OSCR — Oscar Health, Inc.

Earnings Call Summary for Oscar Health (Q4 2025)

1. Key Financial Results and Metrics

• Total Revenue: $11.7 billion for 2025, a 28% increase year-over-year.
• Membership: Approximately 2 million members at year-end, up 22% year-over-year; expected to start Q2 2026 with around 3 million paid members.
• Medical Loss Ratio (MLR): Increased to 87.4% for the year, up 570 basis points year-over-year; Q4 MLR at 95.4%, up 730 basis points.
• Loss from Operations: $396 million for 2025, a decline of $454 million year-over-year.
• SG&A Expense Ratio: Improved to 17.5%, down 160 basis points year-over-year.
• Adjusted EBITDA Loss: Approximately $280 million for the year.

2. Strategic Updates and Business Highlights

• Market Positioning: Oscar has adapted to increased market morbidity and competitive pressures by implementing disciplined pricing and expanding product offerings.
• Membership Growth: Achieved record open enrollment with 3.4 million members as of February 1, 2026, reflecting a 58% year-over-year increase.
• Product Innovations: Launched new lifestyle products, including plans targeting menopause and diabetes, which have shown higher retention rates and member satisfaction.
• AI Integration: Enhanced operational efficiency through AI, reducing administrative costs and improving member interactions.

3. Forward Guidance and Outlook

• 2026 Revenue Projection: Expected to be between $18.7 billion and $19 billion, a 61% increase year-over-year at the midpoint.
• Earnings from Operations: Forecasted between $250 million and $450 million, indicating a significant improvement of nearly $750 million year-over-year.
• MLR Guidance: Expected to improve to between 82.4% and 83.4%.
• SG&A Expense Ratio: Anticipated to further improve to between 15.8% and 16.3%.

4. Bad News, Challenges, or Points of Concern

• Higher Market Morbidity: The increase in MLR and loss from operations was primarily due to higher market morbidity and risk adjustment payables.
• Potential Membership Churn: Anticipated churn from passively enrolled members facing higher premiums post-enhanced premium tax credits expiration could lead to a decline in membership.
• Risk Adjustment Uncertainty: Difficulty in accurately forecasting risk adjustment due to market volatility and changes in member demographics.
• Competitive Pressures: Other carriers may also struggle with similar challenges, leading to potential pricing inadequacies across the market.

5. Notable Q&A Insights

• Membership Projections: Management expressed confidence in their ability to project membership behavior based on historical data and third-party clinical information.
• Risk Adjustment Discussion: The conversation highlighted the complexities of risk adjustment, with management indicating that increased market share could lead to more stability in risk accruals.
• Utilization Trends: Utilization in Q4 was higher than expected, attributed to members seeking care before losing subsidies; management does not foresee significant carryover effects into 2026.
• Broker Engagement: A significant portion of membership (90-95%) is broker-driven, with brokers playing a crucial role in guiding members through plan transitions.

Overall, Oscar Health is positioned for growth in 2026, with strategic initiatives aimed at improving profitability and member experience, despite facing challenges related to market dynamics and risk management.