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CLOVER HEALTH INVESTMENTS, CORP. /DE (CLOV)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered continued top-line growth and sharp margin improvement: total revenues rose to $336.96M (+7.9% YoY), Insurance MCR fell to 73.5% (from 82.4% YoY), and Adjusted EBITDA turned positive at $7.8M .
  • Full-year 2024 marked a profitability inflection on non-GAAP metrics: Adjusted EBITDA of $70.1M and Adjusted Net income of $68.2M, with GAAP net loss from continuing operations improving by $164M YoY .
  • FY2025 guidance initiates a growth year with profitability: insurance revenue $1.80–$1.875B (+37% YoY midpoint), average MA membership 103k–107k (+30% YoY midpoint), Adjusted EBITDA and Adjusted Net income each $45–$70M; BER guided to 87–88% reflecting new member onboarding .
  • Management highlighted a multi-year profitability bridge: 2024 benefited from favorable prior-period development and strong cohort economics; 2025 margins will reflect 30% new member growth (higher year-1 loss ratios), while 2026 benefits are expected from maturing cohorts and the payment-year 2026 4.0 Star rating .

What Went Well and What Went Wrong

What Went Well

  • Strong margin execution: Q4 Insurance BER improved to 82.8% (from 87.4% YoY) and MCR improved to 73.5% (from 82.4% YoY), driving a positive Adjusted EBITDA of $7.8M .
  • Cohort management and technology differentiation: “more than 2/3 of our members received proactive… care through Clover Assistant, which continued to deliver over 1,000 bps of MCR improvement for returning MA members whose PCPs use CA” .
  • Strategic growth setup: AEP membership surpassed 100k with 27% YoY growth and 95% retention, positioning the company to grow membership while maintaining profitability; management emphasized payment-year 2026 4.0 Star rating tailwinds .

What Went Wrong

  • New member headwind in 2025: Management cautioned that year-1 members typically carry >1,000 bps higher loss ratios than returning members, reducing YoY adjusted EBITDA and adjusted net income vs 2024 .
  • Elevated Q4 SG&A to support growth and quality initiatives: total SG&A rose 7% YoY in Q4 (to ~$115.0M GAAP), and Adjusted SG&A rose 9% YoY to $86.1M; management began a 2025 efficiency program to offset increases from growth investments .
  • Revenue impact from minimum MLR rebate: strong MA plan margin outperformance led to an immaterial minimum MLR rebate for 2024, which “effectively lowered our revenues,” and favorable prior-period development (PPD) reduced reported BER; neither is expected to recur at 2024 levels .

Financial Results

Consolidated Financials vs Prior Periods and YoY

MetricQ4 2023Q3 2024Q4 2024
Total Revenues ($USD Millions)$312.39 $330.99 $336.96
Premiums Earned, Net ($USD Millions)$303.07 $322.58 $330.68
Net Medical Claims Incurred ($USD Millions)$249.75 $249.77 $243.04
Insurance MCR (%)82.4% 78.0% 73.5%
Insurance BER (%)87.4% 82.8% 82.8%
Adjusted EBITDA ($USD Millions)$(16.68) $19.26 $7.82
GAAP Net Loss from Continuing Ops ($USD Millions)$(67.95) $(8.79) $(21.48)
Diluted EPS – Continuing Ops ($USD)$(0.14) $(0.02) $(0.04)

Notes: Adjusted EBITDA and BER are non-GAAP; see reconciliations in exhibits .

Segment Breakdown (Insurance)

Metric (Insurance Segment)Q4 2023Q4 2024
Premiums Earned, Net ($USD Thousands)$303,070 $330,680
Net Medical Claims Incurred ($USD Thousands)$249,790 $243,164
Salaries & Benefits ($USD Thousands)$63,229 $61,567
G&A ($USD Thousands)$41,432 $51,311
Segment Net Loss ($USD Thousands)$(51,381) $(25,362)

KPIs and Balance Sheet

KPIQ4 2023Q3 2024Q4 2024
Insurance Members (Period-End)81,205 81,275 82,664
Total Restricted & Unrestricted Cash, Cash Equivalents & Investments ($USD Millions)$417.3 $531.4 $437.6
Adjusted SG&A ($USD Millions)$79.31 $61.95 $86.10
Cash From Operating Activities – Continuing Ops ($USD Millions, FY)N/AN/A$82.45

Results vs Estimates

  • S&P Global Wall Street consensus EPS and revenue estimates were unavailable at the time of drafting due to data access limits; estimate comparisons are therefore omitted in this section. Values would be retrieved from S&P Global when available.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Insurance Revenue ($USD Billions)FY 2025N/A$1.800 – $1.875 Initiated
Adjusted SG&A ($USD Millions)FY 2025N/A$355 – $365; 19–20% of total revenues Initiated
Adjusted EBITDA ($USD Millions)FY 2025N/A$45 – $70 Initiated
Adjusted Net Income ($USD Millions)FY 2025N/A$45 – $70 Initiated
Average MA MembershipFY 2025N/A103,000 – 107,000 Initiated
Insurance BER (%)FY 2025N/A87% – 88% Initiated

Context: Q3 2024 updated FY2024 guidance (higher Adj. EBITDA, lower MCR/BER, higher Adjusted SG&A range) as a precursor to 2025 growth investments .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
AI/Technology Initiatives (Clover Assistant)Highlighted AI/LLM features (ambient scribing, EHR integration); clinical enhancements (CHF risk) Validated CA as driver of margin and growth opportunity “AI-powered automation” and deeper EHR integrations; CA drives >1,000 bps MCR improvement for returning members Accelerating adoption and impact
Home Care ProgramDifferentiated focus on sickest members; integrated with CA; high NPS Limited explicit callout in releasePlan to “further scale” home services; expanding geo reach and capabilities Expanding scope and investment
Star RatingsRecalculation to 3.5 Stars for 2025 payment year improved flexibility Achieved 4.0 Stars for flagship PPO for payment year 2026 >95% of members in 4-Star PPO plans; financial impact expected in 2026 Improving quality tailwinds
Membership Growth & Cohorts2024 focus on retention, margin improvement Positioned to grow in 2025 AEP growth +27% YoY, 95% retention; 2025 average membership +30% YoY midpoint Strong growth trajectory
SG&A EfficiencyCost initiatives; reinvestment in H2 SG&A down YoY; Adjusted SG&A down YoY Q4 SG&A elevated for AEP/quality; implemented 2025 efficiency program; targeting ~200 bps year-over-year Adjusted SG&A% improvement Optimizing despite growth spend
Regulatory/Macro (e.g., 2-midnight rule)Minimal impact expected —No material update; standard risk disclosures (inflation, rates) Neutral/monitored

Management Commentary

  • CEO on differentiation and cohort economics: “We surpassed 100,000 Medicare Advantage members… with 27% growth and a 95% AEP retention rate… Clover Assistant… continued to deliver over 1,000 basis points of MCR improvement for returning MA members…” .
  • CEO on 4.0 Star and 2026 impact: “We now have over 95% of our members in 4-star rated PPO plans… the financial effect of this 4-star rating will be enjoyed next year in 2026… higher benchmarks… more competitive benefits” .
  • CFO on 2024 results drivers: “We also experienced modestly favorable prior period development… which effectively lowered our full year BER… 2024 results included… margin outperformance… resulted in an immaterial minimum MLR rebate… which effectively lowered our revenues” .
  • CFO on 2025 bridge: “Investments in new membership growth year-over-year of 30% will reduce… adjusted EBITDA… as year 1 members typically have an over 1,000 basis points higher loss ratio… We have strong conviction that… loss ratios… will improve around 700 basis points in 2026” .

Q&A Highlights

  • Counterpart Health monetization timing: Management emphasized focus on expanding lives under management first; financial contribution expected later, with continued partnership momentum (Southern Illinois Healthcare, Iowa Clinic, Duke Connected Care) .
  • SG&A trajectory and efficiency: 2025 Adjusted SG&A guided to 19–20% of revenues (~200 bps improvement YoY), with fixed SG&A slightly down YoY and an efficiency program underway to streamline operations .
  • Home Care expansion: Planned investments to expand geographic reach and capabilities; program is central to controlling total cost of care for highest-acuity cohorts .
  • Guidance clarifications: CFO detailed 2025 profitability bridge (non-recurring PPD in 2024, higher year-1 loss ratios, increased growth SG&A, offset by efficiencies), and reiterated 2026 acceleration as cohorts mature and star rating tailwinds materialize .

Estimates Context

  • S&P Global Wall Street consensus estimates for Q4 2024 EPS and revenue were not accessible at drafting time due to data access limits; as a result, beat/miss vs consensus cannot be stated. Values would be retrieved from S&P Global when available.

Key Takeaways for Investors

  • Margin execution remains the core driver: 500–900 bps improvements in BER/MCR vs 2023 underpin positive Adjusted EBITDA and set a quality baseline entering a growth year .
  • 2025 is an investment year: Expect near-term margin pressure from 30% membership growth and higher year-1 loss ratios; focus on cohort maturation and SG&A efficiency to sustain profitability .
  • 2026 profitability catalyst: Payment-year 2026 4.0 Star rating and maturing 2025 cohorts (~700 bps loss-ratio improvement year 2; ~1,500 bps by year 3) support acceleration in profitability .
  • Technology moat: Clover Assistant’s demonstrated >1,000 bps MCR improvement for returning members and planned AI-powered automation/EHR enhancements should strengthen unit economics and scalability .
  • Home Care leverage: Scaling home services is a key strategy to improve outcomes and reduce cost trend for high-acuity members; watch for expansion updates and contribution to BER/MCR .
  • Capital and liquidity: Year-end 2024 total cash/investments at $437.6M and positive FY cash from operations ($82.45M) provide flexibility to fund growth .
  • Trading setup: Near-term stock volatility may track membership growth signals vs margin impact; medium-term thesis hinges on sustained cohort improvement, SG&A efficiency gains, and realization of 2026 star-rating economics .

Sources: Q4 2024 8-K/press release and exhibits ; Q4 2024 earnings call transcript ; Q3 2024 8-K/press release ; Q2 2024 8-K/press release and call transcript .