Starling Oncology, Inc.

Total revenue in Q2 was $161.3 million versus $119.8 million a year ago, up 34.6% year over year. Gross profit was $27.2 million versus $17.5 million last year, and gross margin improved to 16.8% from 14.6%, up about 225 basis points. Adjusted EBITDA was $0.2 million versus a loss of $4.1 million a year ago. Specialty Pharmacy revenue was $98.6 million, up 57.6% year over year, with gross profit of $21.3 million and gross margin of 21.6%; Patient Services revenue was $58.8 million, up 5.3%, with gross profit of $2.1 million. For 2026, management raised revenue guidance to $650 million to $670 million, gross profit to $105 million to $110 million, and adjusted EBITDA to $2 million to positive $7 million; free cash flow guidance remained positive $5 million to positive $15 million. They also said they still expect about $150 million of capitation revenue for the year, and Q3 adjusted EBITDA is expected to be positive but muted at $500,000 to $1.5 million.

Dan Virnich framed the quarter as evidence that the business has reached a new stage, highlighting profitability, stronger operations, and a completed refinancing. He emphasized the rebrand to Starling Oncology as a better reflection of the company’s role as a national value-based oncology leader, and tied it to the launch of the Starling Nexus provider portal and broader growth initiatives. His tone was upbeat and confident, pointing to strong capitation momentum, continued Part D fill records, and an expected 100% increase in capitated revenue next year.

Rob Carter focused on the financial mechanics behind the quarter’s improvement and the refinancing. He said the company repaid the $86 million senior secured convertible note with a $75 million OrbiMed term loan plus about $11 million of cash, extending debt maturities from 2027 to 2031 without issuing equity. On operations, he cited MLR of 85.5% versus 71% a year ago, SG&A of $29.9 million or 18.6% of revenue, cash of $41.1 million at quarter-end, operating cash flow of $9.7 million for the six-month period, and free cash flow of $12.5 million in Q2. He also noted MLR is expected to run in the 80% to 90% range over the next 12 months, and that full-year guidance was raised for revenue and gross profit while adjusted EBITDA was narrowed because of a delayed launch and planned investment.

Analysts focused on the new Nevada and Oregon capitated contracts, the California exclusivity win, the higher MLR outlook, and the timing of the Florida contract delay. Management said the Nevada and Oregon contracts together represent about 80,000 lives and roughly $50 million in annualized capitated revenue, while the California exclusivity added about 230,000 capitated lives and an estimated $6 million in annualized capitation revenue plus Part D upside. They also said the Florida contract slipped from Q3 to Q4 due to payer-process delays, not contract issues, and that the new provider portal is already soft-launched with e-prescribing expected around September to early October. Management reiterated that 2027 capitation growth could be roughly double, but described the pipeline rather than giving a precise full-year 2027 target.