OSCR — Oscar Health, Inc.

OSCR Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

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

2. Strategic Updates and Business Highlights:

• Oscar Health is focusing on profitable growth through disciplined pricing and innovative product offerings, including new lifestyle products like Hello Menno and Hive Health.
• The company expanded broker partnerships by 60% and increased market share from 17% to 30%.
• AI initiatives have improved operational efficiency, reducing administrative costs and enhancing member experience.
• 2026 open enrollment was a record, with 3.4 million members enrolled as of February 1, 2026.

3. Forward Guidance and Outlook:

• 2026 Revenue Guidance: Expected to be between $18.7 billion and $19 billion, a 61% increase year-over-year at the midpoint.
• Projected MLR for 2026: Expected to improve to between 82.4% and 83.4%.
• Earnings from Operations: Projected to be between $250 million and $450 million, indicating a significant improvement of nearly $750 million year-over-year.
• The company anticipates a return to profitability in 2026, driven by growth, improved margins, and operational efficiencies.

4. Bad News, Challenges, or Points of Concern:

• The company faced a net loss of $443 million in 2025 primarily due to higher market morbidity and risk adjustment payables.
• The MLR is expected to remain elevated in 2026 due to ongoing market challenges and the expiration of enhanced premium tax credits, leading to potential membership churn.
• Concerns about the impact of higher premiums on member retention, particularly among passively enrolled members who may drop coverage due to increased out-of-pocket costs.
• The overall market membership is projected to decline by 20% to 30% as higher premiums take effect.

5. Notable Q&A Insights:

• Management expressed confidence in their ability to project membership behavior and MLR due to enhanced data analytics and third-party insights.
• There are uncertainties regarding how many members will maintain coverage after experiencing increased out-of-pocket costs, particularly those transitioning from $0 plans.
• The company is actively working on improving risk adjustment transparency and is optimistic about industry collaborations to enhance forecasting accuracy.
• Discussions highlighted the potential for ICRA and lifestyle products to drive future growth, with management noting the importance of member experience and retention strategies.