CareMax, Inc. (CMAX)·Q2 2024 Earnings Summary

Executive Summary

• Q2 2024 revenue was $198.627M, down 11.5% year-over-year and down 14.5% sequentially; MER improved sequentially to 86.2% but remained elevated versus 84.6% YoY, and net loss widened sharply to $170.558M due to $133.0M non‑cash impairment of long‑lived assets .
• Management emphasized sequential MER improvement and continued clinical initiative progress, while highlighting July actions to access additional lender capital and extend limited covenant waivers to bridge liquidity amid strategic alternatives evaluation .
• Membership trends mixed: MA membership grew 1% YoY to 104,000, while total membership fell 13% YoY to 236,500; centers declined to 50 from 55 in Q1 and 56 in Q4 2023, reflecting footprint rationalization .
• No formal FY24 financial guidance; the company continues to pursue cost reductions, asset divestitures, refinancing, and waivers, and acknowledged going-concern risk in forward‑looking risk disclosures—a key stock narrative driver alongside liquidity updates .

What Went Well and What Went Wrong

What Went Well

• Sequential MER improvement with continued progress on clinical initiatives: “we were able to manage toward another quarter of sequential improvement in MER… and continued to make progress against our clinical initiatives” — Carlos de Solo, CEO .
• Lender support and liquidity bridge: in July, CareMax entered an agreement to access additional capital and extend limited waiver of certain credit facility covenants, aiding near‑term liquidity while strategic alternatives are evaluated .
• MA membership resilience: MA members rose 1% YoY to 104,000, supporting risk-based revenue breadth despite broader membership declines .

What Went Wrong

• Revenue contraction and margins under pressure: total revenue fell to $198.627M (-12% YoY; -14.5% QoQ), Adjusted EBITDA deteriorated to -$11.2M (vs $7.0M YoY), and Platform Contribution fell to $3.7M (vs $28.6M YoY) .
• Significant non‑cash impairment: $133.0M long‑lived asset impairment drove net loss of $170.558M in Q2 (vs $32.376M in Q2 2023), compounding elevated utilization and MER headwinds .
• Membership and footprint rationalization: total membership declined to 236,500 (-13% YoY), and centers decreased to 50 (from 55 in Q1 and 56 in Q4), implying network resizing and potential growth constraints near term .

Financial Results

Segment revenue breakdown:

KPIs:

Key observations:

• Revenue decline was broad-based, with notable drops in Medicaid risk-based and Government VBC revenue versus both Q1 and Q2 2023, while Medicare risk-based revenue was roughly flat YoY and down QoQ, consistent with elevated utilization pressures and membership mix shifts .
• Sequential MER improvement (87.8% → 86.2%) reflects clinical and utilization management efforts; however, MER remains above target, compressing Platform Contribution and Adjusted EBITDA .
• The net loss spike was driven primarily by non‑cash impairment, overshadowing operating progress on MER .

Guidance Changes

Note: Management reiterated exploration of strategic alternatives and cost actions rather than numeric guidance ranges .

Earnings Call Themes & Trends

Transcript for Q2 2024 was not available via our document tools; themes below derive from management communications in Q2, Q1, and Q4 press releases.

Management Commentary

• “Although our medical expense ratio continued to run higher than target levels, we were able to manage toward another quarter of sequential improvement in MER in the second quarter, and we continued to make progress against our clinical initiatives.” — Carlos de Solo, CEO .
• “Additionally, in July, we entered an agreement to access additional capital from our lenders and further extend the limited waiver of certain financial covenants in our credit facility. This funding will assist in bridging our liquidity as we continue to evaluate strategic alternatives for our business.” — Carlos de Solo, CEO .
• Prior framing: “we began taking major steps… de‑emphasize certain longer duration investments, such as de novo centers, and refocus efforts on driving medical margin… our lenders have also granted us limited waivers… as we explore strategic options… to maximize the value of certain assets.” — Q4 2023 release .

Q&A Highlights

Q2 2024 earnings call transcript was not available via our tools; therefore, Q&A detail, guidance clarifications, and tone changes versus prior quarters could not be extracted.

Estimates Context

S&P Global consensus data for CMAX Q2 2024 was unavailable through our estimates tool (mapping error). As a result, estimates comparisons cannot be anchored to S&P Global for this quarter. Values retrieved from S&P Global were unavailable due to a mapping issue.

Third‑party reference: A retail site indicated Q2 2024 EPS estimate of -$8.91 versus an “actual” of -$9.86; these figures are not consistent with the company’s reported diluted EPS of -$44.79 (reverse split adjusted), and thus are not relied upon for professional comparison .

Key Takeaways for Investors

• Sequential MER improvement is a positive sign, but the ratio remains above targets, compressing Platform Contribution and Adjusted EBITDA; elevated utilization and mix are core drivers to monitor .
• The quarter’s large net loss was driven by non‑cash impairment; excluding this, operating loss still widened amid revenue declines—focus on underlying medical margin trajectory, not just GAAP noise .
• Liquidity bridge via lender capital access and extended waivers is critical; near‑term trading likely sensitive to additional waiver extensions, financing updates, and any asset divestiture progress .
• Footprint and cost optimization continue (center count down to 50; de novo losses ongoing at $4.6M); watch for incremental reductions in fixed costs and ramp of core centers .
• With no formal FY24 guidance, narrative will hinge on MER normalization, liquidity actions, and strategic alternatives outcomes; risk disclosures include going concern and potential restructuring if plans fail, which is a key downside scenario .
• Membership dynamics: MA membership resilience (up 1% YoY) offsets some headwinds, but broader membership declines and revenue mix shifts weigh on top line—monitor payer negotiations and acuity management .
• Actionable: Near‑term—trade headlines around waivers/financing and MER prints; medium‑term—thesis depends on execution of clinical and cost programs to restore Platform Contribution and on balance sheet remediation through asset sales/refinancing .