# OSCR: Why the tape can ignore the Q4/FY25 “miss” and chase the FY26 inflection (based on company disclosures) ## Executive takeaway Oscar’s Feb. 10, 2026 earnings release frames **FY2025 as a “reset year”** and explicitly pitches **a return to profitability in 2026**, with **FY2026 revenue guided to $18.7–$19.0 billion** and **earnings from operations guided to $250–$450 million**. ["reset year"](0001568651-26-000008|2) ["Total Revenue (1) $18.7 billion"](0001568651-26-000008|2) ["Earnings from Operations (4) $250 million"](0001568651-26-000008|2) Given that setup, it’s plausible the market’s main debate is **not** whether Q4 came in light versus expectations (consensus isn’t in the filing), but whether **the FY26 margin guide is achievable**—especially the implied **MLR improvement** and **opex leverage** the company itself highlights in its FY26 outlook ranges. ["Medical Loss Ratio (2) 82.4%"](0001568651-26-000008|2) ["SG&A Expense Ratio (3) 15.8%"](0001568651-26-000008|2) --- ## 1) What actually happened in Q4 (per the disclosure): the quarter was ugly on profitability and MLR In Q4 2025, Oscar reported **total revenue of $2.805 billion** but **loss from operations of $333.7 million** and **net loss attributable to Oscar of $352.6 million** (GAAP), with **diluted EPS of $(1.24)**. ["Total revenue | $2,805,235"](0001568651-26-000008|2) ["Earnings (loss) from operations | $(333,747)"](0001568651-26-000008|2) ["Net income (loss) attributable to Oscar Health, Inc. | $(352,611)"](0001568651-26-000008|2) ["Diluted | $ | (1.24)"](0001568651-26-000008|2) The operational “tell” in the quarter is the **medical loss ratio (MLR) at 95.4%**, up from 88.1% in Q4 2024—i.e., the company is saying medical costs consumed an unusually high share of net premiums (before ceded quota share reinsurance, per its definition). ["Medical loss ratio | 95.4%"](0001568651-26-000008|2) ["Medical loss ratio (MLR) is a metric"](0001568651-26-000008|2) So even without referencing Street expectations, the filing itself supports the idea that Q4 was “messy”: **high MLR + operating loss + large GAAP net loss**. ["Medical loss ratio | 95.4%"](0001568651-26-000008|2) ["Earnings (loss) from operations | $(333,747)"](0001568651-26-000008|2) ["Net income (loss) attributable to Oscar Health, Inc. | $(352,611)"](0001568651-26-000008|2) ### The deeper FY25 setup: FY25 profitability rolled over vs FY24 For the full year 2025, Oscar disclosed **total revenue of $11.701 billion**, **loss from operations of $396.4 million**, and **net loss attributable to Oscar of $443.2 million** (diluted EPS **$(1.69)**). ["Total revenue | $11,701,427"](0001568651-26-000008|2) ["Loss from operations was $396.4 million"](0001568651-26-000008|2) ["Net loss attributable to Oscar Health, Inc. was $443.2 million"](0001568651-26-000008|2) ["$(1.69) of diluted earnings per share"](0001568651-26-000008|2) Management attributes the FY25 MLR deterioration primarily to **higher average market morbidity** (flowing through **risk adjustment transfer accruals**) plus **higher utilization not fully offset by risk adjustment**. ["higher average market morbidity"](0001568651-26-000008|2) ["increase in the net risk adjustment transfer accrual"](0001568651-26-000008|2) ["higher utilization that was not fully offset by risk adjustment"](0001568651-26-000008|2) That matters for the “market is buying FY26, not Q4” framing: **the company is effectively telling investors FY25 was impacted by market-level morbidity/risk adjustment dynamics**, while FY26 is positioned as the year where actions taken (pricing/product/cost) show up in margins. ["2025 was a reset year"](0001568651-26-000008|2) ["took decisive actions to return to profitability in 2026"](0001568651-26-000008|2) --- ## 2) The FY26 guide is doing the heavy lifting: it implies a sharp underwriting + operating swing Oscar’s FY26 outlook calls for: - **Revenue: $18.7–$19.0 billion**. ["Total Revenue (1) | $18.7 billion"](0001568651-26-000008|2) - **MLR: 82.4%–83.4%** (down dramatically from FY25’s 87.4%). ["Medical Loss Ratio (2) | 82.4%"](0001568651-26-000008|2) ["The medical loss ratio was 87.4% for the full year 2025"](0001568651-26-000008|2) - **SG&A ratio: 15.8%–16.3%** (better than FY25’s 17.5%). ["SG&A Expense Ratio (3) | 15.8%"](0001568651-26-000008|2) ["SG&A expense ratio was 17.5% for the full year 2025"](0001568651-26-000008|2) - **Earnings from operations: $250–$450 million** (versus FY25 operating loss of $396.4 million). ["Earnings from Operations (4) | $250 million"](0001568651-26-000008|2) ["Loss from operations was $396.4 million for the full year 2025"](0001568651-26-000008|2) ### Why that can dominate the narrative If investors believe the guide, they’re effectively underwriting **a step-change in margin structure**, not just a modest recovery: - **Underwriting improvement**: moving from **87.4% FY25 MLR** to **~82–83% in FY26** is the core claim that “reset” dynamics reverse. ["The medical loss ratio was 87.4%"](0001568651-26-000008|2) ["Medical Loss Ratio (2) | 82.4%"](0001568651-26-000008|2) - **Operating leverage**: the company is also guiding to lower **SG&A ratio** (15.8%–16.3%), which suggests scale benefits and/or expense discipline as revenue grows. ["SG&A Expense Ratio (3) | 15.8%"](0001568651-26-000008|2) Put differently: Q4 is a datapoint about **how bad 2025 got**; FY26 guidance is a statement about **how good 2026 can get**. The market reaction you describe is consistent with that style of “inflection-year” setup, but whether it’s *right* depends on the durability of the drivers below. ["reset year"](0001568651-26-000008|2) ["return to profitability in 2026"](0001568651-26-000008|2) --- ## 3) Key question: is the FY26 MLR guide believable given what Oscar says drove FY25? Oscar’s own explanation for FY25 MLR pressure centers on morbidity, risk adjustment, and utilization. ["higher average market morbidity"](0001568651-26-000008|2) ["increase in the net risk adjustment transfer accrual"](0001568651-26-000008|2) ["higher utilization"](0001568651-26-000008|2) So the analytical hinge is: **what changes between FY25 and FY26 in those same variables?** The filing doesn’t provide a full bridge, but it does give a directional “management intent” narrative: - CEO explicitly says they **“took decisive actions to return to profitability in 2026”** and links product/tech initiatives to improved performance. ["took decisive actions"](0001568651-26-000008|2) - The FY26 guide bakes in substantially better ratios (MLR and SG&A), which implies either (a) pricing adequacy improves, (b) market morbidity normalizes, (c) risk adjustment becomes less punitive vs accruals, (d) utilization moderates and/or unit cost management improves, or (e) some mix of the above. (These are analytical interpretations of the guide, not explicit company statements.) ["Medical Loss Ratio (2) | 82.4%"](0001568651-26-000008|2) ["SG&A Expense Ratio (3) | 15.8%"](0001568651-26-000008|2) **My read:** the guide is “buyable” only if you accept that the FY25 drivers were transitory and/or addressable through pricing and operating actions. The company itself flags uncertainty around its ability to **accurately estimate incurred medical expenses or overall market morbidity** and around **risk adjustment programs** in its forward-looking cautionary language—i.e., it highlights precisely the variables that must cooperate for the FY26 MLR range to hold. ["accurately estimate our incurred medical expenses or overall market morbidity"](0001568651-26-000008|2) ["changes to, risk adjustment programs"](0001568651-26-000008|2) --- ## 4) Revenue guide: what it implies, and one “definition risk” to keep in mind The headline says Oscar achieved **“Record Membership of ~3.4 Million”**. ["Record Membership of ~3.4 Million"](0001568651-26-000008|2) But the same release’s “Membership by Offering” table shows **Total Members of 2,042,449 as of Dec. 31, 2025**. ["Total Members (2) | 2,042,449"](0001568651-26-000008|2) That discrepancy doesn’t mean either number is “wrong,” but it *does* mean you should be careful about **definitions** (e.g., “membership” could be measured differently than “Total Members” in that specific table, or could include other populations/timeframes; the release doesn’t reconcile those two figures in the excerpt provided). ["Achieves Record Membership"](0001568651-26-000008|2) ["Total Members (2)"](0001568651-26-000008|2) On revenue, Oscar defines “total revenue” for the guidance table as including **premium revenue (net of risk adjustment transfers), investment income, and other revenues**. ["Total revenue includes premium revenue (net of risk adjustment transfers), investment income, and other revenues"](0001568651-26-000008|2) **My read:** because revenue is guided on a definition that is explicitly *net of risk adjustment transfers* at the premium line, and because FY25 commentary emphasizes risk adjustment accrual dynamics, investors should treat revenue growth and margin improvement as intertwined—not independent. That can amplify both upside (if risk adjustment/MLR behave) and downside (if they don’t). ["net of risk adjustment transfers"](0001568651-26-000008|2) ["increase in the net risk adjustment transfer accrual"](0001568651-26-000008|2) --- ## 5) “Operating earnings” / “operating earnings” guide: what it is (and isn’t) Your note references “operating earnings.” Oscar’s guidance table uses **“Earnings from Operations”** and defines it as **total revenue less total operating expenses**, calling it an important primary metric for assessing operating performance. ["Earnings from operations is the Company's total revenue less total operating expenses"](0001568651-26-000008|2) That’s a GAAP-like operating measure conceptually (though still in “guidance summary” form), and it is distinct from **Adjusted EBITDA**, which the company also reports and defines as net income (loss) adjusted for items including interest, taxes, D&A, stock-based compensation, and other items. ["Adjusted EBITDA is defined as Net income (loss)"](0001568651-26-000008|2) **My read:** investors may prefer the **operating earnings (earnings from operations)** guide here because it speaks directly to underwriting + overhead economics and is less susceptible (than EBITDA) to financing/tax/adjustment debates. But the real sensitivity remains the MLR assumption. ["Earnings from operations"](0001568651-26-000008|2) ["Medical Loss Ratio (2)"](0001568651-26-000008|2) --- ## 6) Balance sheet / liquidity angle: the revolver announcement is a quiet support for the “2026 execution” story Oscar disclosed that on Feb. 6, 2026 it entered into a **$475 million secured three-year revolving credit facility**, with the CFO framing it as strengthening the balance sheet and providing flexibility to fuel growth. ["entered into a $475 million secured three-year revolving credit facility"](0001568651-26-000008|2) ["providing additional flexibility"](0001568651-26-000008|2) **My read:** while a revolver doesn’t “fix” underwriting, it can reduce perceived tail risk around liquidity/capital flexibility during a turnaround year—making it easier for investors to focus on FY26 guidance rather than on near-term quarterly volatility. ["revolving credit facility"](0001568651-26-000008|2) --- ## 7) So, “market is buying the FY26 guide, not the Q4 miss”—my bottom-line read ### What I think the market is implicitly betting on (consistent with the disclosure) 1) **FY25 was the trough**, driven by morbidity/risk adjustment/utilization factors that management expects to improve or be offset in 2026. ["reset year"](0001568651-26-000008|2) ["higher average market morbidity"](0001568651-26-000008|2) 2) **Pricing/operational actions show up in 2026**, delivering the guided **~82–83% MLR** and **15.8–16.3% SG&A ratio**. ["Medical Loss Ratio (2) | 82.4%"](0001568651-26-000008|2) ["SG&A Expense Ratio (3) | 15.8%"](0001568651-26-000008|2) 3) The company can scale to **$18.7–$19.0B** revenue while flipping to **$250–$450M operating earnings**, which is a large swing vs FY25’s operating loss. ["$18.7 billion"](0001568651-26-000008|2) ["Earnings from Operations (4) | $250 million"](0001568651-26-000008|2) ["Loss from operations was $396.4 million"](0001568651-26-000008|2) ### What I would watch as “make-or-break” for the guide (using the company’s own risk framing) Oscar itself cautions that results could differ due to, among other things, its ability to **accurately estimate incurred medical expenses/market morbidity**, potential **changes in risk adjustment programs**, and the broader regulatory environment around the ACA marketplace. ["accurately estimate our incurred medical expenses or overall market morbidity"](0001568651-26-000008|2) ["changes to, risk adjustment programs"](0001568651-26-000008|2) ["evolving federal or state laws or regulations"](0001568651-26-000008|2) **My conclusion:** the “FY26 guide > Q4” trade makes sense *if* you believe the company’s 2026 outlook ranges are grounded in actionable pricing/product/cost changes rather than hope for a benign risk-adjustment/morbidity regime. The filing provides enough internal logic to explain why investors might lean into that inflection, but it also clearly flags that the same variables that hurt FY25 are the ones that can break FY26. ["took decisive actions"](0001568651-26-000008|2) ["subject to risks"](0001568651-26-000008|2) --- If you want, I can do a second pass that focuses purely on **how big the implied margin swing is** (still without tables), by translating the FY26 ratio ranges (MLR/SG&A) into an “implied operating margin” range and comparing it to FY25 (computed, with all inputs cited).

# OSCR: Why the tape can ignore the Q4/FY25 “miss” and chase the FY26 inflection (based on company disclosures) ## Executive takeaway Oscar’s Feb. 10, 2026 earnings release frames **FY2025 as a “reset year”** and explicitly pitches **a return to profitability in 2026**, with **FY2026 revenue guided to $18.7–$19.0 billion** and **earnings from operations guided to $250–$450 million**. ["reset year"](0001568651-26-000008|2) ["Total Revenue (1) $18.7 billion"](0001568651-26-000008|2) ["Earnings from Operations (4) $250 million"](0001568651-26-000008|2) Given that setup, it’s plausible the market’s main debate is **not** whether Q4 came in light versus expectations (consensus isn’t in the filing), but whether **the FY26 margin guide is achievable**—especially the implied **MLR improvement** and **opex leverage** the company itself highlights in its FY26 outlook ranges. ["Medical Loss Ratio (2) 82.4%"](0001568651-26-000008|2) ["SG&A Expense Ratio (3) 15.8%"](0001568651-26-000008|2) --- ## 1) What actually happened in Q4 (per the disclosure): the quarter was ugly on profitability and MLR In Q4 2025, Oscar reported **total revenue of $2.805 billion** but **loss from operations of $333.7 million** and **net loss attributable to Oscar of $352.6 million** (GAAP), with **diluted EPS of $(1.24)**. ["Total revenue | $2,805,235"](0001568651-26-000008|2) ["Earnings (loss) from operations | $(333,747)"](0001568651-26-000008|2) ["Net income (loss) attributable to Oscar Health, Inc. | $(352,611)"](0001568651-26-000008|2) ["Diluted | $ | (1.24)"](0001568651-26-000008|2) The operational “tell” in the quarter is the **medical loss ratio (MLR) at 95.4%**, up from 88.1% in Q4 2024—i.e., the company is saying medical costs consumed an unusually high share of net premiums (before ceded quota share reinsurance, per its definition). ["Medical loss ratio | 95.4%"](0001568651-26-000008|2) ["Medical loss ratio (MLR) is a metric"](0001568651-26-000008|2) So even without referencing Street expectations, the filing itself supports the idea that Q4 was “messy”: **high MLR + operating loss + large GAAP net loss**. ["Medical loss ratio | 95.4%"](0001568651-26-000008|2) ["Earnings (loss) from operations | $(333,747)"](0001568651-26-000008|2) ["Net income (loss) attributable to Oscar Health, Inc. | $(352,611)"](0001568651-26-000008|2) ### The deeper FY25 setup: FY25 profitability rolled over vs FY24 For the full year 2025, Oscar disclosed **total revenue of $11.701 billion**, **loss from operations of $396.4 million**, and **net loss attributable to Oscar of $443.2 million** (diluted EPS **$(1.69)**). ["Total revenue | $11,701,427"](0001568651-26-000008|2) ["Loss from operations was $396.4 million"](0001568651-26-000008|2) ["Net loss attributable to Oscar Health, Inc. was $443.2 million"](0001568651-26-000008|2) ["$(1.69) of diluted earnings per share"](0001568651-26-000008|2) Management attributes the FY25 MLR deterioration primarily to **higher average market morbidity** (flowing through **risk adjustment transfer accruals**) plus **higher utilization not fully offset by risk adjustment**. ["higher average market morbidity"](0001568651-26-000008|2) ["increase in the net risk adjustment transfer accrual"](0001568651-26-000008|2) ["higher utilization that was not fully offset by risk adjustment"](0001568651-26-000008|2) That matters for the “market is buying FY26, not Q4” framing: **the company is effectively telling investors FY25 was impacted by market-level morbidity/risk adjustment dynamics**, while FY26 is positioned as the year where actions taken (pricing/product/cost) show up in margins. ["2025 was a reset year"](0001568651-26-000008|2) ["took decisive actions to return to profitability in 2026"](0001568651-26-000008|2) --- ## 2) The FY26 guide is doing the heavy lifting: it implies a sharp underwriting + operating swing Oscar’s FY26 outlook calls for: - **Revenue: $18.7–$19.0 billion**. ["Total Revenue (1) | $18.7 billion"](0001568651-26-000008|2) - **MLR: 82.4%–83.4%** (down dramatically from FY25’s 87.4%). ["Medical Loss Ratio (2) | 82.4%"](0001568651-26-000008|2) ["The medical loss ratio was 87.4% for the full year 2025"](0001568651-26-000008|2) - **SG&A ratio: 15.8%–16.3%** (better than FY25’s 17.5%). ["SG&A Expense Ratio (3) | 15.8%"](0001568651-26-000008|2) ["SG&A expense ratio was 17.5% for the full year 2025"](0001568651-26-000008|2) - **Earnings from operations: $250–$450 million** (versus FY25 operating loss of $396.4 million). ["Earnings from Operations (4) | $250 million"](0001568651-26-000008|2) ["Loss from operations was $396.4 million for the full year 2025"](0001568651-26-000008|2) ### Why that can dominate the narrative If investors believe the guide, they’re effectively underwriting **a step-change in margin structure**, not just a modest recovery: - **Underwriting improvement**: moving from **87.4% FY25 MLR** to **~82–83% in FY26** is the core claim that “reset” dynamics reverse. ["The medical loss ratio was 87.4%"](0001568651-26-000008|2) ["Medical Loss Ratio (2) | 82.4%"](0001568651-26-000008|2) - **Operating leverage**: the company is also guiding to lower **SG&A ratio** (15.8%–16.3%), which suggests scale benefits and/or expense discipline as revenue grows. ["SG&A Expense Ratio (3) | 15.8%"](0001568651-26-000008|2) Put differently: Q4 is a datapoint about **how bad 2025 got**; FY26 guidance is a statement about **how good 2026 can get**. The market reaction you describe is consistent with that style of “inflection-year” setup, but whether it’s *right* depends on the durability of the drivers below. ["reset year"](0001568651-26-000008|2) ["return to profitability in 2026"](0001568651-26-000008|2) --- ## 3) Key question: is the FY26 MLR guide believable given what Oscar says drove FY25? Oscar’s own explanation for FY25 MLR pressure centers on morbidity, risk adjustment, and utilization. ["higher average market morbidity"](0001568651-26-000008|2) ["increase in the net risk adjustment transfer accrual"](0001568651-26-000008|2) ["higher utilization"](0001568651-26-000008|2) So the analytical hinge is: **what changes between FY25 and FY26 in those same variables?** The filing doesn’t provide a full bridge, but it does give a directional “management intent” narrative: - CEO explicitly says they **“took decisive actions to return to profitability in 2026”** and links product/tech initiatives to improved performance. ["took decisive actions"](0001568651-26-000008|2) - The FY26 guide bakes in substantially better ratios (MLR and SG&A), which implies either (a) pricing adequacy improves, (b) market morbidity normalizes, (c) risk adjustment becomes less punitive vs accruals, (d) utilization moderates and/or unit cost management improves, or (e) some mix of the above. (These are analytical interpretations of the guide, not explicit company statements.) ["Medical Loss Ratio (2) | 82.4%"](0001568651-26-000008|2) ["SG&A Expense Ratio (3) | 15.8%"](0001568651-26-000008|2) **My read:** the guide is “buyable” only if you accept that the FY25 drivers were transitory and/or addressable through pricing and operating actions. The company itself flags uncertainty around its ability to **accurately estimate incurred medical expenses or overall market morbidity** and around **risk adjustment programs** in its forward-looking cautionary language—i.e., it highlights precisely the variables that must cooperate for the FY26 MLR range to hold. ["accurately estimate our incurred medical expenses or overall market morbidity"](0001568651-26-000008|2) ["changes to, risk adjustment programs"](0001568651-26-000008|2) --- ## 4) Revenue guide: what it implies, and one “definition risk” to keep in mind The headline says Oscar achieved **“Record Membership of ~3.4 Million”**. ["Record Membership of ~3.4 Million"](0001568651-26-000008|2) But the same release’s “Membership by Offering” table shows **Total Members of 2,042,449 as of Dec. 31, 2025**. ["Total Members (2) | 2,042,449"](0001568651-26-000008|2) That discrepancy doesn’t mean either number is “wrong,” but it *does* mean you should be careful about **definitions** (e.g., “membership” could be measured differently than “Total Members” in that specific table, or could include other populations/timeframes; the release doesn’t reconcile those two figures in the excerpt provided). ["Achieves Record Membership"](0001568651-26-000008|2) ["Total Members (2)"](0001568651-26-000008|2) On revenue, Oscar defines “total revenue” for the guidance table as including **premium revenue (net of risk adjustment transfers), investment income, and other revenues**. ["Total revenue includes premium revenue (net of risk adjustment transfers), investment income, and other revenues"](0001568651-26-000008|2) **My read:** because revenue is guided on a definition that is explicitly *net of risk adjustment transfers* at the premium line, and because FY25 commentary emphasizes risk adjustment accrual dynamics, investors should treat revenue growth and margin improvement as intertwined—not independent. That can amplify both upside (if risk adjustment/MLR behave) and downside (if they don’t). ["net of risk adjustment transfers"](0001568651-26-000008|2) ["increase in the net risk adjustment transfer accrual"](0001568651-26-000008|2) --- ## 5) “Operating earnings” / “operating earnings” guide: what it is (and isn’t) Your note references “operating earnings.” Oscar’s guidance table uses **“Earnings from Operations”** and defines it as **total revenue less total operating expenses**, calling it an important primary metric for assessing operating performance. ["Earnings from operations is the Company's total revenue less total operating expenses"](0001568651-26-000008|2) That’s a GAAP-like operating measure conceptually (though still in “guidance summary” form), and it is distinct from **Adjusted EBITDA**, which the company also reports and defines as net income (loss) adjusted for items including interest, taxes, D&A, stock-based compensation, and other items. ["Adjusted EBITDA is defined as Net income (loss)"](0001568651-26-000008|2) **My read:** investors may prefer the **operating earnings (earnings from operations)** guide here because it speaks directly to underwriting + overhead economics and is less susceptible (than EBITDA) to financing/tax/adjustment debates. But the real sensitivity remains the MLR assumption. ["Earnings from operations"](0001568651-26-000008|2) ["Medical Loss Ratio (2)"](0001568651-26-000008|2) --- ## 6) Balance sheet / liquidity angle: the revolver announcement is a quiet support for the “2026 execution” story Oscar disclosed that on Feb. 6, 2026 it entered into a **$475 million secured three-year revolving credit facility**, with the CFO framing it as strengthening the balance sheet and providing flexibility to fuel growth. ["entered into a $475 million secured three-year revolving credit facility"](0001568651-26-000008|2) ["providing additional flexibility"](0001568651-26-000008|2) **My read:** while a revolver doesn’t “fix” underwriting, it can reduce perceived tail risk around liquidity/capital flexibility during a turnaround year—making it easier for investors to focus on FY26 guidance rather than on near-term quarterly volatility. ["revolving credit facility"](0001568651-26-000008|2) --- ## 7) So, “market is buying the FY26 guide, not the Q4 miss”—my bottom-line read ### What I think the market is implicitly betting on (consistent with the disclosure) 1) **FY25 was the trough**, driven by morbidity/risk adjustment/utilization factors that management expects to improve or be offset in 2026. ["reset year"](0001568651-26-000008|2) ["higher average market morbidity"](0001568651-26-000008|2) 2) **Pricing/operational actions show up in 2026**, delivering the guided **~82–83% MLR** and **15.8–16.3% SG&A ratio**. ["Medical Loss Ratio (2) | 82.4%"](0001568651-26-000008|2) ["SG&A Expense Ratio (3) | 15.8%"](0001568651-26-000008|2) 3) The company can scale to **$18.7–$19.0B** revenue while flipping to **$250–$450M operating earnings**, which is a large swing vs FY25’s operating loss. ["$18.7 billion"](0001568651-26-000008|2) ["Earnings from Operations (4) | $250 million"](0001568651-26-000008|2) ["Loss from operations was $396.4 million"](0001568651-26-000008|2) ### What I would watch as “make-or-break” for the guide (using the company’s own risk framing) Oscar itself cautions that results could differ due to, among other things, its ability to **accurately estimate incurred medical expenses/market morbidity**, potential **changes in risk adjustment programs**, and the broader regulatory environment around the ACA marketplace. ["accurately estimate our incurred medical expenses or overall market morbidity"](0001568651-26-000008|2) ["changes to, risk adjustment programs"](0001568651-26-000008|2) ["evolving federal or state laws or regulations"](0001568651-26-000008|2) **My conclusion:** the “FY26 guide > Q4” trade makes sense *if* you believe the company’s 2026 outlook ranges are grounded in actionable pricing/product/cost changes rather than hope for a benign risk-adjustment/morbidity regime. The filing provides enough internal logic to explain why investors might lean into that inflection, but it also clearly flags that the same variables that hurt FY25 are the ones that can break FY26. ["took decisive actions"](0001568651-26-000008|2) ["subject to risks"](0001568651-26-000008|2) --- If you want, I can do a second pass that focuses purely on **how big the implied margin swing is** (still without tables), by translating the FY26 ratio ranges (MLR/SG&A) into an “implied operating margin” range and comparing it to FY25 (computed, with all inputs cited).