Oscar Health Posts Wider-Than-Expected Loss as Medical Costs Surge; Shares Fall
Oscar Health Inc (NYSE:OSCR) reported fourth-quarter financial results that significantly missed analyst expectations, driven by a sharp deterioration in its medical cost ratio. The health insurer's stock traded lower in pre-market activity following the release, reflecting investor concern over the company's near-term profitability.
Earnings and Revenue Miss
For the quarter ended December 31, 2025, Oscar Health reported a substantial net loss, with both revenue and earnings per share falling short of Wall Street forecasts.
- Revenue: The company reported total revenue of $2.81 billion for Q4 2025. This fell short of the analyst consensus estimate of approximately $3.19 billion.
- Earnings Per Share: The reported net loss per share (basic and diluted) was $1.24. This was notably worse than the estimated loss of $0.91 per share that analysts had projected.
The primary driver behind the disappointing quarter was a significant spike in medical costs. The company's medical loss ratio (MLR)—a key metric showing medical expenses as a percentage of premiums—jumped to 95.4% in the fourth quarter, up from 88.1% in the same period last year. For the full year 2025, the MLR was 87.4%, compared to 81.7% in 2024. Management attributed the increase to higher average market morbidity, which led to a larger net risk adjustment transfer accrual, as well as higher healthcare utilization that was not fully offset by risk adjustment payments.
Full-Year 2025 and Membership Growth
The full-year 2025 results painted a picture of a company growing its customer base rapidly but facing severe profitability headwinds.
- Annual Revenue: Full-year revenue grew to $11.70 billion, up from $9.18 billion in 2024.
- Annual Profitability: The company swung to a net loss of $443.2 million, or $1.69 per share, compared to a net income of $25.4 million, or $0.10 per share, in 2024. Similarly, Adjusted EBITDA was a loss of $279.8 million, down from a positive $199.2 million in the prior year.
- Member Growth: Despite the financial setbacks, Oscar's core business continued to expand. Total membership reached a record 2,042,449 as of December 31, 2025, a 22% increase from 1,676,970 a year earlier. This growth was solely in its Individual and Small Group segment, as the company did not renew its Cigna+Oscar small group partnership after it expired at the end of 2024.
2026 Outlook vs. Analyst Expectations
Looking ahead, Oscar Health provided financial guidance for 2026 that signals a targeted return to profitability, though the revenue outlook appears cautious relative to current analyst expectations.
The company's 2026 guidance includes:
- Total Revenue: Between $18.7 billion and $19.0 billion.
- Medical Loss Ratio: Between 82.4% and 83.4%.
- SG&A Expense Ratio: Between 15.8% and 16.3%.
- Earnings from Operations: Between $250 million and $450 million.
Notably, the midpoint of the company's revenue guidance range ($18.85 billion) is below the current analyst sales estimate for full-year 2026, which stands at approximately $12.82 billion. It is important to clarify this discrepancy: the company's "Total Revenue" guidance includes premium revenue net of risk adjustment transfers, investment income, and other revenues, which may be calculated differently than the "sales" figure tracked by some analysts. The more critical takeaway for investors is the projected return to operating profitability, with the company forecasting positive earnings from operations for the first time in recent years.
Market Reaction and Strategic Moves
The market's negative reaction in pre-market trading aligns with the earnings and revenue misses for the fourth quarter. Investors are likely weighing the strong membership growth and promised 2026 profitability against the immediate financial strain evidenced in the Q4 report.
In a concurrent strategic move, Oscar Health announced on February 6, 2026, that it entered into a new $475 million secured revolving credit facility. Chief Financial Officer Scott Blackley stated the move was to "strengthen our balance sheet and optimize our capital structure," providing flexibility to support long-term growth.
Conclusion
Oscar Health's fourth-quarter results underscore the volatility and challenge of managing medical costs in the individual insurance market. While the company successfully added over 360,000 new members in 2025, this growth came at a high financial cost, leading to significant losses. The focus now shifts to the execution of its 2026 plan, which hinges on dramatically improving its medical loss ratio and leveraging its expanded member base to achieve the operational profitability outlined in its guidance. The company's ability to navigate risk adjustment programs and control utilization will be critical to meeting its targets and restoring investor confidence.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice, an endorsement, or a recommendation to buy, sell, or hold any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
