Oscar Health Inc. (OSCR) just delivered the kind of quarter that makes you wince—then wonder if management knows something the market doesn't. The health tech insurer reported fourth-quarter revenue of roughly $2.81 billion on Tuesday, up from $2.39 billion a year ago but falling short of the $3.12 billion Wall Street was expecting.

For the full fiscal year 2025, total revenue hit approximately $11.7 billion compared to $9.2 billion the prior year. The growth came from higher membership, though it was partially offset by an increase in the net risk adjustment transfer accrual—which is insurance-speak for "we had to set aside more money because our members were sicker than expected."

That's exactly what showed up in the medical loss ratio, which measures how much of premium revenue goes to actual medical care. It climbed to 95.4% for the quarter from 88.1% a year ago. The jump was primarily driven by higher average market morbidity that resulted in an increase in the net risk adjustment transfer accrual, plus higher utilization that risk adjustment didn't fully offset.

The company posted a loss of $1.24 per share, missing consensus estimates of 89 cents. Loss from operations widened to $333.75 million from $147.73 million a year ago, driven by those same morbidity and utilization headwinds. Adjusted EBITDA loss came in at $101.5 million for the quarter, an improvement from the $307.78 million loss previously.

There was some good news in the operational metrics. The SG&A expense ratio improved to 18.2% from 19.5%, thanks to greater fixed cost leverage, lower exchange fee rates, and disciplined cost management—partially offset by higher risk adjustment as a percentage of premium.

And here's where things get interesting: total membership jumped from 1.68 million to 2.04 million in the quarter. That's substantial growth, and it's the foundation for management's optimistic outlook.

"2025 was a reset year for the individual market, and we took decisive actions to return to profitability in 2026," said CEO Mark Bertolini. "Our new suite of affordable products, agentic AI features, and exceptional member experience drove record-high membership – positioning us to achieve significantly improved financial performance in 2026."

Balance Sheet Reinforcements

Last week, Oscar announced a $475 million three-year revolving credit facility, giving the company more financial flexibility as it navigates the turnaround.

"We took opportunistic steps to strengthen our balance sheet and optimize our capital structure," said CFO Scott Blackley. "The transaction was well supported by a strong syndicate of top-tier banks and completed on favorable terms, further enhancing our balance sheet and providing additional flexibility to fuel long-term growth and accelerate consumer and employer adoption of the individual market."

The Big 2026 Bet

Here's where Oscar is asking investors to look past the mess and focus on the future. The company expects fiscal 2026 revenue between $18.7 billion and $19 billion—absolutely crushing the Wall Street estimate of $12.57 billion. That's not a small miss; that's a complete reset of expectations.

For 2026, Oscar is projecting a medical loss ratio of 82.4% to 83.4%, an SG&A expense ratio of 15.8% to 16.3%, and operating earnings of $250 million to $450 million. If they hit those numbers, it would represent a dramatic turnaround from the current quarter's losses.

Investors seem willing to give management the benefit of the doubt. OSCR shares were up 5.60% at $13.39 at the time of publication on Tuesday. The stock hit a high of $14.37 and dropped to a low of $13.01 during the session.