Oscar Health reported third‑quarter 2025 revenue of $2.99 billion, up 23% from $2.32 billion a year earlier, but still below the consensus estimate of $3.08 billion. Membership grew to 2.11 million, a 28% increase from 1.65 million in Q3 2024. The company posted a loss from operations of $129.3 million and a net loss of $137.5 million, while adjusted EBITDA fell to a $101.5 million loss.
The revenue miss was driven by a 4.5% shortfall in the individual‑market segment, where higher risk‑adjustment transfer accruals and a 3.9 percentage‑point jump in the medical loss ratio to 88.5% offset the 23% growth in membership. The higher morbidity, largely attributed to Medicaid lives entering the market and early program‑integrity initiatives, increased the cost of care and pushed the MLR above the 84.6% level seen a year earlier.
Oscar Health’s earnings per share of $‑0.53 beat the consensus estimate of $‑0.55 or $‑0.56, a surprise of roughly $0.02 or 3.6%. The beat was largely the result of disciplined cost management, reflected in a 1.5‑percentage‑point improvement in the SG&A expense ratio to 17.5% from 19.0% a year earlier, and a narrower operating loss relative to the prior year’s $48.4 million loss.
Margin compression continued, with the medical loss ratio rising to 88.5% from 84.6% and risk‑adjustment transfer accruals increasing by $130 million. These factors eroded profitability, pushing the adjusted EBITDA loss to $101.5 million from a $11.6 million loss a year earlier. The company’s operating margin slipped to 9.9% from 10.2% a year earlier.
Management reaffirmed its full‑year 2025 guidance, projecting total revenue of $12.0–$12.2 billion, a loss from operations of $200–$300 million, and an adjusted EBITDA loss roughly $120 million less than the operating loss. The company reiterated its 2026 profitability target, citing a planned 28% average rate increase and $60 million in administrative cost savings. The guidance signals confidence that the company can navigate current headwinds while positioning for profitability in 2026.
Investors responded positively to the EPS beat and the reaffirmed guidance, underscoring confidence in Oscar Health’s cost‑control strategy and its ability to manage the impact of higher morbidity and risk‑adjustment accruals.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.