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 at $0.2 million, compared to a loss of $4.1 million in Q2 2025.

Gross Profit: $27.2 million, up from $17.5 million year-over-year, with a gross margin improvement to 16.8% from 14.6%.

Operating Expenses: SG&A expenses decreased to $29.9 million (18.6% of revenue) from $26.9 million (22.5% of revenue) year-over-year.

Free Cash Flow: Approximately $12.5 million for Q2, with year-to-date free cash flow at $9.5 million, an improvement of over $24 million compared to the prior year.

Cash Position: Ended the quarter with $41.1 million in cash and cash equivalents.

2Strategic Updates and Business Highlights

Rebranding: The company has rebranded to Starling Oncology, reflecting its evolution into a national value-based oncology leader.

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

Capitated Contracts: Anticipating three new delegated capitated contracts in Q4, adding approximately 80,000 lives and $50 million in annualized revenue. Achieved exclusivity in California with an additional 230,000 lives.

Strategic Refinancing: Completed a refinancing with OrbiMed, replacing an $86 million convertible note with a $75 million term loan, extending debt maturities to 2031 and improving liquidity.

3Forward Guidance and Outlook

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

Gross Profit Guidance: Updated to $105 million to $110 million.

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

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

4Bad News, Challenges, or Points of Concern

Medical Loss Ratio (MLR): Increased to 85.5% from 71% year-over-year, with expectations of 80% to 90% in the next 12 months due to onboarding new lives.

Patient Services Gross Profit Decline: Down to $2.1 million from $4.7 million year-over-year, attributed to increased clinical labor and conservative fee-for-service approaches.

Delayed Contract Launch: A statewide payer relationship in Florida has been pushed from Q3 to Q4, impacting anticipated revenue.

5Notable Q&A Insights

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

MLR Comparison: The company aims for MLR between 75% to 85% for delegated products once fully ramped, which is favorable compared to industry norms.

Concerns about Rebranding: Management has a targeted communication strategy to mitigate confusion from the name change and ensure smooth brand recognition.

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

Competitive Landscape: The exclusivity win in California was attributed to superior service and care coordination, not necessarily indicative of a broader trend of consolidation in the oncology space. Overall, Starling Oncology reported strong financial performance in Q2 2026, with significant growth in revenue and profitability, alongside strategic initiatives aimed at expanding its market presence and operational efficiency. However, challenges remain, particularly concerning MLR and the timing of contract launches.