OSCR 10-Q: Smart Summary

• Business description: Oscar Health, Inc. is a healthcare technology company whose Class A common stock trades on the NYSE under the symbol 'OSCR'; it operates as one reportable segment selling insurance to individuals, families, and employees through federal and state-run ACA exchanges, and offers technology services via its +Oscar platform.
• Subsidiaries: The Company wholly owns three Marketplace Subsidiaries: Lucie, Inc. (formerly INSXCloud, Inc.), a technology enrollment platform; Trove Group Inc. (formerly IHC Specialty Benefits, Inc.), an insurance agency selling individual medical and supplemental health products; and HealthInsurance.org, LLC, a lead generation website for health insurance education.
• Membership: As of March 31, 2026, the Company had approximately 3.2 million effectuated members — those actively enrolled in one of the Company's plans whose required premium payments have been made or are within the payment grace period.
• Reclassification: Certain prior period amounts were reclassified within components of total current assets, total current liabilities, and cash flows from operating activities to conform to current period presentation; these reclassifications had no impact on previously reported totals for current assets, current liabilities, or net cash provided by operating activities.

• Dilution methodology: Diluted EPS uses the treasury stock method for stock options and RSUs, and the if-converted method for convertible senior notes; in net loss periods, all potentially dilutive securities are excluded as anti-dilutive and basic EPS equals diluted EPS.
• Anti-dilutive exclusions: 6,628 thousand potential common shares were excluded from diluted EPS for the three months ended March 31, 2026 (vs. 7,952 thousand in 2025), composed of 2,428 thousand stock options, 3,574 thousand RSUs, and 626 thousand performance-based RSUs (nil in 2025).

• Premium revenue components: Direct policy premiums of $6B less risk adjustment transfers of ($1.4B, reinsurance premiums ceded of ($5.6M, and assumed premiums of ($984,000 yielded total premium revenue of $4.6B for the three months ended March 31, 2026, compared to $3B for the three months ended March 31, 2025.
• CMS premium subsidies: Direct policy premiums earned from CMS were $5.5B and $3.1B for the three months ended March 31, 2026 and March 31, 2025, respectively, net of premium subsidies refunded or estimated to be refunded; the amount of premium subsidies expected to be refunded was $665.4M as of March 31, 2026 and $138.1M as of December 31, 2025, included within Payables to CMS on the Condensed Consolidated Balance Sheets.
• Cigna+Oscar run-off: The Company did not renew the Cigna+Oscar Small Group arrangement with Cigna Health and Life Insurance Company after its initial term ended on December 31, 2024; the Company continues to provide transition and run-off services through December 31, 2026 and continues to share in premiums and claims for plans sold or issued prior to December 15, 2024, reflected in the negative assumed premiums of ($984,000 for Q1 2026 versus $22.4M in Q1 2025.
• Other revenue recognition: Other revenues — including Marketplace Subsidiaries, +Oscar platform fees, virtual credit card rebates, and sublease income — are recognized when performance obligations are satisfied; deferred revenue is recorded to Accounts payable and other liabilities when payment is received before obligations are satisfied.

• Net investment income: Rose to $60.6M for the three months ended March 31, 2026 from $46.1M in the prior-year period, driven by cash equivalents income of $33.6M (vs. $18.6M) and fixed maturity securities income of $27.4M (vs. $27.2M), partially offset by investment expense of $520,000; the 'Other' component represents net interest earned on funds withheld.
• Accrued investment income: $23.1M as of March 31, 2026, up from $20.2M as of December 31, 2025.
• AFS portfolio size and composition: Total available-for-sale securities had an amortized cost of $3.3B and fair value of $3.3B as of March 31, 2026 (vs. amortized cost of $2.7B and fair value of $2.7B as of December 31, 2025), with U.S. treasury and agency securities ($2.1B fair value), certificates of deposit ($650M), and corporate notes ($483.4M) comprising the largest categories; net unrealized gains narrowed to $5M ($8.5M gains, $3.5M losses) from $18M at year-end.
• Gross unrealized loss positions: As of March 31, 2026, 270 securities (fair value $1B, losses $3.3M) were in a loss position for less than 12 months and 3 securities (fair value $30M, losses $214,000) for 12 months or longer; the Company determined no allowance for credit losses is necessary, as declines in fair value are believed to be due to market fluctuations and not credit-related events.
• Maturity profile: As of March 31, 2026, $2B amortized cost ($2B fair value) of fixed maturity securities are due in one year or less, $1.2B ($1.2B fair value) due after one year through five years, and $90.8M ($90.7M fair value) due after five years through ten years; actual maturities may differ from contractual maturities due to call or prepayment provisions.

• Hierarchy methodology: Assets are categorized into a three-level fair value hierarchy; Level 1 uses quoted unadjusted prices in active markets, Level 2 uses observable inputs for similar or identical instruments, and Level 3 uses unobservable inputs significant to the measurement — no Level 3 assets or liabilities were present in either period.
• Total assets at fair value: Total recurring fair-value assets were $3.4B as of March 31, 2026, up from $2.7B as of December 31, 2025, with the increase driven primarily by a new $650M Level 1 certificates of deposit position and higher cash equivalents ($136.3M Level 1 plus $1.8M Level 2 vs. $49.6M all Level 1 at year-end).
• Investment composition: As of March 31, 2026, the largest investment categories were U.S. treasury and agency securities ($2.1B, Level 2), corporate notes ($483.4M, Level 2), certificates of deposit ($650M, Level 1), asset-backed securities ($28.3M, Level 2), and restricted U.S. treasury securities ($4.5M, Level 2).

Purpose of restrictions: Restricted deposits are pledged to various state agencies in connection with insurance licensure or property leases, and are included in Restricted deposits on the Condensed Consolidated Balance Sheets.

• Methodology: Reserves for medical claims expenses are estimated using actuarial assumptions and recorded as Benefits payable liabilities; assumptions and resulting liabilities are reviewed each period with any adjustments reflected in the Condensed Consolidated Statements of Operations in the period estimates are updated.
• Balance growth: Total benefits and CAE payable (gross) rose from $1.5B at the end of Q1 2025 to $1.8B at the end of Q1 2026; net of reinsurance recoverable, the ending balance grew from $1.5B to $1.7B over the same comparison.
• Claims incurred: Total net claims incurred and CAE for the three months ended March 31, 2026 were $3.2B, up from $2.3B in the three months ended March 31, 2025; current-year Benefits Payable claims incurred net were $3.4B in 2026 vs. $2.4B in 2025.
• Favorable prior-period development: Prior-year Benefits Payable claims incurred showed favorable development of ($151.3M) in the three months ended March 31, 2026 (vs. ($117.9M) in Q1 2025), resulting primarily from lower than expected paid claims for 2025; reinsurance recoverable increased from $26.5M at the beginning of Q1 2026 to $48.4M at period end.

• Program mechanics: Risk adjustment is administered federally by CMS; plans with lower-than-average risk scores pay into the pool (reported as Payables to CMS on the balance sheet) while plans with higher-than-average risk scores receive distributions (reported as Receivables from CMS), with final CMS reporting potentially up to twelve months in arrears.
• Net payable position: The net risk adjustment payable grew from $2.5B at the start of Q1 2026 to $4B at March 31, 2026, driven by a current-year accrual of $1.4B and a prior-year adjustment of $84.6M.
• Year-over-year comparison: The net change in accrual for the three months ended March 31, 2026 was $1.4B, versus $373.8M for the three months ended March 31, 2025 — the 2026 quarter reflected lower claims per member with an assumption of higher offsetting risk adjustment payables, as compared to the three months ended March 31, 2025.
• RADV inclusion: Beginning balances include risk adjustment data validation (RADV) receivables and payables, and prior-year change in accrual includes immaterial payments for prior policy years.

• 2031 Notes outstanding: As of March 31, 2026, $35M aggregate principal amount of the 2031 Notes remained outstanding, with a net carrying amount of $33.5M and an estimated fair value of $57.8M (Level 3); the notes bear interest at 7.25% per annum, mature December 31, 2031, and are initially convertible into Class A common stock at approximately $8.32 per share. During Q1 2026, the Class A common stock sale price condition was satisfied (last reported price exceeded 130% of the conversion price for 20 of 30 consecutive trading days), permitting holders to elect conversion during Q2 2026.
• 2030 Notes outstanding: As of March 31, 2026, $410M aggregate principal amount of the 2030 Notes remained outstanding, with a net carrying amount of $397.4M and an estimated fair value of $366.3M (Level 2); the notes bear interest at 2.25% per annum and mature September 1, 2030. The 2030 Notes were originally subordinated to the 2031 Notes but, as of November 5, 2025, ceased to be subordinated following the Exchange Agreement and related transactions.
• Interest expense: Total interest expense for the three months ended March 31, 2026 was $3.7M, comprising $2.9M in coupon interest and $781,000 in amortization of debt discount and issuance costs, compared to $5.7M in the prior-year period ($5.5M coupon + $194,000 amortization).
• Revolving Credit Facility and Capped Calls: On February 6, 2026, the Company entered into a $475M secured three-year revolving credit facility with JPMorgan Chase Bank, N.A. as administrative agent, expiring February 6, 2029, with an option to increase commitments by up to an additional $100M; borrowings initially bear interest at Term SOFR plus 4.50% or Alternate Base Rate plus 3.50%, with no borrowings outstanding as of March 31, 2026. In connection with the 2030 Notes, the Company entered into Capped Call Transactions at a total cost of approximately $34.4M.

• Reinsurance structure: The Company participates in quota share reinsurance (multiple counterparties, multiple state-level treaties) and XOL reinsurance (private counterparty and federal/state-run programs); the Cigna+Oscar Small Group arrangement expired December 31, 2024 and the Company will continue transition and run-off services through December 31, 2026, sharing proportionally in all premiums and claims for plans sold or issued on or before December 15, 2024.
• Deposit accounting (quota share): Quota share arrangements not meeting risk transfer requirements are recorded as financing transactions; the deposit liability was $154.2M as of March 31, 2026 vs. $140.5M as of December 31, 2025, and the deposit accounting impact net of ceding commission recognized within Selling, general, and administrative expenses was $21.9M for the three months ended March 31, 2026 vs. $11.3M for the three months ended March 31, 2025; the cession rate under these contracts was 47% for Q1 2026 vs. 50% for Q1 2025.
• Medical expenses reconciliation: Direct claims incurred were $3.3B (Q1 2026) vs. $2.3B (Q1 2025); after ceded reinsurance claims of ($62.7M) and ($31M), and assumed reinsurance claims of ($1.3M) and $22.4M, respectively, net Medical expenses were $3.2B (Q1 2026) vs. $2.3B (Q1 2025).
• Reinsurance recoverable: The balance grew to $142.5M as of March 31, 2026 from $99.8M as of December 31, 2025, composed of reinsurance premium and claim recoverables ($140.8M vs. $98M), ceding commissions ($7M vs. $7M), and experience refunds of ($5.3M) in both periods; reinsurers have most recently been issued financial strength ratings of A+ or higher.

• Dragoneer note exchange: In November 2025, Dragoneer exchanged all $250M of its 2031 Notes for approximately 30.1 million shares of Class A common stock and an inducement payment of approximately $17.8M ($4.4M in cash and $13.3M settled through the issuance of approximately 0.7 million additional shares of Class A common stock); as of November 5, 2025, the debt covenants in the Investment Agreement were extinguished and the 2030 Notes ceased to be subordinated to the 2031 Notes.
• CEO stock purchase: On April 3, 2026, the Company sold 1,000,000 shares of Class A common stock to Mark T. Bertolini, the Company's Chief Executive Officer, for an aggregate purchase price of $11.9M at $11.92 per share (the NYSE closing price on the preceding trading date), with no underwriting discounts or commissions, in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

Legal Proceedings

• Common Ground Healthcare Cooperative v. United States (Case No. 17-877, settlement final approval Nov 6, 2025): Class action against federal government for halted ACA CSR subsidies; settlement fully executed Aug 11, 2025, with 95% of funds ordered distributed; Company's estimated net recovery recorded as of December 31, 2025 was approximately $48M, subsequently received in April 2026.
• State and federal regulatory reviews (ongoing): Company subject to reviews by state insurance, healthcare, and federal regulators covering claims payment, risk adjustment, network adequacy, and sales practices, historically resulting in fines and practice changes; additional sanctions possible.

• Single reportable segment: The Company operates and reports as a single reportable segment; the CODM (Chief Executive Officer) reviews Net income (loss) attributable to Oscar Health, Inc. and Earnings from operations on a consolidated basis to allocate resources and evaluate financial performance.
• Segment assets: The CODM does not evaluate performance or allocate resources based on segment asset data; therefore, total segment assets are not presented.
• Significant customer concentration: The Company generates the majority of its total revenue from health insurance policy premiums, primarily from subsidies received from CMS as part of the Advanced Premium Tax Credit program.

• Business description: Oscar is a healthcare technology company offering ACA-based coverage for individuals, families, and employees, and health technology solutions through its +Oscar platform, built on a full-stack technology platform since its 2012 founding.
• Membership growth: Approximately 3.2 million effectuated members as of March 31, 2026, representing an approximately 56% increase compared to March 31, 2025.
• Marketplace Subsidiaries: Oscar wholly owns three businesses operating in the individual market — Lucie, Inc. (technology enrollment platform), Trove Group Inc. (insurance agency selling individual medical and supplemental health products), and HealthInsurance.org, LLC (lead generation and educational content site).
• Key performance metrics: Management regularly reviews total revenue, MLR, SG&A expense ratio, earnings from operations, and net income attributable to Oscar Health, Inc. to evaluate performance and make strategic decisions.

Revenue components: Total revenue consists of premium revenue (net of risk adjustment transfers), investment income, and other revenues.

• Management's view: Management considers total revenue an important metric for assessing business growth and the earnings potential of the investment portfolio.

MLR definition: MLR measures medical expenses as a % of net premiums before ceded quota share reinsurance, with the federal risk adjustment program's impact included in the denominator; management describes it as an important metric for demonstrating the ratio of costs to pay for member healthcare relative to net premium before ceded quota share reinsurance.

• eAPTC expiration: The enhanced Advanced Premium Tax Credits (eAPTCs) in place since 2021 expired at the end of 2025, which the Company believes caused coverage to become unaffordable for some individuals, reducing both overall participation in the Health Insurance Marketplaces and the Company's membership since the end of the 2026 open enrollment period (OEP).
• Program Integrity Rules and OBBBA: CMS issued a rule on June 25, 2025 creating stricter APTC eligibility verification, shorter OEPs, and suspension of certain special enrollment periods (SEPs); the One Big Beautiful Bill Act signed July 4, 2025 further limits APTC eligibility for certain populations and requires additional verification procedures. A federal district court in Maryland issued a nationwide stay on several provisions of the Program Integrity Rules on August 22, 2025 (City of Columbus vs. Kennedy), and the stayed provisions were not in effect during the 2026 OEP; it is unclear whether the stay will be lifted during 2026.
• Proposed 2027 NBPP: HHS published a proposed Notice of Benefit and Payment Parameters for policy year 2027 on February 11, 2026 (not yet final as of the filing date), which reintroduces stricter income verification rules, removes the option to accept income attestations when IRS tax data is unavailable, and — beginning in policy year 2027 for federal marketplaces and 2028 for state marketplaces — would deem a tax filer ineligible for APTCs if they received APTCs in a prior year but failed to file a federal income tax return to reconcile eligibility.
• Membership outlook: The Company expects that the eAPTC expiration, Program Integrity Rules, and OBBBA could continue to negatively impact the size of the Health Insurance Marketplaces and the Company's membership in future years, with any resulting market contraction potentially negatively impacting market morbidity.

• 100% tariff on patented pharmaceuticals: On April 2, 2026, the Trump administration issued a proclamation under Section 232 of the Trade Expansion Act imposing 100% tariffs on patented pharmaceuticals and associated pharmaceutical ingredients imported into the United States, effective July 31, 2026, unless manufacturers agree to specific government drug pricing deals or commit to shifting production and R&D domestically.
• Rebate risk to premiums: While the tariffs may pressure drug manufacturers to reduce list prices, the company warns there could be a corresponding or even disproportionate decrease in pharmaceutical rebates it negotiates and typically receives; since rebate expectations are factored into its premium pricing strategy, a reduction in rebates that outpaces any decline in underlying drug costs could adversely impact earnings from operations and increase its MLR.
• Broader medical cost volatility: The company states that tariffs and uncertainty around their implementation could introduce volatility across its medical cost structure, including higher costs for medical providers and facilities, higher pharmaceutical and medical device prices, higher costs of supplies, and potential shortages of medicines and medical supplies that may also impair member health and drive higher medical costs.
• Estimation risk: The unprecedented nature of these tariffs and uncertainty around their implementation could impair the company's ability to accurately estimate and effectively manage the impact on medical expenses, which could adversely affect results of operations and financial position.

• Critical accounting estimates: No significant changes from what was reported in the Annual Report on Form 10-K for the year ended December 31, 2025.

• Premium revenue composition: Premium revenue includes federal government premium subsidies, direct member policy premiums, and assumed policy premiums earned under the Cigna+Oscar Small Group reinsurance arrangement, net of risk adjustment transfers and ceded premium from reinsurance contracts.
• Recognition policy: The Company recognizes a fixed premium per member per month during the period it is obligated to provide services; direct policy premiums are recognized based on membership and eligibility criteria provided by CMS and are subject to monthly retroactive adjustment, recorded net of expected premium returns to CMS due to member disenrollments from non-payment or CMS-initiated removals related to program integrity and fraud, waste and abuse requirements.
• Cigna+Oscar Small Group: The Company did not renew the Cigna+Oscar Small Group arrangement after the expiration of the initial term on December 31, 2024.

Investment income composition: Investment income consists of investment income, interest earned, and gains (losses) on the company's investment portfolio.

• Composition: Other revenues include revenue earned through Marketplace Subsidiaries, fees for services performed via the +Oscar platform, revenue sharing from virtual credit card rebates, and sublease income.

• Medical expense composition: Medical expense consists of paid and unpaid medical expenses, including fee-for-service claims, pharmacy benefits, capitation payments to providers, disputed provider claims, and various other medical-related costs; under fee-for-service arrangements, the company retains financial responsibility for care provided and incurs costs based on actual utilization of hospital and physician services.
• Claims recognition and reserves: Medical claims are recognized in the period healthcare services are provided; unpaid medical expenses (benefits payable or claim reserves) include claims reported and in settlement as well as incurred but not yet reported costs, estimated using actuarial methodologies that consider claim payment patterns, medical cost inflation, historical developments such as claim inventory levels and receipt patterns, and other relevant factors, with any adjustments reflected in the period determined.
• Reinsurance impact: Medical expense also reflects the net impact of ceded reinsurance claims from reinsurance contracts accounted for under reinsurance accounting.

SG&A composition: Selling, general, and administrative expenses primarily include distribution and servicing costs, premium taxes, exchange fees, other taxes and fees, employee-related expenses, costs of software and hardware, stock-based compensation, the impact of quota share reinsurance, and other administrative costs.

Composition: Other expenses (income) consists primarily of miscellaneous expenses or income not core to operations, including profit sharing arrangements with co-branded health plans and changes in the fair value of financial instruments.

Income tax expense (benefit): Consists of changes to current and deferred federal and state tax assets and liabilities; deferred tax assets and liabilities are recorded based on differences between the book and tax bases of assets and liabilities, calculated by applying current tax rates and laws to taxable years in which such differences are expected to reverse.

• Revenue growth: Total revenue grew from $3B in Q1 2025 to $4.6B in Q1 2026, driven primarily by Premium revenue which expanded from $3B to $4.6B year-over-year.
• Investment income: Investment income increased from $46.1M to $60.6M, while Other revenues rose modestly from $4.3M to $5.7M.

• MLR: Medical loss ratio improved to 70.5% from 75.4% in the prior-year period.
• SG&A ratio: SG&A expense ratio improved to 15.2% from 15.8% in the prior-year period.

• Premium revenue growth: Premium revenue increased $1.6B, or 53%, for the three months ended March 31, 2026, compared to the same period in 2025, driven by higher membership and premium rate increases, partially offset by an increase in the net risk adjustment transfer accrual.
• Membership growth: As of March 31, 2026, membership increased by 1.1 million, or 56% compared to March 31, 2025, primarily driven by above market growth during the 2026 OEP; the Company no longer offers small group plans effective December 15, 2024, and did not renew the Cigna+Oscar Small Group arrangement after its initial term ended on December 31, 2024.
• Investment income: Investment income increased $14.5M, or 31%, for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to higher invested assets, offset by lower yield.

• Medical expense growth: Medical expenses increased $970,200 million, or 43%, for the three months ended March 31, 2026 vs. the same period in 2025, driven primarily by increased membership, partially offset by modestly lower medical cost trend.
• MLR improvement drivers: MLR decreased for the three months ended March 31, 2026 vs. the same period in 2025, primarily due to disciplined pricing strategy, claims and risk adjustment seasonality from metal and new member mix, and favorable prior period reserve development.

• SG&A expense growth: Selling, general, and administrative expenses increased $223.5M, or 46%, for the three months ended March 31, 2026 vs. the same period in 2025, driven by higher membership year over year resulting in higher volume-driven costs such as taxes and fees and broker commissions.
• SG&A expense ratio: The SG&A expense ratio decreased 60 basis points to 15.2% for the three months ended March 31, 2026, compared to 15.8% for the same period in 2025, primarily due to greater fixed cost leverage and disciplined cost management, partially offset by the impact of higher risk adjustment as a percentage of premium.

• Two-tier liquidity structure: Oscar maintains liquidity at the Health Insurance Subsidiaries level and at the Parent level separately; as of March 31, 2026, Health Insurance Subsidiaries held $7.8B in cash and investments (vs. $5.1B at December 31, 2025), of which $19.1M was on deposit with regulators as restricted deposits, while entities outside the Health Insurance Subsidiaries held $279.2M (vs. $414.2M at December 31, 2025), of which $9.6M was restricted.
• Statutory capital adequacy: Combined statutory capital and surplus of the Health Insurance Subsidiaries was estimated at approximately $1.7B as of March 31, 2026 (vs. approximately $1B at December 31, 2025), exceeding minimum RBC requirements by an estimated $809M as of March 31, 2026 (vs. $356M as of December 31, 2025); the subsidiaries may face additional capital requirements due to membership growth, medical cost increases, or risk adjustment changes, which Parent would be required to fund if subsidiary excess capital is insufficient.
• Intercompany capital flows (Q1 2026): Parent received approximately $300M in capital distributions from the Health Insurance Subsidiaries and subsequently made $425.5M of capital contributions back to the Health Insurance Subsidiaries, including $300M to fund a new subsidiary, Oscar Health Maintenance Organization of Florida, Inc.; no such intercompany distributions or contributions occurred in Q1 2025.
• Quota share reinsurance capital relief: The Health Insurance Subsidiaries use quota share reinsurance to reduce minimum capital requirements; absent these arrangements, the subsidiaries would have been required to hold approximately $1.1B of additional capital as of March 31, 2026 (vs. approximately $683.1M as of December 31, 2025).

• Short-term obligations: Cash requirements within the next twelve months include benefits payable, risk adjustment transfer payables, current lease liabilities, interest payable on debt, other current liabilities, and other obligations.
• Funding sources: These obligations are expected to be funded primarily by cash available for general corporate use, cash flows from current operations, and/or the realization of current assets such as accounts receivable.
• Liquidity adequacy: Based on its current forecast, management believes the Company's cash, cash equivalents, and investments (excluding restricted cash) will be sufficient to fund operating requirements for at least the next twelve months.

• Long-term obligations: Long-term cash requirements consist primarily of operating leases, with cash expected to be generated through future cash flows from operations; timing details are referenced in Note 13 - Leases of the Annual Report on Form 10-K for the year ended December 31, 2025.
• 2031 Convertible Senior Notes: In February 2022, the Company issued $305M in aggregate principal amount of convertible senior notes due December 31, 2031, bearing interest at 7.25% per annum payable semi-annually on June 30 and December 31; as of March 31, 2026, $35M aggregate principal amount remained outstanding.
• Note purchasers: The 2031 Notes were placed in a private placement to funds affiliated with or advised by Dragoneer Investment Group, LLC, Thrive Capital, LionTree Investment Management, LLC, and Tenere Capital LLC, with an Investment Agreement entered January 27, 2022 and an indenture with U.S. Bank as Trustee entered February 3, 2022.

• Issuance terms: On September 18, 2025, the Company issued $410M aggregate principal amount of convertible senior notes due 2030, accruing interest at 2.25% per annum payable semi-annually on March 1 and September 1 each year beginning March 1, 2026, and maturing September 1, 2030 unless earlier repurchased, redeemed, or converted.
• Capped Call Transactions: In connection with the offering, the Company entered into Base Capped Call Transactions on September 15, 2025 and Additional Capped Call Transactions on September 16, 2025 with the Option Counterparties, covering the aggregate number of shares of Class A common stock initially underlying the 2030 Notes and expected to reduce potential dilution and/or offset cash payments in excess of principal upon conversion, subject to a cap based on the cap price.
• Subordination change: As of November 5, 2025, in connection with the Exchange Agreement and related transactions, the 2030 Notes ceased to be subordinated to the 2031 Notes.

• Operating cash flow: Net cash provided by operating activities was $2.6B for the three months ended March 31, 2026, compared with $900M for the same period in 2025, with the increase primarily due to higher premiums received, partially offset by higher claim disbursements.
• Investing cash flow: Net cash used in investing activities was $590.3M for the three months ended March 31, 2026, compared to $174.2M for the same period in 2025, with the increase primarily driven by higher investment purchases.
• Financing cash flow: Net cash used in financing activities was $3.6M for the three months ended March 31, 2026, compared to net cash provided of $4.9M for the same period in 2025, with the change primarily due to new debt issuance costs and lower proceeds from stock option exercises.
• Cash flow timing risks: Significant periodic payments — including loss settlements, rebates from the pharmacy benefit manager, risk adjustment transfers, and reinsurance receipts — can cause material variability in operating cash flows across periods; substantial claims under insurance or reinsurance contracts could require large payments within short timeframes.