NeueHealth, Inc. (BHG)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 revenue was $225.991M, down 24.2% year over year and 7.8% sequentially as ACO REACH revenues declined with fewer aligned beneficiaries; Adjusted EBITDA remained positive at $3.962M, the second consecutive positive quarter .
• EPS (basic and diluted) was $(8.65), with $(6.42) from continuing operations; management reaffirmed full-year Adjusted EBITDA of $15–$25M and adjusted operating cost ratio ex-corporate of 15–16% .
• FY 2024 revenue guidance was lowered to ~$950M (from ~$1.0B), with segment guidance updated to NeueCare ~$320M (maintained at high end) and NeueSolutions ~$640M (lowered) .
• Management highlighted continued consumer growth and capital positioning; the call discussed a new term loan facility (up to $150M) with Hercules Capital and progress on ACA wind-down—potential catalysts alongside guidance reset and ongoing EBITDA improvement .

What Went Well and What Went Wrong

• What Went Well

  • Positive Adjusted EBITDA for the second consecutive quarter ($3.962M), demonstrating operating discipline and ongoing restructuring benefits .
  • Consumer metrics improved sequentially: value-based consumers served rose to 364k and enablement services lives to 113k as of June 30, 2024 .
  • CEO emphasized momentum in both segments and strong pipeline: “We continued to build momentum… delivering a seamless, more coordinated care experience… well-positioned for the future” .

• What Went Wrong

  • Revenue fell to $225.991M from $297.982M in Q2 2023 and $245.095M in Q1 2024 due to ACO REACH declines; adjusted operating cost ratio increased versus prior year (18.0% vs 16.1%) .
  • NeueCare recorded an operating loss of $(5.902)M in Q2, pressured by an $11.411M intangible impairment tied to held-for-sale classification .
  • EPS remained deeply negative; net loss from continuing operations was $(39.259)M as operating loss widened and ACO REACH revenues decreased .

Financial Results

*Values retrieved from S&P Global unavailable for this period due to data access constraints.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO framing: “We continued to build momentum in the second quarter, driving solid results in both our NeueCare and NeueSolutions segments as we deliver a seamless, more coordinated care experience to all populations… We believe we are well-positioned for the future with a strong pipeline in place to drive capital-efficient, sustainable growth in 2024 and beyond.” — Mike Mikan, President & CEO .
• CFO call highlights: “The NeueSolutions segment generated $152.1 million in revenue… We are reaffirming our expectation for full-year adjusted EBITDA of between $15 million and $25 million… consolidated revenue of approximately $950 million.” — Jay Matushak, CFO .
• Strategy emphasis: Focus on proactive consumer engagement and aligned interests of providers, payors, and consumers to deliver coordinated, personalized care .

Q&A Highlights

• Capital structure and liquidity: Details on new Hercules Capital term loan (up to $150M) and liquidity metrics, supporting execution of strategic priorities .
• ACA wind-down: Progress with $135M excess cash reserved and CMS prepayments; clarifies remaining timing and usage of funds .
• Guidance specifics: Reaffirmed Adjusted EBITDA range ($15–$25M) and updated revenue outlook ($~950M) with segment splits; consumer served expected 475k–500k .
• ACO REACH operations: Continued emphasis on care management and health equity for Medicare beneficiaries; operating metrics consistent with expectations .

Estimates Context

• S&P Global consensus for Q2 2024 could not be retrieved due to data access/mapping constraints; therefore explicit comparisons to Wall Street estimates are unavailable in this recap. If needed, we can refresh once access is restored and update beat/miss indicators (Values retrieved from S&P Global unavailable for this period).
• Given the updated revenue guidance (~$950M) and positive Adjusted EBITDA trajectory, consensus models may need to reduce revenue assumptions while holding EBITDA expectations near the prior range .

Key Takeaways for Investors

• Revenue compressed to $0.226B in Q2; ACO REACH volumes remain the primary headwind, but enablement and care delivery consumers are growing sequentially .
• Adjusted EBITDA remained positive for a second straight quarter ($4.0M), signaling operational progress despite top-line pressure; continued non-GAAP adjustments include share-based comp, held-for-sale operations, and impairment .
• Guidance reset: FY24 revenue reduced to ~$0.95B; segment mix shifts toward NeueCare at the high end while NeueSolutions is lowered—watch payer/provider pipeline execution to offset ACO REACH declines .
• Liquidity and capital: New term loan facility (up to $150M) enhances flexibility during wind-down and growth initiatives; monitor covenant terms and deployment .
• Segment divergence: NeueCare revenue up y/y and q/q but hit by impairment; NeueSolutions revenue declined with ACO REACH volumes—near-term narrative hinges on stabilizing aligned beneficiaries and expanding enablement services .
• Stock catalysts: Guidance revision (revenue lower, EBITDA maintained), consecutive positive EBITDA, and capital facility announcement may drive narrative shifts; follow-through on consumer growth and cost control is critical .
• Action items: Track ACO REACH beneficiary trends, held-for-sale impacts, and bankruptcy-related adjustments; refresh consensus and estimate revisions post-guidance cut to calibrate expectations .

Sources Read

• Q2 2024 8-K and press release (full): Results, segment data, reconciliations, and FY 2024 guidance .
• Q1 2024 8-K (full) for prior-quarter trends and guidance baseline .
• Q4 2023 8-K (full) for prior-year context .
• Q2 2024 earnings call transcript and highlights via external sources .
• Related press release: Schedule of Q2 2024 earnings call .