Executive Summary

Q1 2024 showed top-line strength but profitability pressure: revenue rose 34% YoY to $232.2M while net loss narrowed to $43.4M; diluted EPS was $(11.49) . Medical expense ratio (MER) improved sharply vs. Q4 (87.8% vs. 122.7%) but remained above prior-year levels (75.2%) .
Management cited early benefits from Q4 clinical initiatives with MER “favorable to our internal projections” and improvement vs. the prior two quarters, partially offset by Medicaid acuity shifts; utilization remained elevated .
Liquidity remains tight: cash and equivalents were ~$41.5M, and the company remains under a limited waiver of certain credit facility covenants while “continuing to explore strategic options” to maximize asset value and generate liquidity .
Non-GAAP performance improved sequentially (Adjusted EBITDA $(10.5)M; Platform Contribution $9.1M) vs. Q4 (Adjusted EBITDA $(71.8)M; Platform Contribution $(55.6)M) but was weaker YoY (Q1’23 Adjusted EBITDA $(0.4)M; Platform Contribution $24.7M) .
No 2024 guidance was provided last quarter and none was introduced in Q1; the company continues to withhold a 2024 financial outlook amid strategic reviews . Potential stock reaction catalysts: sustained MER normalization, any asset monetization/financing update, and evidence of durable medical cost control .

What Went Well and What Went Wrong

What Went Well

Early signs of clinical program traction: “we began to see benefits from our fourth quarter clinical efforts... MER in the first quarter of 2024 was favorable to our internal projections and improved compared to the prior two quarters” .
Growth in key revenue drivers and MA membership: total revenue up 34% YoY to $232.2M; Medicare Advantage members were 107k, up 12% YoY .
Sequential MER normalization and non-GAAP improvement: MER improved to 87.8% from 122.7% in Q4; Platform Contribution rebounded to $9.1M from $(55.6)M in Q4 .

What Went Wrong

Utilization remained elevated and Medicaid acuity shifts offset MER improvement, contributing to negative Adjusted EBITDA $(10.5)M and Platform Contribution softness vs. prior year .
Interest burden and leverage remain high: Q1 interest expense was $19.8M; current portion of third-party debt rose to ~$391.0M, underscoring near-term refinancing/liquidity risk .
Ongoing going-concern and covenant risks disclosed: the company cites “substantial doubt” about ability to continue as a going concern and reliance on covenant waivers and strategic alternatives to address liquidity .

Financial Results

Metric	Q1 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$173.0	$151.8	$232.2
Net (Loss) ($USD Millions)	$(82.1)	$(465.8)	$(43.4)
Diluted EPS ($)	$(22.11)	$(124.53)	$(11.49)
Medical Expense Ratio (%)	75.2%	122.7%	87.8%
Adjusted EBITDA ($USD Millions)	$(0.4)	$(71.8)	$(10.5)
Platform Contribution ($USD Millions)	$24.7	$(55.6)	$9.1

Segment Revenue Mix ($USD Millions)

Segment	Q1 2023	Q4 2023	Q1 2024
Medicare risk-based revenue	$121.6	$108.7	$168.5
Medicaid risk-based revenue	$25.6	$26.3	$37.7
Government value-based care revenue	$10.0	$7.4	$18.8
Other revenue	$15.8	$9.5	$7.3
Total revenue	$173.0	$151.8	$232.2

Key Performance Indicators

KPI	Q4 2023	Q1 2024
Total membership (000s)	270	250
Medicare Advantage membership (000s)	111.5	107
Centers	56	55
Markets	7	6
MCREM (000s)	229.3	218.0
Cash & Equivalents ($M)	$65.5	$41.5

Non-GAAP note: Adjusted EBITDA and Platform Contribution are non-GAAP measures; reconciliations are provided in the company’s materials .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company Financial Outlook	FY 2024	Not providing 2024 financial outlook (Q4 2023)	No outlook provided in Q1 materials	Maintained

No specific revenue, margin, OpEx, OI&E, or tax-rate guidance was introduced in Q1 2024. The company continues to evaluate strategic options and liquidity actions .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2023)	Previous Mentions (Q4 2023)	Current Period (Q1 2024)	Trend
Utilization & MER	Working to normalize PPD/PYD; underlying center MER within historical ranges; elevated flex card use	Seasonal spikes in Dec/Jan; explicit reserves; PYDs pressured MER; expectation to curb volatility in 2024	MER improved vs. prior two quarters but utilization remained elevated; Medicaid acuity shifts offset	Improving sequentially but still elevated YoY
Liquidity & Covenants	Q3 cash $32M; undrawn DDTL; plan to be FCF+ after MSSP payment in late 2024	Drew remaining $60M DDTL; YE cash ~$66M; limited covenant waivers; evaluating strategic options	Cash $41.5M; still under covenant waiver; exploring asset value maximization for liquidity	Tight; reliant on waivers/strategic actions
De novo strategy	Moderating pace; capital-light focus; consolidation of sites for efficiency	Consolidated 6 sites; ~$20M annualized cash savings across org	De novo pre-opening + post-opening losses $4.8M in Q1	De-Emphasized; focus on core profitability
Flex card & benefit design	Significant driver of higher external costs; expect 2024 cost levels roughly consistent with 2023	Expect similar MER trends; minimize PPD via better data/claims intake	Not specifically quantified in Q1, but elevated utilization referenced	Ongoing headwind
Government VBC (MSSP/ACO REACH)	Record 2022 shared savings; seeing favorable 2023 trajectory	Optimism on 2024 savings; bridge to cash later in year	Government VBC revenue up to $18.8M; continued strategic priority	Positive contributor

Management Commentary

“During the first quarter of 2024, we believe we began to see benefits from our fourth quarter clinical efforts… MER in the first quarter of 2024 was favorable to our internal projections and improved compared to the prior two quarters, offset by acuity shifts in our Medicaid risk membership.” — Carlos de Solo, CEO
“We… take steps… to maximize the value of certain assets and right-size the capital structure… we had cash and equivalents of approximately $41 million and remain covered under the limited waiver of certain financial covenants… We have since taken further actions to preserve near-term liquidity and remain engaged with our lenders and financial advisors to evaluate strategic options.” — Carlos de Solo, CEO

Q&A Highlights

No Q1 2024 earnings call transcript was available in the source set. Key Q&A themes from the prior earnings call (Q4 2023) included:

Flex card impacts and 2024 outlook: management expects benefit-related costs to be broadly comparable to 2023 on a total-cost basis .
MSSP/ACO REACH accrual confidence and data visibility with external actuaries; favorable trend indicators supporting raised accruals for 2023 performance .
2024 operating posture: emphasis on operational efficiency, cash flow, and disciplined member growth; measured approach to full-risk conversion .
MER and prior period developments: actions to minimize PYD through improved data ingestion; acknowledging MER likely consistent with recent levels excluding PYD .

Estimates Context

Wall Street consensus (S&P Global) for Q1 2024 was unavailable for CMAX at the time of this analysis (SPGI CIQ mapping not found). As a result, revenue and EPS comparisons to consensus could not be determined.*

Metric	Actual	Consensus	Surprise
Revenue ($USD Millions)	$232.2	Unavailable*	N/A
Diluted EPS ($)	$(11.49)	Unavailable*	N/A

*Consensus unavailable via S&P Global for CMAX during this period.

Key Takeaways for Investors

Sequential MER improvement and non-GAAP rebound are constructive, but absolute MER remains elevated vs. prior year; sustaining cost normalization is critical to the equity story .
Liquidity and leverage are the central risks: $41.5M cash against a large current debt load and ongoing covenant waivers underscore the importance of timely asset monetization or refinancing solutions .
Government VBC momentum and MA membership growth support top-line durability; however, profitability hinges on clinical cost control and Medicaid acuity management .
Near-term trading catalysts: concrete updates on strategic alternatives/asset sales, covenant amendments, and evidence of multi-quarter MER stabilization.
Medium-term thesis: if CareMax converts clinical program traction into durable MER improvement and executes liquidity actions, earnings power could inflect; failure to do so leaves downside risk given going-concern language and debt service burden .
No guidance continues to limit visibility; investors should monitor disclosures for updated financial outlook once strategic reviews advance .
Track non-GAAP to GAAP bridges: Adjusted EBITDA excludes significant items; Platform Contribution trends offer early read on operational performance but must converge with GAAP over time .

CareMax, Inc. (CMAX)·Q1 2024 Earnings Summary