,941	)
Reclassification of contingently redeemable common stock in connection with initial public offering ("IPO")		(76,201	)		(309,500	)		76,201		762		308,738		—			—			309,500
Issuance of common stock in connection with IPO, net of offering costs

agilon health, inc. [AGL] Filings
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-03-03]
10-Q	[2021-10-28]
S-1	[2021-08-30]
10-Q	[2021-08-04]
10-Q	[2021-05-26]
S-1	[2021-03-18]