NeueHealth, Inc. (NEUE)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $215.79M, down year-over-year and below S&P Global consensus; Adjusted EBITDA reached $13.48M, marking the fifth consecutive quarter of adjusted EBITDA profitability .
• Versus estimates: Revenue missed ($215.79M vs $270.10M consensus*) while EPS beat (Primary EPS −1.93 actual vs −4.18 consensus*); EBITDA came in at $6.22M actual vs $8.50M consensus* (company-reported Adjusted EBITDA $13.48M reflects non‑GAAP adjustments) .
• Management highlighted a shift in membership mix away from ACO REACH as a driver of lower revenue year-over-year; consumer count expanded to ~709K (+51% YoY), supporting segment momentum across NeueCare and NeueSolutions .
• The go‑private transaction with NEA remains the key near‑term catalyst; management anticipates closing in mid‑2025 pending approvals, which likely dominates stock reaction ahead of completion .

Values retrieved from S&P Global for estimates*

What Went Well and What Went Wrong

What Went Well

• Fifth consecutive quarter of positive Adjusted EBITDA, delivering $13.48M in Q1 and underscoring a more durable profitability trajectory .
• Strong consumer growth: served ~709K consumers (+51% YoY), including 571K value‑based consumers and 138K enablement lives, expanding across ACA Marketplace, Medicare, and Medicaid .
• CEO emphasized the relationship-based, consumer‑centric model: “Our value-driven, consumer-centric care model is compelling…align interests to create a seamless, more coordinated care experience” (Mike Mikan) .

What Went Wrong

• Revenue declined year-over-year (to $215.79M from $245.10M), driven by lower ACO REACH revenue ($124.04M vs $171.81M YoY) and missed Wall Street consensus .
• Continued GAAP net loss in the quarter (−$10.85M), with net loss attributable to common shareholders at −$24.88M; interest expense increased to $6.64M .
• Legal overhang: external shareholder alert announced an investigation into potential fiduciary breaches, adding governance headline risk during the go‑private process .

Financial Results

Consolidated Results vs Prior Periods and Estimates

Values retrieved from S&P Global*

Notes:

• Company Adjusted EBITDA is non‑GAAP. SPGI “EBITDA actual” reflects a different methodology; use caution comparing to company Adjusted EBITDA .

Income Statement Highlights (Company GAAP)

Segment Breakdown

KPIs

Guidance Changes

Management did not provide new FY 2025 quantitative guidance in Q1 materials; commentary focused on strategy and consumer growth .

Earnings Call Themes & Trends

Management Commentary

• CEO Mike Mikan: “Our value-driven, consumer-centric care model is compelling, and we continue to see it resonate…as we align interests to create a seamless, more coordinated care experience for consumers, providers, and payors.”
• CFO Jay Matushak: “Consolidated revenue…was $215.8 million, slightly lower than prior year due to a shift in membership mix away from ACO REACH to other lines of business…we achieved adjusted EBITDA profitability, driving $13.5 million in the first quarter.”
• CEO on strategy: focus on diverse populations across ACA, Medicare, Medicaid; expand footprint in existing markets and evaluate new geographies; deepen payer and provider partnerships .

Q&A Highlights

• The transcript materials reviewed were prepared remarks without a captured analyst Q&A section; no additional guidance clarifications or detailed Q&A exchanges were present in the documents accessed .

Estimates Context

• Revenue: Actual $215.79M vs consensus $270.10M (miss)* .
• Primary EPS: Actual −1.93 vs consensus −4.18 (beat)*.
• EBITDA: SPGI actual $6.22M vs consensus $8.50M (miss)*; Company Adjusted EBITDA $13.48M reflects non‑GAAP adjustments (transaction costs, share-based comp, warrant liability, discontinued operations, etc.) .
• Coverage depth: Revenue and EPS consensus were based on limited estimates (1–2 analysts), increasing potential for revisions post‑print*.

Values retrieved from S&P Global*

Key Takeaways for Investors

• Sequential operating improvement: Q1 2025 operating income turned positive ($2.66M), and Adjusted EBITDA reached $13.48M, the fifth consecutive quarter—supporting a narrative of improving core operations .
• Top‑line headwinds stemmed from lower ACO REACH revenue; management is shifting mix toward enablement and clinic care, evidenced by higher NeueCare revenue and consumer growth .
• Estimate dispersion and low coverage: with 1–2 estimates, consensus may shift meaningfully as the Street recalibrates to the new mix and non‑GAAP adjustments post‑quarter*.
• Strategic catalyst: pending go‑private transaction with NEA anticipated mid‑2025; deal outcome is a primary near‑term stock driver and could overshadow quarterly fundamentals .
• Watch capital structure and cash: interest expense rose (to $6.64M), but cash and investments increased quarter‑end, with non‑regulated cash cited at $145.1M, supporting liquidity during the transition .
• Segment focus: NeueCare’s operating income expanded to $23.01M; NeueSolutions posted a modest loss (−$2.99M). Sustained execution in enablement and disciplined ACO/MSSP participation are key to margin trajectory .
• Governance risk: external shareholder alert adds headline risk while the proxy and merger process advance; monitor SEC filings and transaction milestones .

Values retrieved from S&P Global for estimates*

Appendix: Additional Financial Detail

Revenue Composition (Q1 2025 vs Q1 2024)

Selected Balance Sheet Items (Q1 2025 vs YE 2024)

Non‑GAAP Reconciliation (Excerpt, Q1 2025)

• Adjusted EBITDA reconciled from net loss includes add‑backs for interest expense ($6.64M), D&A ($3.56M), share‑based compensation ($5.64M), and change in warrant liability (−$2.65M), among others, totaling $14.92M add‑backs to arrive at $13.48M Adjusted EBITDA .

Key Management Quotes

• “We are starting 2025 in a very strong position…delivering another quarter of Adjusted EBITDA profitability.” — Mike Mikan .
• “Consolidated revenue…slightly lower than prior year due to a shift in membership mix away from ACO REACH to other lines of business.” — Jay Matushak .
• “We anticipate the transaction closing in mid‑2025, pending satisfaction of the necessary closing conditions.” — Mike Mikan .