Summary of Starling Oncology Q2 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $161.3 million, a 34.6% increase year-over-year (from $119.8 million).

Adjusted EBITDA: Positive $0.2 million, an improvement from a loss of $4.1 million in Q2 2025.

Gross Profit: $27.2 million, up from $17.5 million, with a gross margin of 16.8% (compared to 14.6% a year ago).

Patient Services Revenue: $58.8 million, accounting for 36.5% of total revenue, a 5.3% increase year-over-year.

Specialty Pharmacy Revenue: $98.6 million, representing 61.1% of total revenue, with a 57.6% year-over-year growth.

Medical Loss Ratio (MLR): 85.5%, up from 71% a year ago.

Cash Position: $41.1 million in cash and cash equivalents, up from $33.6 million at year-end 2025.

Free Cash Flow: Approximately $12.5 million for Q2, with year-to-date free cash flow at $9.5 million.

2Strategic Updates and Business Highlights

Rebranding: The company rebranded to Starling Oncology to better reflect its focus on value-based oncology care.

Provider Portal Launch: The new provider portal, Starling Nexus, is set to launch in mid-August, aimed at improving care coordination and data collection.

Contract Expansion: Anticipated addition of three new capitated contracts in Q4, expanding into Nevada and Oregon, adding approximately 80,000 lives and $50 million in annualized revenue.

California Exclusivity: Achieved exclusivity with a major partner, adding approximately 230,000 capitated lives and an estimated $6 million in annualized revenue.

3Forward Guidance and Outlook

2026 Revenue Guidance: Raised to $650 million to $670 million, including $150 million from capitated revenue.

Adjusted EBITDA Guidance: Narrowed to a range of $2 million to $7 million.

Capitated Revenue Growth: Expected to double in 2027 to approximately $300 million.

Q3 Expectations: Anticipated adjusted EBITDA to be positive but muted, ranging from $500,000 to $1.5 million due to onboarding new members.

4Bad News, Challenges, or Points of Concern

Declining Patient Services Gross Profit: Patient services gross profit declined to $2.1 million from $4.7 million year-over-year, attributed to increased clinical labor and onboarding costs.

MLR Increase: The MLR is expected to fluctuate between 80% to 90% as new lives are onboarded, which may indicate rising medical costs.

Contract Delay: A statewide payer relationship in Florida has been pushed from Q3 to Q4, impacting expected capitated revenue for Q3.

5Notable Q&A Insights

Expansion in Nevada and Oregon: Contracts in these states are expected to significantly contribute to membership and revenue.

MLR Performance: The company is confident in maintaining a competitive MLR compared to industry standards, with expectations of 75% to 85% for delegated products once fully ramped.

Provider Portal Functionality: E-prescribing capabilities will lag the initial rollout of the provider portal by about a month.

Competitive Landscape: The company is winning contracts based on service quality and operational performance rather than market consolidation. Overall, Starling Oncology reported strong financial performance in Q2 2026, with significant growth in revenue and positive adjusted EBITDA. Strategic initiatives, including a rebranding and expansion into new markets, position the company well for future growth, despite some challenges related to rising costs and contract delays.