Executive Summary

Q4 revenue grew to $292.9M from $269.4M in Q3 and $227.7M in Q4’22, but Adjusted EBITDA turned to a loss of $(10.4)M as the quarter absorbed costs tied to an ACO REACH partner bankruptcy and other items .
Management completed the sale of the California Medicare Advantage business and rebranded to NeueHealth, refocusing on care delivery and provider enablement; served 461K consumers in 2023 (+294% YoY on a comparable basis) .
2024 guidance: ~$1.0B enterprise revenue, Adjusted Operating Cost Ratio 15–16%, and Adjusted EBITDA of $15–$25M, implying a return to profitability on a non-GAAP basis if executed .
Key catalyst path: tighter operating cost ratio and execution in NeueCare/NeueSolutions; risks center on ACO REACH dynamics (coding intensity) and fallout from a care partner bankruptcy that pressured 2023 results .

What Went Well and What Went Wrong

What Went Well
- Completed portfolio refocus (sold CA MA, exited IFP/MA outside CA), positioning the model around care delivery and provider enablement; CEO: “We achieved significant milestones…fully focusing on where we have proven to have the greatest impact” .
- Topline momentum: Q4 revenue $292.9M (+8.7% q/q; +28.6% y/y); 2023 revenue $1.161B (+55% y/y), with 461K consumers served across ACA, Medicare and Medicaid .
- Operating cost discipline: Operating Cost Ratio improved to 22.3% (from 26.9% in Q3); Adjusted Operating Cost Ratio improved to 16.1% (from 20.8% in Q3) .
What Went Wrong
- ACO REACH partner bankruptcy: Q4 included $8.7M of costs; total 2023 impact $36.5M; management highlighted associated headwinds, and external coverage noted Babylon-related gross margin pressure (~$14M in 2023) .
- Q4 Adjusted EBITDA slipped to $(10.4)M after two positive quarters (Q2/Q3), reflecting the above headwinds and non-cash/one-time noise elsewhere in 2023 .
- Elevated non-GAAP adjustments persisted in 2023 (e.g., goodwill impairment in Q3: $401.4M), complicating comparability and masking underlying operating trends .

Financial Results

Metric	Q2 2023	Q3 2023	Q4 2023
Revenue ($USD thousands)	$297,982	$269,399	$292,871
Net Loss from Continuing Operations ($USD thousands)	$(31,692)	$(479,305)	$(62,827)
Adjusted EBITDA ($USD thousands)	$6,413	$1,205	$(10,356)
Basic & Diluted EPS – Continuing Ops ($)	$(8.55)	$(72.52)	$19.54

Operating cost efficiency

Metric	Q2 2023	Q3 2023	Q4 2023
Operating Cost Ratio (%)	23.6%	26.9%	22.3%
Adjusted Operating Cost Ratio (%)	18.3%	20.8%	16.1%

Segment performance

Segment Revenue ($USD thousands)	Q2 2023	Q3 2023	Q4 2023
NeueCare/Care Delivery – Total Segment Revenue	$66,068	$67,134	$71,328
NeueSolutions/Care Solutions – Total Segment Revenue	$237,686	$200,777	$220,862

Segment Operating Income (Loss) ($USD thousands)	Q2 2023	Q3 2023	Q4 2023
NeueCare/Care Delivery	$11,031	$(390,761)	$3,748
NeueSolutions/Care Solutions	$2,996	$(29,355)	$(14,632)

KPIs

KPI	Q2 2023	Q3 2023	Q4 2023
Value-Based Consumers Served (as of period-end)	371,000	355,000	355,000
Enablement Services Lives (as of period-end)	—	—	106,000

Context on trends: Q4 revenue increased vs Q3 ($292.9M vs $269.4M) and vs Q4’22 ($227.7M), while Adjusted Operating Cost Ratio improved materially q/q to 16.1%, but Adjusted EBITDA weakened to $(10.4)M as bankruptcy-related ACO REACH costs and other items weighed on profitability .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Enterprise Revenue	FY 2023	$1.15–$1.20B	$1.14–$1.19B	Lowered
Care Solutions/Care Solutions Revenue	FY 2023	$900–$925M	$890–$910M	Lowered
Care Delivery Revenue	FY 2023	$250–$275M	$250–$275M	Maintained
Enterprise Adjusted Operating Cost Ratio	FY 2023	17.5%–18.5%	17.5%–18.5%	Maintained
Adjusted EBITDA	FY 2023	“Adjusted EBITDA profitable”†	“Adjusted EBITDA profitable”†	Maintained
Enterprise Revenue	FY 2024	n/a	≈$1.0B	New
NeueCare Revenue	FY 2024	n/a	$310–$320M	New
NeueSolutions Revenue	FY 2024	n/a	$690–$700M	New
Enterprise Adjusted Operating Cost Ratio	FY 2024	n/a	15%–16%	New
Enterprise Adjusted EBITDA	FY 2024	n/a	$15–$25M	New

† Management provided qualitative profit expectation for FY2023 Adjusted EBITDA without a numeric range.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2023, Q3 2023)	Current Period (Q4 2023)	Trend
Adjusted EBITDA trajectory	Q2: first positive AE ($6.4M); both segments positive operating income . Q3: second consecutive positive AE ($1.2M) .	AE $(10.4)M); 2024 guide +$15–$25M AE .	Near-term volatility; targeting FY24 profitability.
Portfolio refocus / CA MA sale	Q2: Sale announced; expected to bolster balance sheet . Q3: expecting close by Q1’24 .	CEO: completed sale; business now focused on care delivery/enablement .	De-risking completed; focus clarified.
ACO REACH partner bankruptcy	Not cited in Q2 segment reconciliations. Q3: $27.7M adjustment; headwind disclosed .	Q4: $8.7M additional cost; total 2023 $36.5M; external coverage flags Babylon-related impacts and coding-intensity headwinds .	Headwind persists but now quantified; watch run-rate normalization.
Goodwill impairment	None in Q2. Q3: $401.4M impairment .	None disclosed in Q4 .	One-time impairment behind.
Cost discipline	Q2 Adj OCR 16.8% . Q3 Adj OCR 18.0% .	Q4 Adj OCR 16.1% (improved q/q) .	Improving operating leverage.

Management Commentary

CEO framing: “We achieved significant milestones…completing the sale of our California Medicare Advantage business and fully focusing on where we have proven to have the greatest impact - through our care delivery and provider enablement business” .
Growth/positioning: “Our NeueHealth business drove strong results in 2023, delivering $1.2 billion in revenue, up 55% year over year, and serving 461,000 consumers across the country” .
Outlook: “NeueCare and NeueSolutions segments [are] well-positioned to drive strong performance in 2024, resulting in expected Enterprise Adjusted EBITDA between $15 million and $25 million” .
Call coverage themes (media): management cited coding intensity changes and a partner bankruptcy as ACO REACH headwinds; Babylon impact noted at ~$14M gross margin in 2023 .

Q&A Highlights

ACO REACH profitability drivers: Headwinds from coding intensity changes and a care partner bankruptcy were discussed; Babylon-related impact cited at ~$14M on 2023 gross margin, underscoring counterparty risk in enablement models .
2024 guide bridge: Management emphasized cost control (Adj OCR 15–16%) and segment contribution (NeueCare $310–$320M; NeueSolutions $690–$700M) as the path to $15–$25M AE .
Portfolio/liquidity positioning: Completion of CA MA sale and focus on continuing ops were reiterated as key to forward execution .

Estimates Context

We attempted to retrieve Wall Street consensus estimates via S&P Global (Primary EPS Consensus Mean, Revenue Consensus Mean for Q2–Q4 2023 and FY 2023–2024), but data were unavailable due to a missing CIQ mapping for ticker BHG in the S&P Global dataset. As a result, we cannot provide an authoritative beat/miss analysis versus S&P Global consensus for this quarter [GetEstimates attempt failed].
Where media or third-party sites report estimates, we have not relied on them; comparisons to consensus are therefore not included to maintain data integrity.

Key Takeaways for Investors

2023 refocus is complete; 2024 guidance implies non-GAAP profitability returning if cost ratio targets hold and segment revenue mix materializes .
ACO REACH partner bankruptcy and coding intensity are the core operational risks to monitor; watch for normalized run-rate margins absent one-offs .
Operating cost ratio improved sharply in Q4; sustaining 15–16% for FY24 is pivotal to hitting the $15–$25M Adjusted EBITDA guide .
Segment signals: NeueCare continues steady growth with positive operating income in Q4; NeueSolutions remains the larger revenue engine but needs margin stabilization to support consolidated profitability .
Absent S&P Global consensus, stock setup hinges on confidence in the FY24 guide, the cadence of cost-control, and clarity on ACO REACH economics; catalysts include quarterly progress vs. Adj OCR and segment targets .
Balance sheet/liquidity context improved after CA MA sale; continued focus on working capital and partner risk management should aid execution .

Sources: Q4 2023 8‑K and press release with financials/guidance ; Q3 2023 8‑K press release ; Q2 2023 8‑K press release ; Media coverage of Q4 call themes ; Company IR event page for Q4 call .

NeueHealth, Inc. (BHG)·Q4 2023 Earnings Summary