Oscar Health (NYSE:OSCR) Surges on Narrowed Loss and Reaffirmed Guidance Despite Q3 Revenue Miss

Oscar Health Inc - Class A (NYSE:OSCR) reported its financial results for the third quarter of 2025, revealing a performance that fell short of top-line expectations but demonstrated significant progress on operational expenses. The market's initial reaction, a notable pre-market surge, suggests investors are focusing on the company's reaffirmed full-year guidance and improving cost discipline rather than the quarterly revenue miss.

Quarterly Financial Performance Versus Estimates

The health insurer reported a mixed quarter relative to analyst forecasts. While the bottom-line loss was slightly better than anticipated, the company did not meet revenue expectations for the period.

• Revenue: Oscar Health posted total revenue of $2.99 billion for Q3 2025. This fell short of the analyst consensus estimate of $3.14 billion.
• Earnings Per Share (EPS): The company reported a net loss per share of $0.53. This was a narrower loss compared to the estimated loss of $0.57 per share.

The primary driver behind the revenue shortfall was a significant increase in the net risk adjustment transfer accrual, a factor related to the overall health profile of its market population. Despite this, the company managed to control its operational costs effectively.

Market Reaction and Price Action

The immediate market response to the earnings release was decisively positive. Shares of Oscar Health experienced a substantial pre-market increase of over 7%. This bullish movement indicates that investors are looking beyond the quarterly revenue miss and are instead encouraged by the company's operational improvements and its confidence in the full-year outlook. The positive sentiment appears to be outweighing the negative pressure from recent weeks, during which the stock had declined.

Key Highlights from the Q3 2025 Report

The earnings release underscored several critical developments for Oscar Health, focusing on membership growth, cost management, and strategic financial moves.

• Strong Membership Growth: Total membership grew to over 2.1 million as of September 30, 2025, a 28% increase from the 1.65 million members reported a year earlier. This growth was primarily fueled by the Individual and Small Group segment.
• Improved Cost Efficiency: The company demonstrated improved operational leverage, with its SG&A (Selling, General, and Administrative) expense ratio decreasing to 17.5% from 19.0% in the prior year quarter. This reflects greater fixed cost leverage and disciplined cost management.
• Capital Structure Simplification: Oscar Health announced a partial settlement of its 2031 Convertible Senior Notes, exchanging approximately $187.5 million in debt for equity. This transaction is aimed at reducing future interest expense and simplifying the balance sheet.
• Reaffirmed 2025 Guidance: The company maintained its full-year 2025 outlook, projecting total revenue between $12.0 billion and $12.2 billion and a loss from operations in the range of $300 million to $200 million. This reaffirmation provides visibility and reinforces management's confidence in its annual targets.

Forward Outlook and Analyst Expectations

Looking ahead, the company's reaffirmed guidance aligns with the broader market expectations for the full year. The focus for investors will now shift to the fourth quarter and the company's progress toward its stated goal of returning to profitability in 2026. CEO Mark Bertolini emphasized that "disciplined pricing and geographic expansion position us to profitably grow market share," highlighting the strategic path forward.

For a detailed breakdown of historical earnings, future estimates, and analyst projections for Oscar Health, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.