The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in Part I, Item 1, “Condensed Consolidated Financial Statements,” of this Quarterly Report on Form 10-Q. In addition, reference is made to our audited consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 12, 2026.
In this section, “we,” “our,” “ours,” and “us” refer to Astrana Health, Inc. (“Astrana”) and its consolidated subsidiaries and affiliated entities, as appropriate, including its consolidated variable interest entities (“VIEs”).
Overview
Astrana is a leading physician-centric, AI-powered, risk-bearing healthcare management company. Leveraging our proprietary population health management and healthcare delivery platform, we operate an integrated, value-based healthcare model that aims to empower the providers in our network to deliver the highest quality of care in a cost-effective manner. Together with our affiliated physician groups and consolidated entities, we cost-effectively provide coordinated outcomes-based medical care.
Through our risk-bearing organizations with more than 20,000 contracted physicians, we were responsible for coordinating the care for approximately 1.5 million patients as of June 30, 2026. These covered patients are managed care members whose health coverage is provided either through their employers, directly from a health plan, or as a result of their eligibility for Medicaid or Medicare benefits. Our managed patients benefit from an integrated approach that places physicians at the center of patient care and utilizes sophisticated risk management techniques and clinical protocols to deliver high-quality, cost-effective care.
Key Financial Measures and Indicators
Operating Revenues
Our revenue, which is recorded in the period during which services are rendered and earned, generally on a monthly basis, primarily consists of capitation revenue, risk pool settlements and incentives, management fee income, fee-for-service (“FFS”) revenue, and other revenue primarily consisting of revenues earned from maternity care. The form of billing and related collection risk for such services may vary by revenue type and customer.
Operating Expenses
Our largest expenses consist of the cost of (a) patient care paid to contracted providers and (b) staff to provide management and administrative support services to our affiliated physician groups, as further described in the following sections. These services include claims processing, utilization management, contracting, accounting, credentialing, and administrative oversight.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA and Adjusted EBITDA margin are supplemental performance measures of our operations for financial and operational decision-making and are used as a supplemental means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation, and amortization, excluding income or loss from equity method investments, non-recurring and non-cash transactions, and stock-based compensation. We define Adjusted EBITDA margin as Adjusted EBITDA over total revenue.
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Adjusted Net Income Attributable to Astrana and Adjusted Earnings Per Share (“EPS”) – Diluted
Our adjusted EPS – diluted is a supplemental performance measure of our operations for financial and operational decision-making and is used as a supplemental means of evaluating period-to-period comparisons on a consistent basis. We define adjusted EPS – diluted as adjusted net income attributable to Astrana over weighted average shares of common stock outstanding – diluted. Adjusted net income attributable to Astrana is calculated as net income, excluding income or loss from equity method investments, non-recurring and non-cash transactions, stock-based compensation, amortization of intangibles, certain tax adjustments, and amounts related to net income or loss attributable to non-controlling interests.
Free Cash Flow
Our free cash flow is a supplemental performance measure of our operations for financial and operational decision-making and is used as a supplemental means of evaluating period-to-period comparisons on a consistent basis and reflects the cash flow trends in our business. We define free cash flow as net cash provided by operating activities minus cash used in purchases of property and equipment.
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Results of Operations
Astrana Health, Inc.
Condensed Consolidated Statements of Income (in thousands)
(Unaudited)
Three Months Ended June 30,
2026 2025 $ Change % Change
Revenue
Capitation and other revenue, net $ 972,520 $ 654,808 $ 317,712 49 %
Operating expenses
Cost of services, excluding depreciation and amortization 868,498 576,839 291,659 51 %
General and administrative expenses 54,150 50,725 3,425 7 %
Depreciation and amortization 15,550 6,904 8,646 125 %
Total expenses 938,198 634,468 303,730 48 %
Income from operations 34,322 20,340 13,982 69 %
Other (expense) income
Income from equity method investments 548 381 167 44 %
Interest expense (15,997 ) (7,382 ) (8,615 ) 117 %
Interest income 5,907 2,336 3,571 153 %
Unrealized gain on investments 4,732 14 4,718 *
Other (loss) income (2,302 ) 1,136 (3,438 ) (303 )%
Total other expense, net (7,112 ) (3,515 ) (3,597 ) 102 %
Income before provision for income taxes 27,210 16,825 10,385 62 %
Provision for income taxes 8,758 6,609 2,149 33 %
Net income 18,452 10,216 8,236 81 %
Net (loss) income attributable to non-controlling interests (1,287 ) 793 (2,080 ) (262 )%
Net income attributable to Astrana Health, Inc. $ 19,739 $ 9,423 $ 10,316 109 %
Adjusted EBITDA $ 68,889 $ 48,101 $ 20,788 43 %
* Percentage change of over 500%
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Astrana Health, Inc.
Condensed Consolidated Statements of Income (in thousands)
(Unaudited)
Six Months Ended June 30,
2026 2025 $ Change % Change
Revenue
Capitation and other revenue, net $ 1,937,620 $ 1,275,196 $ 662,424 52 %
Operating expenses
Cost of services, excluding depreciation and amortization 1,727,855 1,125,900 601,955 53 %
General and administrative expenses 115,888 94,623 21,265 22 %
Depreciation and amortization 31,028 13,752 17,276 126 %
Total expenses 1,874,771 1,234,275 640,496 52 %
Income from operations 62,849 40,921 21,928 54 %
Other (expense) income
Income (loss) from equity method investments 2,268 (486 ) 2,754 *
Interest expense (32,098 ) (14,690 ) (17,408 ) 119 %
Interest income 9,723 4,647 5,076 109 %
Unrealized gain (loss) on investments 5,816 (30 ) 5,846 *
Other loss (1,640 ) (3,934 ) 2,294 (58 )%
Total other expense, net (15,931 ) (14,493 ) (1,438 ) 10 %
Income before provision for income taxes 46,918 26,428 20,490 78 %
Provision for income taxes 15,335 9,991 5,344 53 %
Net income 31,583 16,437 15,146 92 %
Net (loss) income attributable to non-controlling interests (2,592 ) 322 (2,914 ) *
Net income attributable to Astrana Health, Inc. $ 34,175 $ 16,115 $ 18,060 112 %
Adjusted EBITDA $ 135,185 $ 84,485 $ 50,700 60 %
* Percentage change of over 500%
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Risk-Bearing Organizations and Patients
As of June 30, 2026 and 2025, we managed a total of 29 and 21 independent risk-bearing organizations, respectively, including both affiliated and non-affiliated. The total number of patients for whom we managed the delivery of healthcare services was approximately 1.5 million and 1.0 million as of June 30, 2026 and 2025, respectively.
Revenue
Revenue for the three months ended June 30, 2026 was $972.5 million, as compared to $654.8 million for the three months ended June 30, 2025, an increase of $317.7 million or 49%. The increase in revenue was primarily attributable to the Prospect acquisition, which contributed $281.5 million of revenue. In addition, capitation revenue increased by $45.0 million primarily as a result of enrollees transitioning to full risk through our Restricted Knox-Keene plans.
Revenue for the six months ended June 30, 2026 was $1,937.6 million, as compared to $1,275.2 million for the six months ended June 30, 2025, an increase of $662.4 million or 52%. The increase in revenue was primarily attributable to the Prospect acquisition, which contributed $581.6 million of revenue. In addition, capitation revenue increased by $91.4 million primarily as a result of enrollees transitioning to full risk through our Restricted Knox-Keene plans.
Cost of Services, Excluding Depreciation and Amortization
Expenses related to cost of services, excluding depreciation and amortization for the three months ended June 30, 2026 were $868.5 million, as compared to $576.8 million for the same period in 2025, an increase of $291.7 million or 51%. The overall increase was primarily due to $229.5 million from the acquisition of Prospect and increased participation in a value-based Medicare FFS model and medical costs associated with both professional and institutional risk of our Restricted Knox-Keene licensed health plans.
Expenses related to cost of services, excluding depreciation and amortization for the six months ended June 30, 2026 were $1,727.9 million, as compared to $1,125.9 million for the same period in 2025, an increase of $602.0 million or 53%. The overall increase was primarily due to $488.8 million from the acquisition of Prospect and increased participation in a value-based Medicare FFS model and medical costs associated with both professional and institutional risk of our Restricted Knox-Keene licensed health plans.
General and Administrative Expenses
General and administrative expenses for the three months ended June 30, 2026 were $54.2 million, as compared to $50.7 million for the same period in 2025, an increase of $3.4 million or 7%. The increase was primarily due to $13.3 million from the acquisition of Prospect as well as other general and administrative expenses to support operational growth.
General and administrative expenses for the six months ended June 30, 2026 were $115.9 million, as compared to $94.6 million for the same period in 2025, an increase of $21.3 million or 22%. The increase was primarily due to $29.8 million from the acquisition of Prospect.
Depreciation and Amortization
Depreciation and amortization expenses for the three months ended June 30, 2026 were $15.6 million, as compared to $6.9 million for the same period in 2025, an increase of $8.6 million or 125%, driven by $9.2 million due to the Prospect acquisition, primarily from the acquisition of its intangible assets. This amount includes depreciation of property and equipment and the amortization of intangible assets.
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Depreciation and amortization expenses for the six months ended June 30, 2026 were $31.0 million, as compared to $13.8 million for the same period in 2025, an increase of $17.3 million or 126%, driven by $18.4 million due to the Prospect acquisition, primarily from the acquisition of its intangible assets. This amount includes depreciation of property and equipment and the amortization of intangible assets.
Income from Equity Method Investments
Income from equity method investments for the three months ended June 30, 2026 was $0.5 million, as compared to $0.4 million for the same period in 2025. This amount includes our portion of the equity method investment’s net earnings and losses. This increase was primarily due to Allied Physicians of California, a Professional Medical Corporation’s (“APC”) equity method investment in LaSalle Medical Associates and our non-consolidated VIEs.
Income from equity method investments for the six months ended June 30, 2026 was $2.3 million, as compared to a loss of $0.5 million for the same period in 2025. This amount includes our portion of the equity method investment’s net earnings and losses. This increase was primarily due to APC equity method investment in LaSalle Medical Associates and our non-consolidated VIEs.
Interest Expense
Interest expense for the three months ended June 30, 2026 was $16.0 million, as compared to $7.4 million for the same period in 2025, an increase of $8.6 million or 117%. The increase in interest expense was primarily due to the increased borrowings under the Second Amended and Restated Credit Facility to finance the Prospect acquisition, partially offset by a decrease in interest rates on our floating-rate debt. Our outstanding borrowings, as of June 30, 2026, increased to $948.3 million on the Second Amended and Restated Credit Facility from $408.9 million borrowed under the facility as of June 30, 2025. The interest rate on the Term Loans and the Revolver Loan was 5.64% as of June 30, 2026. As of June 30, 2025, the interest rate for the Term Loans and the Revolver Loan was 6.08%.
Interest expense for the six months ended June 30, 2026 was $32.1 million, as compared to $14.7 million for the same period in 2025, an increase of $17.4 million or 119%. The increase in interest expense was primarily due to the increased borrowings under the Second Amended and Restated Credit Facility to finance the Prospect acquisition, partially offset by a decrease in interest rates on our floating-rate debt. Our outstanding borrowings, as of June 30, 2026, increased to $948.3 million on the Second Amended and Restated Credit Facility from $408.9 million borrowed under the facility as of June 30, 2025. The interest rate on the Term Loans and the Revolver Loan was 5.64% as of June 30, 2026. As of June 30, 2025, the interest rate for the Term Loans and the Revolver Loan was 6.08%.
Interest Income
Interest income for the three months ended June 30, 2026 was $5.9 million, as compared to $2.3 million for the same period in 2025, an increase of $3.6 million or 153%. Interest income reflects interest earned on cash held in bank accounts, money market and certificate of deposit accounts, and the interest from our loans receivable. The change in interest income was primarily due to an increase in our cash held in interest bearing bank accounts, including $1.1 million of interest income related to cash accounts from the Prospect acquisition.
Interest income for the six months ended June 30, 2026 was $9.7 million, as compared to $4.6 million for the same period in 2025, an increase of $5.1 million or 109%. Interest income reflects interest earned on cash held in bank accounts, money market and certificate of deposit accounts, and the interest from our loans receivable. The change in interest income was primarily due to an increase in our cash held in interest bearing bank accounts, including $1.6 million of interest income related to cash accounts from the Prospect acquisition.
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Unrealized Gain (Loss) on Investments
Unrealized gain on investments for the three months ended June 30, 2026, as compared to the same period in 2025, increased $4.7 million primarily due to the change in fair value of our interest rate swap and the change in fair value of our financing obligation.
Unrealized gain on investments for the six months ended June 30, 2026, as compared to the same period in 2025, increased $5.8 million primarily due to the change in fair value of our interest rate swap and the change in fair value of our financing obligation.
Other Income (Loss)
Other loss for the three months ended June 30, 2026 was $2.3 million, as compared to other income of $1.1 million for the same period in 2025, a decrease in other income of $3.4 million or 303%. The decrease in other income was primarily due to accrual for a non-routine legal matter.
Other loss for the six months ended June 30, 2026 was $1.6 million, as compared to other loss of $3.9 million for the same period in 2025, a decrease in other loss of $2.3 million or 58%. The decrease in other loss was primarily due to accrual for a non-routine legal matter in the 2026 period, partially offset by debt issuance costs incurred in connection with the Second Amended and Restated Credit Facility in 2025. No similar transaction occurred for the six months ended June 30, 2026.
Provision for Income Taxes
Provision for income taxes was $8.8 million for the three months ended June 30, 2026, as compared to $6.6 million for the same period in 2025, an increase of $2.1 million primarily due to an increase in pre-tax income.
Provision for income taxes was $15.3 million for the six months ended June 30, 2026, as compared to $10.0 million for the same period in 2025, an increase of $5.3 million primarily due to an increase in pre-tax income.
Net Income
Net income for the three months ended June 30, 2026 was $18.5 million, as compared to $10.2 million for the same period in 2025, an increase of $8.2 million.
Net income for the six months ended June 30, 2026 was $31.6 million, as compared to $16.4 million for the same period in 2025, an increase of $15.1 million.
Net (Loss) Income Attributable to Non-Controlling Interests
Net loss attributable to non-controlling interests for the three months ended June 30, 2026 was $1.3 million, as compared to a net income attributable to non-controlling interests of $0.8 million for the same period in 2025, a decrease of $2.1 million. The increase was primarily driven by losses in APC.
Net loss attributable to non-controlling interest for the six months ended June 30, 2026 was $2.6 million, as compared to a net income attributable to non-controlling interests of $0.3 million for the same period in 2025, a decrease of $2.9 million. The increase was primarily driven by losses in APC.
Net Income Attributable to Astrana Health, Inc.
Our net income attributable to Astrana Health, Inc. for the three months ended June 30, 2026 was $19.7 million, as compared to $9.4 million for the same period in 2025, an increase of $10.3 million.
Our net income attributable to Astrana Health, Inc. for the six months ended June 30, 2026 was $34.2 million, as compared to $16.1 million for the same period in 2025, an increase of $18.1 million.
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Adjusted EBITDA
Adjusted EBITDA for the three months ended June 30, 2026 was $68.9 million, as compared to $48.1 million for the same period in 2025, an increase of $20.8 million primarily due to the Prospect acquisition.
Adjusted EBITDA for the six months ended June 30, 2026 was $135.2 million, as compared to $84.5 million for the same period in 2025, an increase of $50.7 million primarily due to the Prospect acquisition.
See “Reconciliation of Net Income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin” below for additional information.
Segment Financial Performance
We currently have three reportable segments consisting of Care Partners, Care Delivery, and Care Enablement. Segment performance is evaluated based on segment revenue growth and operating income. Management uses revenue growth and total segment operating income as a measure of the performance of operating businesses, separate from non-operating factors. See Note 17 — “Segments” to our unaudited condensed consolidated financial statements under Item 1 in this Quarterly Report on Form 10-Q for additional information.
The following tables set forth our revenue and operating income (loss) by segment for the three and six months ended June 30, 2026 and 2025 (in thousands):
Three Months Ended June 30,
Segment Revenue 2026 2025 $ Change % Change
Care Partners $ 932,836 $ 631,442 $ 301,394 48 %
Care Delivery $ 74,696 $ 38,394 $ 36,302 95 %
Care Enablement $ 85,598 $ 40,901 $ 44,697 109 %
Three Months Ended June 30,
Segment Operating Income (Loss) 2026 2025 $ Change % Change
Care Partners $ 42,872 $ 49,685 $ (6,813 ) (14 )%
Care Delivery $ (2,967 ) $ 2,147 $ (5,114 ) (238 )%
Care Enablement $ 16,397 $ 1,841 $ 14,556 *
* Percentage change of over 500%
Six Months Ended June 30,
Segment Revenue 2026 2025 $ Change % Change
Care Partners $ 1,842,539 $ 1,232,393 $ 610,146 50 %
Care Delivery $ 159,773 $ 71,782 $ 87,991 123 %
Care Enablement $ 173,343 $ 80,461 $ 92,882 115 %
Six Months Ended June 30,
Segment Operating Income (Loss) 2026 2025 $ Change % Change
Care Partners $ 82,328 $ 93,900 $ (11,572 ) (12 )%
Care Delivery $ (5,930 ) $ (961 ) $ (4,969 ) *
Care Enablement $ 36,549 $ 5,374 $ 31,175 *
* Percentage change of over 500%
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Care Partners Segment
Revenue for the three months ended June 30, 2026 was $932.8 million, as compared to $631.4 million for the three months ended June 30, 2025, an increase of $301.4 million. Operating income for the three months ended June 30, 2026 was $42.9 million, as compared to $49.7 million for the three months ended June 30, 2025, a decrease in operating income of $6.8 million. The increase in revenue was primarily due to our acquisitions within our Care Partners segment, including $252.3 million in revenue from the Prospect acquisition, and members transitioning to full risk through our Restricted Knox-Keene plans. The decrease in operating income was primarily due to higher claims expense reflecting typical quarterly utilization patterns.
Revenue for the six months ended June 30, 2026 was $1,842.5 million, as compared to $1,232.4 million for the six months ended June 30, 2025, an increase of $610.1 million. Operating income for the six months ended June 30, 2026 was $82.3 million, as compared to $93.9 million for the six months ended June 30, 2025, a decrease in operating income of $11.6 million. The increase in revenue was primarily due to recent acquisitions within our Care Partners segment, including $518.9 million in revenue from the Prospect acquisition, and members transitioning to full risk through our Restricted Knox-Keene plans. The decrease in operating income was primarily due to non-routine allowances recorded against receivables that we plan to recover from the payer and higher claims expense reflecting typical quarterly utilization patterns.
Care Delivery Segment
Revenue for the three months ended June 30, 2026 was $74.7 million, as compared to $38.4 million for the three months ended June 30, 2025, an increase of $36.3 million. Operating loss for the three months ended June 30, 2026 was $3.0 million, as compared to operating income of $2.1 million for the three months ended June 30, 2025, a decrease in operating income of $5.1 million. The increase in revenue was primarily driven by $36.0 million of revenue from the inclusion of Prospect, as well as increased volume in patient visits and continued investments at our primary, multi-specialty, and ancillary Care Delivery entities. The decrease in operating income was driven by increased costs to support the growth of our Care Delivery business.
Revenue for the six months ended June 30, 2026 was $159.8 million, as compared to $71.8 million for the six months ended June 30, 2025, an increase of $88.0 million. Operating loss for the six months ended June 30, 2026 was $5.9 million, as compared to a loss of $1.0 million, for the six months ended June 30, 2025, a decrease in operating income of $5.0 million. The increase in revenue was primarily driven by $85.9 million of revenue from the inclusion of Prospect, as well as increased volume in patient visits and continued investments at our primary, multi-specialty, and ancillary Care Delivery entities. The decrease in operating income was driven by increased costs to support the growth of our Care Delivery business.
Care Enablement Segment
Revenue for the three months ended June 30, 2026, was $85.6 million, as compared to $40.9 million for the three months ended June 30, 2025, an increase of $44.7 million. Operating income for the three months ended June 30, 2026 was $16.4 million, as compared to $1.8 million for the three months ended June 30, 2025, an increase of $14.6 million. The increases in revenue and operating income were primarily due to the addition of Prospect, which contributed $36.7 million in revenue, and management fees earned from increased Care Partners revenue and new external contracts.
Revenue for the six months ended June 30, 2026 was $173.3 million, as compared to $80.5 million for the six months ended June 30, 2025, an increase of $92.9 million. Operating income for the six months ended June 30, 2026 was $36.5 million, as compared to $5.4 million, for the six months ended June 30, 2025, an increase in operating income of $31.2 million. The increases in revenue and operating income were primarily due to the addition of Prospect, which contributed $77.5 million in revenue, and management fees earned from increased Care Partners revenue and new external contracts.
As of June 30, 2026 and 2025, the total number of affiliated physician groups we managed were 29 and 21 groups, respectively.
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Reconciliation of Net Income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
Set forth below are reconciliations of Net Income to EBITDA and Adjusted EBITDA, as well as the reconciliations to Adjusted EBITDA margin for the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2026 2025 2026 2025
Net income $ 18,452 $ 10,216 $ 31,583 $ 16,437
Interest expense 15,997 7,382 32,098 14,690
Interest income (5,907 ) (2,336 ) (9,723 ) (4,647 )
Provision for income taxes 8,758 6,609 15,335 9,991
Depreciation and amortization 15,550 6,904 31,028 13,752
EBITDA 52,850 28,775 100,321 50,223
(Income) loss from equity method investments (548 ) (381 ) (2,268 ) 486
Other, net 4,800 (1) 7,998 (2) 15,450 (3) 14,257 (4)
Stock-based compensation 11,787 11,709 21,682 19,519
Adjusted EBITDA $ 68,889 $ 48,101 $ 135,185 $ 84,485
Total revenue $ 972,520 $ 654,808 $ 1,937,620 $ 1,275,196
Adjusted EBITDA margin 7 % 7 % 7 % 7 %
(1)Other, net, for the three months ended June 30, 2026 relates to post-acquisition integration costs, non-cash update to the fair value of an equity purchase financing obligation, accruals for non-routine legal matters, and severance.
(2)Other, net, for the three months ended June 30, 2025 relates to transaction and other costs related to our acquisitions including Prospect, non-cash changes in the fair value of our call option and collar agreement, and severance.
(3)Other, net, for the six months ended June 30, 2026 relates to an allowance on receivables that the Company plans to recover from the payer, post-acquisition integration costs, non-cash update to the fair value of an equity purchase financing obligation, accruals for non-routine legal matters, and severance.
(4)Other, net, for the six months ended June 30, 2025 relates to debt issuance costs expensed in connection with our Second Amended and Restated Credit Facility, transaction and other costs related to our acquisitions including Prospect, non-cash changes in the fair values of our call option and collar agreement, and severance.
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Reconciliation of Net Income to Adjusted Net Income Attributable to Astrana and Adjusted EPS – Diluted
Set forth below are reconciliations of net income to adjusted net income attributable to Astrana as well as the reconciliations to adjusted EPS – diluted for the three and six months ended June 30, 2026 and 2025.
Three Months Ended June 30, Six Months Ended June 30,
(in thousands, except for share and per share data) 2026 2025 2026 2025
Net income $ 18,452 $ 10,216 $ 31,583 $ 16,437
(Income) loss from equity method investments (548 ) (381 ) (2,268 ) 486
Other, net (1) 4,800 7,998 15,450 14,257
Stock-based compensation 11,787 11,709 21,682 19,519
Amortization of intangible assets attributable to acquisitions 13,806 6,179 27,656 12,442
Tax adjustments (5,965 ) (2) (4,637 ) (3) (13,490 ) (2) (9,238 ) (3)
Adjusted net income attributable to non-controlling interests (2,561 ) (4) (3,715 ) (5) (4,489 ) (4) (6,032 ) (5)
Adjusted net income attributable to Astrana Health, Inc. $ 39,771 $ 27,369 $ 76,124 $ 47,871
Weighted average shares of common stock outstanding – diluted 49,778,028 49,470,677 49,418,278 49,162,653
Adjusted earnings per share - diluted $ 0.80 $ 0.55 $ 1.54 $ 0.97
(1)The components of other, net, as set forth in the table above, are described in the footnotes to the table under “Reconciliation of Net Income to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin”. Please see the footnotes to such table for additional information.
(2)Tax adjustments for the three and six months ended June 30, 2026 includes the tax effect for, at a 27.4% statutory blended tax rate, the adjustments made to net income of $8.2 million and $17.0 million, respectively, partially offset by 162(m) impact of $2.2 million and $3.5 million, respectively.
(3)Tax adjustments for the three and six months ended June 30, 2025 includes the tax effect for, at a 27.1% statutory blended tax rate, the adjustments made to net income of $6.9 million and $12.7 million, respectively, partially offset by 162(m) impact of $2.3 million and $3.4 million, respectively.
(4)Includes net loss attributable to non-controlling interests (“NCI”) of $1.3 million and $2.6 million, respectively, offset by adjustments attributable to NCI of $3.8 million and $7.1 million, respectively, for the three and six months ended June 30, 2026.
(5)Includes net income attributable to NCI of $0.8 million and $0.3 million, respectively, as well as adjustments attributable to NCI of $2.9 million and $5.7 million, respectively, for the three and six months ended June 30, 2025.
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Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow
The following table provides a reconciliation of net cash provided by operating activities to free cash flow for the six months ended June 30, 2026 and 2025 (in thousands):
Six Months Ended June 30,
(in thousands) 2026 2025
Net cash provided by operating activities $ 100,804 $ 107,528
Purchases of property and equipment (7,878 ) (4,490 )
Free cash flow $ 92,926 $ 103,038
Use of Non-GAAP Financial Measures
This Quarterly Report on Form 10-Q contains the non-GAAP financial measures EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, adjusted net income attributable to Astrana, and adjusted EPS – diluted, of which the most directly comparable financial measure presented in accordance with U.S. generally accepted accounting principles (“GAAP”) is net income. This Quarterly Report on Form 10-Q also contains the non-GAAP financial measure free cash flow, of which the most directly comparable financial measure presented in accordance with U.S. GAAP is net cash provided by operating activities. These measures are not in accordance with, or alternatives to, GAAP, and may be calculated differently from similar non-GAAP financial measures used by other companies. We use Adjusted EBITDA, Adjusted EBITDA margin, adjusted EPS – diluted, and free cash flow as supplemental performance measures of our operations, for financial and operational decision-making, and as supplemental means of evaluating period-to-period comparisons on a consistent basis and, for free cash flow, to reflect the cash flow trends in our business. Adjusted EBITDA is calculated as earnings before interest expense, interest income, income taxes, depreciation, and amortization, excluding income or loss from equity method investments, non-recurring and non-cash transactions, and stock-based compensation. We define Adjusted EBITDA margin as Adjusted EBITDA over total revenue. Adjusted net income attributable to Astrana is calculated as net income, excluding income or loss from equity method investments, non-recurring and non-cash transactions, stock-based compensation, amortization of intangible assets attributable to acquisitions, certain tax adjustments, and amounts related to net income or loss attributable to non-controlling interests. We define adjusted EPS – diluted as adjusted net income attributable to Astrana over weighted average shares of common stock outstanding – diluted. We define free cash flow as net cash provided by operating activities minus cash used in purchases of property and equipment.
We believe the presentation of these non-GAAP financial measures provides investors with relevant and useful information, as it allows investors to evaluate the operating performance of the business activities without having to account for differences recognized because of non-core or non-recurring financial information. When GAAP financial measures are viewed in conjunction with non-GAAP financial measures, investors are provided with a more meaningful understanding of our ongoing operating performance. In addition, these non-GAAP financial measures are among those indicators we use as a basis for evaluating operational performance, allocating resources, and planning and forecasting future periods. Non-GAAP financial measures are not intended to be considered in isolation, or as a substitute for, GAAP financial measures. Other companies may calculate EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, adjusted net income attributable to Astrana, adjusted EPS – diluted, and free cash flow differently, limiting the usefulness of these measures for comparative purposes. To the extent this Quarterly Report on Form 10-Q contains historical or future non-GAAP financial measures, we have provided corresponding GAAP financial measures for comparative purposes. The reconciliations between certain GAAP and non-GAAP measures are provided above.
Liquidity and Capital Resources
Cash and cash equivalents at June 30, 2026 totaled $400.8 million, as compared to $429.5 million at December 31, 2025. Working capital totaled $171.5 million at June 30, 2026, as compared to $248.0 million at December 31, 2025, a decrease of $76.5 million.
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We have historically financed our operations primarily through internally generated funds and borrowings on long-term debt. We generate cash primarily from capitation contracts, risk pool settlements and incentives, fees for medical management services provided to our affiliated physician groups, FFS reimbursements, and other revenues. We generally invest cash in money market accounts, which are classified as cash and cash equivalents. In February 2025, we entered into the Second Amended and Restated Credit Agreement, which amended and restated that certain amended credit agreement and provides for a five-year revolving credit facility of $300.0 million (the “Revolver Loan”), a term loan of $250.0 million, and a delayed-draw term loan that was drawn for $707.3 million in July 2025, which we primarily used to refinance certain existing indebtedness and to fund the costs associated with the Prospect acquisition (as combined, the “Term Loans”). We had $258.0 million remaining available under the revolving credit facility as of June 30, 2026. In addition, we have a current shelf registration statement filed with the SEC under which we may issue common stock, preferred stock, debt securities, and other securities that may be offered in one or more offerings on terms to be determined at the time of the offering. We believe we have sufficient liquidity to fund our operations through at least the next 12 months and the foreseeable future.
Cash Flow Activities
Our cash flows are summarized as follows (in thousands):
Six Months Ended June 30,
2026 2025 $ Change % Change
Net cash provided by operating activities $ 100,804 $ 107,528 $ (6,724 ) (6 )%
Net cash used in investing activities (9,072 ) (3,471 ) (5,601 ) 161 %
Net cash used in financing activities (120,034 ) (52,808 ) (67,226 ) 127 %
Net (decrease) increase in cash, cash equivalents, and restricted cash $ (28,302 ) $ 51,249 $ (79,551 ) (155 )%
Operating Activities
Cash provided by operating activities for the six months ended June 30, 2026, was $100.8 million, as compared to cash provided by operating activities of $107.5 million for the six months ended June 30, 2025. The decrease in cash provided by operating activities was primarily driven by unfavorable changes in working capital relative to the six months ended June 30, 2025 and partially offset by higher adjusted net income. The change in working capital for the 2026 and 2025 periods included timing of claims payments related to our medical liabilities, timing of payments for provider incentives, and a decrease in cash paid for income taxes. For the six months ended June 30, 2026, net income, exclusive of depreciation and amortization, amortization of debt issuance cost, share-based compensation, non-cash lease expense, deferred tax, change in fair value of contingent consideration liabilities, and other was $81.9 million, as compared to $56.0 million for the six months ended June 30, 2025.
Investing Activities
Cash used in investing activities during the six months ended June 30, 2026, was $9.1 million, primarily due to purchases of property and equipment of $7.9 million and payments for business and assets acquisition, net of cash acquired of $3.7 million. Cash used in investing activities during the six months ended June 30, 2025 was $3.5 million primarily due to purchases of property and equipment of $4.5 million.
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Financing Activities
Cash used in financing activities during the six months ended June 30, 2026, was $120.0 million, primarily due to repayments of debt of $103.9 million, repurchase of treasury and subsidiary’s shares of $4.4 million, tax payments from net share settlement of restricted stock of $3.8 million, payment of contingent liabilities of $2.9 million, and dividend payments of $0.2 million. Cash used in financing activities during the six months ended June 30, 2025 was $52.8 million, primarily due to repayments of debt of $431.4 million, payments of deferred financing costs of $17.2 million, dividends paid of $6.2 million, taxes paid from net share settlement of restricted stock of $5.1 million, and other financing activities of $4.9 million consisting of payment of contingent consideration and repurchase of treasury shares, partially offset by borrowings on debt of $412.0 million.
Credit Facility
The following are the future commitments of our debt for the years ending December 31 (in thousands) below:
Amount
2026 (excluding the six months ended June 30, 2026) $ 23,932
2027 65,814
2028 71,798
2029 89,747
2030 697,019
Total $ 948,310
The Revolver Loan and the Term Loans under our Second Amended and Restated Credit Agreement mature on February 26, 2030. See Note 8 — “Credit Facility and Bank Loans” to our unaudited condensed consolidated financial statements under Part I. Item 1 in this Quarterly Report on Form 10-Q for additional information.
Critical Accounting Policies and Estimates
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires our management to make judgments, assumptions, and estimates that affect the amounts of revenue, expenses, income, assets, and liabilities reported in our condensed consolidated financial statements and accompanying notes. Actual results and the timing of recognition of such amounts could differ. In addition, judgments, assumptions, and estimates routinely require adjustment based on changing circumstances and the receipt of new or better information. Understanding our accounting policies and the extent to which management uses judgment, assumptions, and estimates in applying these policies is therefore integral to understanding our financial statements. Critical accounting policies and estimates are defined as those that reflect significant judgments and uncertainties, potentially resulting in materially different results under different assumptions and conditions. We summarize our most significant accounting policies in relation to the accompanying condensed consolidated financial statements in Note 2 — “Basis of Presentation and Summary of Significant Accounting Policies” thereto. Please also refer to the “Critical Accounting Policies” section of Management’su Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Off-Balance Sheet Arrangements
As of June 30, 2026, we had no off-balance sheet arrangements that are, or have been, reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to investors.
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