OSCR — Oscar Health, Inc.

Earnings Call Summary for Oscar Health (OSCR) - Q1 2026

1. Key Financial Results and Metrics:

• Revenue: $4.6 billion, up 53% year-over-year.
• Net Income: Approximately $679 million, or $2.07 per diluted share, marking the highest in company history.
• Earnings from Operations: $704 million, a 2.5x increase year-over-year.
• Medical Loss Ratio (MLR): Improved by 490 basis points to 70.5%, driven by disciplined pricing and favorable prior period reserve development.
• SG&A Expense Ratio: Decreased to 15.2%, a 60 basis point improvement year-over-year.
• Adjusted EBITDA: $727 million, up approximately $398 million year-over-year.
• Membership: Ended the quarter with 3.2 million members, a 56% increase year-over-year.

2. Strategic Updates and Business Highlights:

• Oscar Health continues to position itself as a leader in the individual market, emphasizing a tech-first approach and AI integration to enhance member services and operational efficiency.
• Launched several new tools, including a real-time drug pricing feature and bilingual voice agents for care navigation.
• The company is advancing the Individual Coverage Health Reimbursement Arrangement (ICHRA) initiative and has introduced the Lucie Health Marketplace, a carrier-agnostic platform aimed at enhancing consumer choice and flexibility in health coverage.
• Oscar's strategic focus includes working with policymakers to improve market transparency and product choice.

3. Forward Guidance and Outlook:

• Oscar reaffirmed its full-year 2026 guidance, expecting total revenues between $18.7 billion and $19 billion.
• MLR is projected to range between 82.4% and 83.4%, with SG&A expense ratio guidance unchanged at 15.8% to 16.3%.
• Earnings from operations are expected to be between $250 million and $450 million, with adjusted EBITDA anticipated to exceed earnings from operations by approximately $115 million.

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

• The company noted a decline in membership from 3.4 million to 3.2 million, attributed mainly to members who did not make payments.
• Risk adjustment transfer as a percentage of premium is currently tracking around 24%, higher than the expected 20%, raising concerns about future profitability as claims normalize.
• Competitive pressures were highlighted, particularly with the exit of larger competitors from the market, which could impact membership dynamics and risk adjustment going forward.

5. Notable Q&A Insights:

• Management clarified that the drop in membership primarily involved individuals who did not utilize their coverage and did not make payments.
• There was optimism regarding market morbidity trends, with indications that they may be favorable compared to initial expectations.
• The Q&A revealed that while SG&A expenses are expected to rise slightly due to increased membership, the company maintains a strong outlook on operational efficiency and growth.
• The Lucie Health Marketplace is anticipated to provide a high-margin growth opportunity, although its financial impact in 2026 is expected to be modest.

Overall, Oscar Health demonstrated strong financial performance in Q1 2026, with significant growth in revenue and membership, while also navigating challenges related to risk adjustment and competitive dynamics in the market.