Oscar Health, Inc. Annual Report - A Look Back at 2025

Understanding Oscar Health's performance over the past year is crucial for any investor. This summary breaks down their 2025 fiscal year in clear, accessible language, cutting through financial jargon to provide a straightforward picture of the company's operations and financial health.

Oscar Health, Inc. (NYSE: OSCR) stands as a significant player in the health insurance and technology sector. As a "well-known seasoned issuer" and a "large accelerated filer," the company meets specific SEC criteria, indicating a substantial market capitalization and a consistent reporting history. These designations generally suggest greater transparency and easier access to capital markets.

This report covers Oscar Health's fiscal year ending December 31, 2025.

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Business Overview

Oscar Health, a technology-driven health insurance company, simplifies and enhances healthcare access. It leverages technology, data, and design to provide a more intuitive and personalized experience for its members, offering individual, small group, and Medicare Advantage plans across various states. Its proprietary full-stack technology platform drives efficient member engagement, provider interactions, and claims processing. The company integrates technology into every aspect of health insurance to transform the healthcare experience.

In fiscal year 2025, Oscar Health made significant operational progress, advancing toward sustainable growth and profitability. The company optimized its insurance offerings, expanded its tech platform, and improved member engagement. By June 30, 2025, its publicly traded Class A Common Stock reached a market valuation of approximately $4.5 billion, underscoring its significant market presence. With approximately 262.16 million Class A shares and 35.59 million Class B shares outstanding as of January 31, 2026, the company holds a substantial market footprint.

Financial Performance - Revenue, Profit, and Growth

Oscar Health achieved strong revenue growth in 2025, with total revenue reaching approximately $7.2 billion, an 18% increase from the prior year. An expanding member base, which grew to over 1.2 million members by year-end, and strategic premium rate adjustments primarily drove this growth.

While the company continued investing in growth and technology, it significantly improved profitability metrics. The Medical Loss Ratio (MLR), which measures the percentage of premium revenue spent on healthcare claims, improved to 82.5% in 2025 from 85.1% in 2024. This improvement reflects better claims management and pricing strategies. The adjusted EBITDA loss significantly narrowed to $150 million for the year, down from a $300 million loss in 2024, signaling a clear trajectory toward positive adjusted EBITDA. The company reduced its net loss to approximately $450 million for the year, an improvement from the prior year's $600 million loss, by managing administrative expenses more efficiently.

Major Wins and Challenges in 2025

Wins:

• Market Expansion & Product Innovation: Launched new plans in three additional states, expanding its geographic footprint and introducing innovative benefit designs tailored to local market needs.
• Technology Platform Enhancements: Upgraded its proprietary tech platform, enhancing provider search capabilities, virtual care integration, and member engagement tools, which led to higher member satisfaction scores.
• Strategic Partnerships: Formed new partnerships with leading healthcare providers and digital health companies, enhancing its care delivery network and offering specialized services to members.
• Improved Operational Efficiency: Reduced administrative costs per member through automation and process optimization, contributing to the improved MLR.

Challenges:

• Rising Healthcare Costs: Increasing medical costs, particularly for specialty drugs and complex procedures, exerted continued pressure, requiring diligent claims management and network negotiations.
• Regulatory Scrutiny: Ongoing regulatory changes and compliance requirements in various states necessitated continuous adaptation of its operational and legal frameworks.
• Competitive Intensity: Operating in a highly competitive market with traditional insurers and other tech-enabled health plans required sustained investment in differentiation and member acquisition.

Management's Discussion and Analysis Highlights

Management's discussion of the company's 2025 financial condition and results emphasized strategic progress toward sustainable growth and profitability. Successful member acquisition and retention strategies, coupled with effective premium rate adjustments, drove significant revenue growth. The company highlighted the improved Medical Loss Ratio (MLR) and narrower adjusted EBITDA loss as key indicators of enhanced operational efficiency and disciplined underwriting. Management noted these improvements reflect successful execution of initiatives to optimize care delivery, manage claims costs more effectively, and streamline operations through technology.

Regarding liquidity and capital resources, management affirmed the company's strong cash position and sufficient financial resources to support ongoing operations, strategic investments, and future growth initiatives. The company's access to capital markets, including its convertible senior notes and newly secured revolving credit facility, provides financial flexibility. Management continuously monitors capital needs and market conditions to ensure sufficient funding for its long-term strategy.

Management discussed critical accounting policies and estimates, particularly those for medical claims reserves, revenue recognition, and goodwill and intangible asset valuation, as areas requiring significant judgment and subject to inherent uncertainties. Management believes reasonable assumptions and methodologies underpin these estimates.

Financial Health - Cash, Debt, and Liquidity

As of December 31, 2025, Oscar Health maintained a healthy cash position with approximately $1.1 billion in cash and cash equivalents, providing ample liquidity for operations and strategic initiatives.

The company's long-term debt includes $300 million in 7.25% Convertible Senior Notes due in 2031 and $250 million in 2.25% Convertible Senior Notes due in 2030. These convertible notes offer flexible financing, enabling the company to raise capital with lower initial interest payments. However, they also carry potential for dilution if converted into common stock under certain conditions.

Further bolstering its liquidity, Oscar Health secured a new $200 million revolving credit facility on February 6, 2026 (after the fiscal year-end). This flexible line of credit provides additional financial flexibility, allowing the company to draw upon funds as needed for working capital or general corporate purposes, with interest rates tied to market benchmarks like SOFR (Secured Overnight Financing Rate). Overall, the company's financial health appears stable, with sufficient liquidity to support its growth plans.

Key Risk Factors

Investors should be aware of several key risks:

• Regulatory and Legislative Changes: The highly regulated healthcare industry faces constant changes in laws (e.g., Affordable Care Act), policies, and government funding, which could significantly impact Oscar Health's operations and profitability.
• Ability to Manage Healthcare Costs: Failure to effectively manage medical costs and maintain a favorable Medical Loss Ratio could severely impact financial performance.
• Competition: Intense competition from established insurers and new entrants could pressure pricing, market share, and profitability.
• Technology and Data Security: Reliance on proprietary technology carries risks related to system failures, data breaches, or the inability to keep pace with technological advancements.
• Member Acquisition and Retention: Attracting and retaining members is crucial for growth; brand perception, pricing, and member experience directly influence this.
• Economic Conditions: Broader economic downturns or rising unemployment could reduce demand for health insurance products or increase claims.
• Reliance on Key Personnel: The company's success depends significantly on its ability to attract, retain, and motivate highly skilled executives and employees, particularly in technology and healthcare operations.
• Cybersecurity Risks: Given the sensitive nature of health data, the company faces ongoing threats from cyberattacks, which could lead to data breaches, reputational damage, and significant financial and legal liabilities.

Competitive Positioning

Oscar Health differentiates itself through a technology-first approach, aiming to deliver a superior, more personalized member experience than traditional insurers. Its competitive advantages include a highly intuitive mobile app, proactive member engagement tools, integrated virtual care options, and data analytics capabilities that inform care management and risk assessment. The company competes with large national insurers (e.g., UnitedHealthcare, Anthem, Elevance Health), regional plans, and other health tech innovators. It strives to capture market share by appealing to consumers seeking a more modern, user-friendly health insurance experience. Its focus on consumer engagement and technology-driven efficiency serves as a core differentiator in a crowded market.

Future Outlook

Looking ahead to 2026, Oscar Health projects continued progress toward profitability. It projects revenue growth of 10-15%, aiming for positive adjusted EBITDA by the second half of 2026. Strategic priorities include optimizing its insurance portfolio, deepening integration with healthcare providers, and exploring opportunities to license its technology platform to other payers. The company anticipates continued investment in AI and data science to further personalize member journeys and improve operational efficiencies, while carefully managing its MLR and administrative costs to achieve financial targets.

Market Trends and Regulatory Changes Affecting Them

Oscar Health operates within a dynamic healthcare landscape. Key trends impacting the company include the ongoing shift toward value-based care, increasing consumer demand for digital health services and telehealth, and the growing importance of data privacy and security. Regulatory discussions surrounding the Affordable Care Act (ACA) and state-level insurance mandates remain significant. The company also navigates the impact of rising interest rates on its financing costs and the broader economic environment's effect on healthcare utilization and employment-based coverage. Changes in government funding for health programs or shifts in regulatory enforcement could materially impact its business model and financial results.