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CLOVER HEALTH INVESTMENTS, CORP. /DE (CLOV)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered accelerated growth and profitability: Total revenues rose 33% year-over-year to $462.3M, GAAP net loss narrowed to $1.3M, Adjusted EBITDA reached $25.8M (+279% y/y), and Adjusted Net income was $25.3M (+322% y/y) .
  • Membership inflected sharply: Medicare Advantage members reached 103,418 at quarter end (+30% y/y), with average MA membership of 101,959 (+28.6% y/y), driven by strong AEP/OEP in core NJ markets and cohort management via Clover Assistant .
  • Guidance raised: FY 2025 Adjusted EBITDA and Adjusted Net income ranges increased to $50–$70M (from $45–$70M prior), while revenue and BER were reconfirmed; management flagged more revenue weighted to H2 vs historical patterns, reinforcing momentum and visibility. Bold near-term catalyst: guidance raise and sustained profitability trajectory .
  • Operational color: January inpatient utilization was elevated amid a later flu season, but normalized from February; Insurance BER was 86.1% (seasonal and impacted by a CA-enabled affiliate entity), with Adjusted SG&A leverage to 18% of revenue (−360 bps y/y) .
  • Strategic tailwinds: CMS final rate notice deemed favorable and 4-Star payment year in 2026 expected to add to growth/profitability; external commercialization via Counterpart Assistant progressing with expanding partner pipeline and early encouraging KPIs .

What Went Well and What Went Wrong

What Went Well

  • Membership and revenue growth outpaced industry: Insurance revenue rose 34% y/y to $456.9M, driven by 30% MA member growth; cohort unit economics historically improve 700–1,500 bps between year 1 and later years, supporting margin trajectory .
  • Profitability inflection: Adjusted EBITDA was $25.8M and Adjusted Net income was $25.3M, up 279% and 322% y/y, respectively; Adjusted SG&A fell to 18.0% of revenue (−360 bps y/y), evidencing operating leverage at scale .
  • Technology impact: “Our differentiated model is designed to drive scalable growth and proactively manage our medical costs… with Clover Assistant,” and CHF study associated CA usage with 18% lower hospitalizations and 25% lower 30-day readmissions, reinforcing clinical edge .

What Went Wrong

  • Benefits Expense Ratio seasonality and mix: Insurance BER rose to 86.1% (vs. 83.2% y/y, 82.8% prior quarter), reflecting seasonality, new member mix, and the CA-enabled affiliate entity’s quality investments; near-term margin optics are softer though consistent with full-year plan .
  • January inpatient utilization spike: Elevated lower-intensity inpatient utilization tied to later flu season pressured early-quarter trends before normalizing, highlighting utilization sensitivity to macro health dynamics .
  • Cash at parent/unregulated level dipped near term: Unregulated cash was impacted by working capital/timing and buyback completion; management expects rebuild through the year, but near-term flexibility narrowed .

Financial Results

MetricQ1 2024Q4 2024Q1 2025Consensus Estimate
Total Revenues ($USD Millions)$346.9 $336.963 $462.331 N/A (S&P Global consensus unavailable)
Premiums Earned, Net ($USD Millions)$341.722 $330.680 $456.906 N/A (S&P Global consensus unavailable)
GAAP Net Loss – Continuing Ops ($USD Millions)$(23.170) $(21.481) $(1.274) N/A (S&P Global consensus unavailable)
EPS – Continuing Ops ($USD)$(0.05) $(0.04) $0.00 N/A (S&P Global consensus unavailable)
Adjusted EBITDA ($USD Millions)$6.820 $7.824 $25.782 N/A (S&P Global consensus unavailable)
Adjusted Net Income ($USD Millions)$6.035 $7.447 $25.316 N/A (S&P Global consensus unavailable)
Adjusted SG&A ($USD Millions)$74.940 $86.095 $83.107 N/A (S&P Global consensus unavailable)
Adjusted SG&A as % Revenue21.6% 26% 18.0% N/A (S&P Global consensus unavailable)
Insurance BER (%)83.2% 82.8% 86.1% N/A (S&P Global consensus unavailable)

Segment breakdown (Insurance):

MetricQ1 2024Q4 2024Q1 2025
Premiums Earned, Net ($USD Thousands)$341,722 $330,680 $456,906
Net Medical Claims Incurred ($USD Thousands)$266,076 $243,164 $367,887
Salaries and Benefits ($USD Thousands)$58,335 $61,567 $58,329
General & Administrative ($USD Thousands)$43,901 $51,311 $50,080
Segment Net Loss ($USD Thousands)$(26,590) $(25,362) $(19,390)

KPIs:

KPIQ1 2024Q4 2024Q1 2025
Insurance Members (Period-End)79,527 82,664 103,418
Average MA Membership79,265 N/A101,959
Insurance BER (%)83.2% 82.8% 86.1%
Adjusted SG&A as % Revenue21.6% 26% 18.0%
Cash, Cash Equivalents & Investments ($USD Millions)$440.3 $437.6 $390.8
Days in Claims Payable (days)N/A59 (implied higher; prior year context)37

Note: Consensus estimates from S&P Global were unavailable via our tool for CLOV at the time of analysis.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Insurance Revenue ($USD Billions)FY 2025$1.800–$1.875 $1.800–$1.875 Maintained
Adjusted SG&A ($USD Millions)FY 2025$355–$365 $355–$365 Maintained
Adjusted SG&A as % of RevenueFY 202519%–20% 19%–20% Maintained
Adjusted EBITDA ($USD Millions)FY 2025$45–$70 $50–$70 Raised
Adjusted Net Income ($USD Millions)FY 2025$45–$70 $50–$70 Raised
Average MA MembershipFY 2025103,000–107,000 103,000–107,000 Maintained
Insurance BER (%)FY 202587%–88% 87%–88% Maintained

Management added that revenue will be more weighted to H2 vs historical patterns, aligning with membership ramp and seasonality .

Earnings Call Themes & Trends

TopicQ3 2024 (Q-2)Q4 2024 (Q-1)Q1 2025 (Current)Trend
Membership GrowthFlat y/y membership (~81.1K) but set up for 2025 growth 82.7K year-end and 2025 growth plans 103.4K (+30% y/y) with strong NJ AEP/OEP cohorts Accelerating
ProfitabilityAdj EBITDA $19.3M; BER 82.8% Adj EBITDA $7.8M; BER 82.8% Adj EBITDA $25.8M; Adj Net $25.3M; BER 86.1% Improving y/y; seasonal BER
Clover Assistant/Clinical4.0 Stars and market-leading HEDIS cited Tech-first model underpinning profitability CHF paper: 18% lower hospitalizations, 25% lower readmits; CA driving cohort mgmt Strengthening evidence
Counterpart Assistant (External)Setup for external commercialization noted Positioned to invest alongside profitability Pipeline building; implementation resources added; early KPIs optimistic Scaling partners
Regulatory/Tailwinds4-Star payment year in 2026 2026 4-Star benefit and profitability setup CMS final rate notice positive; 4-Star payment year adds momentum Positive tailwinds
SG&A LeverageAdj SG&A 19% of revenue Adj SG&A 26% (seasonal) Adj SG&A 18% (−360 bps y/y) Leverage improving
Medical Costs/UtilizationStable MCR/BER improvements BER 82.8%; profitability improving Jan inpatient uptick (later flu), normalized by Feb; BER impacted by affiliate entity Normalizing post January
Claims OpsN/AN/ADays in claims payable down to 37; normalization vs last year’s Change Healthcare disruption Stabilized operations

Management Commentary

  • CEO: “Our differentiated model is designed to drive scalable growth and proactively manage our medical costs amidst regulatory changes, outperforming others in the industry, with Clover Assistant.” Q1 results “demonstrating our ability to meaningfully grow membership and expand profitability” .
  • CFO: “Adjusted SG&A as a percentage of total revenue decreased to 18%… representing an improvement of 360 bps y/y… GAAP net loss… improved by $18M y/y… Adjusted EBITDA… $26M… Adjusted Net income… $25M” .
  • Strategy and outlook: CMS final rate notice positive; 4-Star payment year in 2026 expected to accelerate growth; expanding Counterpart Assistant with partners and implementation resources .
  • Clinical validation: CHF analysis associated CA with 18% lower hospitalizations, 25% lower 30-day readmissions, underscoring technology-enabled care impact .

Q&A Highlights

  • Medical cost trends: Both new and returning cohorts tracking as expected for MCR/BER; January inpatient utilization uptick tied to later flu season but normalized starting February .
  • Counterpart commercialization: Building pipeline; not all deals announced; early KPIs mirror internal plan metrics (physician engagement, earlier diagnosis, HEDIS improvements) .
  • Competitive dynamics: Clover’s wide-network PPO with software-enabled care viewed as differentiated; peers pulling back on PPO benefits/marketing; CLOV “staying the course” .
  • New Jersey runway: ~20% non-SNP market share; significant room to grow; full platform deployed locally .
  • BER drivers clarification: New member mix, modest medical trend, timing, and CA-enabled affiliate entity’s care coordination/quality investments .

Estimates Context

  • S&P Global consensus EPS and revenue for Q1 2025 were unavailable via our tool, preventing beat/miss determination. Management raised FY 2025 Adjusted EBITDA and Adjusted Net income ranges to $50–$70M, implying potential upward revisions to profitability estimates and a second-half revenue weighting that may shift quarterly revenue cadence assumptions .
  • Note: Values from S&P Global consensus were unavailable at time of analysis; tables mark consensus as N/A.

Key Takeaways for Investors

  • Membership and revenue are inflecting faster than peers, supported by NJ-centric AEP/OEP success and CA-driven cohort management; this underpins sustained profitability improvement despite seasonal BER .
  • Guidance raise on Adjusted EBITDA and Adjusted Net income is a clear positive surprise; H2 revenue weighting provides a path for continued upside if utilization remains in line .
  • Clinical moat: CHF outcomes evidence adds to CA’s credibility; broader Counterpart Assistant adoption can unlock new revenue streams and diversify earnings over time .
  • Operational normalization: Claims payable days reduced to 37 and back-office transitions complete, lowering execution risk vs. last year’s industry disruptions .
  • Regulatory tailwinds: 4-Star payment year in 2026 plus favorable CMS rate notice should enhance benchmarks/benefits, supporting competitive positioning and membership expansion .
  • Watch BER mix: Expect seasonal elevation and new member cohort effects near term; management cites historical loss ratio improvement from cohort maturation, which should support FY margin targets .
  • Potential stock catalysts: Continued profitability prints, visibility on Counterpart partnerships, and index inclusion (Russell 3000) increasing investor awareness/liquidity could be supportive for sentiment and flows .