• Clover Health Reports Second Quarter 2024 Financial Results; Improves Full-Year Guidance on Strong Performance

    ソース: Nasdaq GlobeNewswire / 05 8 2024 15:05:00   America/Chicago

    Total Revenue growth for the Second Quarter of 2024 of 11% year-over-year

    GAAP Net Income from Continuing Operations during the Second Quarter of 2024 of $7.2 million versus Second Quarter 2023 GAAP loss of $28.9 million

    Adjusted EBITDA profitability for the Second Quarter of 2024 of $36.2 million versus Second Quarter 2023 Adjusted EBITDA of $9.9 million

    Increases Full-Year 2024 guidance to Insurance Revenue of $1.35 billion - $1.375 billion and Adjusted EBITDA profitability of $50 million - $65 million

    FRANKLIN, Tenn., Aug. 05, 2024 (GLOBE NEWSWIRE) -- Clover Health Investments, Corp. (Nasdaq: CLOV) (“Clover,” “Clover Health” or the “Company”), a physician enablement technology company committed to bringing access to great healthcare to everyone on Medicare, today reported financial results for the second quarter 2024. Management will host a conference call today at 5:00 p.m. ET to discuss its operating results and other business highlights.

    “I am delighted that our performance continues to validate Clover’s differentiated, technology-centric approach to healthcare, driven by our Insurance offering and its ability to generate meaningful returns while leading with physician-choice for our members,” said Clover Health CEO Andrew Toy. “Through our Clover Assistant technology and integrated care management platform, we aim to empower physicians to improve clinical outcomes and lower the total cost of care for people with chronic diseases. This allows us to partner with a much wider range of physicians than other plans. Our performance validates this key point of differentiation, and I believe positions us to thrive in the future of the Medicare Advantage market.”

    The Company continued to build upon its strong start to the year, reporting strong performance for several key operating metrics and has improved its full-year 2024 guidance for revenue and profitability.

    For the second quarter 2024, compared to second quarter 2023, GAAP Net income improved to $7.2 million from a GAAP Net loss of $28.9 million and Adjusted EBITDA increased to $36.2 million from an Adjusted EBITDA of $9.9 million. Insurance revenue during the second quarter grew by 11% year-over-year to $349.9 million, driven by strong member retention and intra-year growth, and Insurance MCR improved to 71.3% in the second quarter 2024, as compared to 77.2% in the second quarter 2023.

    “During the second quarter, Clover's business fundamentals once again delivered strong financial results,” said Peter Kuipers, CFO of Clover Health. “First, top-line revenues grew by 11% year-over-year. Second, the Company achieved its first quarter of positive GAAP Net Income as a public company, and delivered an increased Adjusted EBITDA as compared to the prior quarter. Third, this strong performance has strengthened our already healthy balance sheet position and has enabled us to improve our full-year 2024 guidance. We believe that our results, coupled with our recent Star Rating recalculation from 3 to 3.5 Stars for the 2025 payment year, positions us well to achieve our increased 2024 Adjusted EBITDA guidance and improve our underlying cohort economics in 2025 to increase our long-term profitability capacity.”

    Key Company highlights are as follows:

    Dollars in Millions 2Q24 2Q23(2) Change
    Between (%)
    Insurance revenue $349.9  $314.4  11.3%
    Net medical claims incurred  249.4   242.8  2.7%
    Total revenue  356.3   320.1  11.3%
    Insurance MCR  71.3%  77.2% (590 bps)
    Insurance BER(3)  76.1%  82.1% (600 bps)
    Salaries and benefits plus General and administrative expenses ("SG&A")(4) $99.9  $104.1  (4.0)%
    Adjusted Salaries and benefits plus General and administrative expenses ("Adjusted SG&A")(4)(5)  71.7   65.9  8.8%
    Net income (loss) from continuing operations  7.2   (28.9) Favorable(1)
    Adjusted EBITDA(5)  36.2   9.9  265.7%
    Total restricted and unrestricted cash, cash equivalents, and investments $482.8  $689.8  (30.0)%
               

    Financial Outlook

    For full-year 2024, Clover Health is updating its guidance as follows:

     Current 2024 Guidance Previous 2024 Guidance
    Insurance revenue$1.35 billion - $1.375 billion $1.30 billion - $1.35 billion
    Insurance MCR77% - 79% 79% - 81%
    Insurance BER(6)81% - 83% N/A
    Adjusted SG&A(6)$270 million - $280 million $270 million - $280 million
    Adjusted EBITDA(6)$50 million - $65 million $10 million - $30 million
        

    Lives under Clover Management

     June 30, 2024 June 30, 2023
    Insurance members80,261 82,526
        

    Earnings Conference Call Details

    Clover Health’s management will host a conference call to discuss its financial results on Monday, August 5, at 5:00 PM Eastern Time. To access the call via telephone please dial 800-245-3047 (for U.S. callers) or 203-518-9765 (for callers outside the U.S.) and enter the conference ID: CLOVQ224. A live audio webcast will also be available online at: https://event.on24.com/wcc/r/4643549/90F8BD4EFDC6BDE3601CC8948AF5A379. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link and at Clover Health’s Investor Relations website at investors.cloverhealth.com, and will remain available for approximately 12 months.

    Upcoming Investor Events & Conferences

    • 2024 KeyBanc Technology Leadership Forum at 3:00 p.m. Eastern Time, August 6, 2024
    • Canaccord Genuity 44th Annual Growth Conference at 2:00 p.m. Eastern Time, August 14, 2024

    Any live and archived webcasts and presentations associated with the conferences listed above may be accessed on Clover Health’s Investor Relations website at: investors.cloverhealth.com/news-and-events/investor-events-presentations.

    ______________________________________

    1 Not presented as a % change because the current or prior period amount is zero or the amount for the line item changed from a gain to a loss (or vice versa) and thus yields a result that is not meaningful.
    2 The results of operations for the Company's former Non-Insurance segment have been reclassified as discontinued operations for all periods presented due to the Company's decision to not participate in the ACO Reach program for the 2024 performance year. Refer to Note 17 - Discontinued Operations within the Company's most recent Form 10-Q for additional information.
    3 Insurance Benefits Expense Ratio (“BER”) is a Non-GAAP financial measure. A reconciliation of BER to Insurance Net medical claims incurred, net, the most directly comparable GAAP measure, is provided in a table immediately following the consolidated financial statements below. Additional information about the Company's Non-GAAP financial measures can be found under the caption "About Non-GAAP Financial Measures" below and in Appendix A. Beginning in the second quarter 2024, the Company is presenting Insurance BER. Management believes that by adding quality improvement expenses into the Insurance BER calculation, this offers a clearer and more accurate representation of our investment in healthcare quality and member engagement, and more fully captures the cost of maintaining and enhancing the quality of care for our members.
    4 Salaries and benefits plus General and administrative expenses ("SG&A") is the sum of Salaries and benefits plus General and administrative expenses presented as the GAAP measure in the condensed consolidated financial statements.
    5 Adjusted SG&A (Non-GAAP) and Adjusted EBITDA (Non-GAAP) are Non-GAAP financial measures. Reconciliations of Adjusted SG&A (Non-GAAP) to SG&A and Adjusted EBITDA (Non-GAAP) to Net loss from continuing operations, respectively, the most directly comparable GAAP measures, are provided in the tables immediately following the consolidated financial statements below. Additional information about the Company's Non-GAAP financial measures can be found under the caption "About Non-GAAP Financial Measures" below and in Appendix A.
    6 Reconciliations of projected Adjusted SG&A (Non-GAAP) to projected SG&A, and projected Adjusted EBITDA (Non-GAAP) to Net loss from continuing operations, the most directly comparable GAAP measures, are not provided because Stock-based compensation, which is excluded from Adjusted SG&A (Non-GAAP) and Adjusted EBITDA (Non-GAAP), cannot be reasonably calculated or predicted at this time without unreasonable efforts. A reconciliation of projected Insurance BER (Non-GAAP) to projected Net medical claims incurred, net, the most directly comparable GAAP measure, is not provided because quality improvements, which are included in Insurance BER (Non-GAAP), cannot be reasonably calculated or predicted at this time without unreasonable efforts. Additional information about the Company's Non-GAAP financial measures can be found under the caption "About Non-GAAP Financial Measures" below and in Appendix A.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding future events and Clover Health's future results of operations, financial condition, market size and opportunity, business strategy and plans, and the factors affecting our performance and our objectives for future operations. Forward-looking statements are not guarantees of future performance and you are cautioned not to place undue reliance on such statements. In some cases, you can identify forward looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "going to," "can," "could," "should," "would," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," "outlook," "forecast," "guidance," "objective," "plan," "seek," "grow," "if," "continue" or the negative of these words or other similar terms or expressions that concern Clover Health's expectations, strategy, priorities, plans or intentions. Forward-looking statements in this press release include, but are not limited to, the following: statements under "Financial Outlook" and statements regarding expectations relating to potential improvements in Insurance MCR, operating expenses, Adjusted SG&A, Insurance BER, and the number of Clover Health's Insurance members, as well as the statements contained in the quotations of our executive officers, future capital needs and other expectations as to future performance, operations and results (including our updated guidance for full-year 2024). Statements regarding our Adjusted EBITDA profitability are also forward-looking, and are based on our current targets which are preliminary and are derived from our 2024 financial outlook. These statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from results expressed or implied by forward-looking statements in this press release. Forward-looking statements involve a number of judgments, risks and uncertainties, including, without limitation, risks related to: our expectations regarding results of operations, financial condition, and cash flows; our expectations regarding the development and management of our Insurance business; our ability to successfully enter new service markets and manage our operations; anticipated trends and challenges in our business and in the markets in which we operate; our ability to effectively manage our beneficiary base and provider network; our ability to maintain and increase adoption and use of Clover Assistant, including the expansion of Clover Assistant for external payors and providers under the brand name Counterpart Assistant; the anticipated benefits associated with the use of Clover Assistant, including our ability to utilize the platform to manage our medical care ratios; our ability to maintain or improve our Star Ratings or otherwise continue to improve the financial performance of our business; our ability to develop new features and functionality that meet market needs and achieve market acceptance; our ability to retain and hire necessary employees and staff our operations appropriately; the timing and amount of certain investments in growth; the outcome of any known and unknown litigation and regulatory proceedings; any current, pending, or future legislation, regulations or policies that could have a negative effect on our revenue and businesses, including rules, regulations, and policies relating to healthcare and Medicare; fluctuations in the price of our Class A common stock and our ability to comply with Nasdaq's listing requirements; our ability to maintain, protect, and enhance our intellectual property; general economic conditions and uncertainty; persistent high inflation and interest rates; and geopolitical uncertainty and instability. Additional information concerning these and other risk factors is contained under Item 1A. “Risk Factors” in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 14, 2024, as such risks may be updated in our subsequent filings with the SEC. The forward-looking statements included in this press release are made as of the date hereof. Except as required by law, Clover Health undertakes no obligation to update any of these forward-looking statements after the date of this press release or to conform these statements to actual results or revised expectations.

    About Non-GAAP Financial Measures

    We use Non-GAAP measures including Insurance BER, Adjusted EBITDA, Adjusted SG&A, and Adjusted SG&A as a percentage of revenue. These Non-GAAP financial measures are provided to enhance the reader's understanding of Clover Health's past financial performance and our prospects for the future. Clover Health's management team uses these Non-GAAP financial measures in assessing Clover Health's performance, as well as in planning and forecasting future periods. These Non-GAAP financial measures are not computed according to GAAP, and the methods we use to compute them may differ from the methods used by other companies. Non-GAAP financial measures are supplemental to and should not be considered a substitute for financial information presented in accordance with generally accepted accounting principles in the United States ("GAAP") and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Readers are encouraged to review the reconciliations of these Non-GAAP financial measures to the comparable GAAP measures, which are attached to this release, together with other important financial information, including our filings with the SEC, on the Investor Relations page of our website at investors.cloverhealth.com.

    For a description of these Non-GAAP financial measures, including the reasons management uses each measure, please see Appendix A: "Explanation of Non-GAAP Financial Measures."

    The statements contained in this document are solely those of the authors and do not necessarily reflect the views or policies of CMS. The authors assume responsibility for the accuracy and completeness of the information contained in this document.

    About Clover Health:
    Clover Health (Nasdaq: CLOV) is a physician enablement technology company committed to bringing access to great healthcare to everyone on Medicare. This includes a health equity-based focus on seniors who have historically lacked access to affordable, high-quality healthcare. Our strategy is powered by our software platform, Clover Assistant, which is designed to aggregate patient data from across the healthcare ecosystem to support clinical decision-making and improve health outcomes through the early identification and management of chronic disease. For our members, we provide PPO and HMO Medicare Advantage plans in several states, with a differentiated focus on our flagship wide-network, high-choice PPO plans. For healthcare providers outside Clover Health's Medicare Advantage plan, we aim to extend the benefits of our data-driven technology platform to a wider audience via our subsidiary, Counterpart Health, and to enable enhanced patient outcomes and reduced healthcare costs on a nationwide scale. Clover Health has published data demonstrating the technology’s impact on Medication Adherence, as well as the earlier identification and management of Diabetes and Chronic Kidney Disease.

    Visit: www.cloverhealth.com

    Investor Relations Contact:

    Ryan Schmidt

    investors@cloverhealth.com

    Press Contact:

    Andrew Still-Baxter

    press@cloverhealth.com

    CLOVER HEALTH INVESTMENTS, CORP.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Dollars in thousands, except share amounts)
     
     June 30, 2024
    (Unaudited)
     December 31,
    2023
    Assets   
    Current assets   
    Cash and cash equivalents$254,771 $116,407
    Short-term investments 9,661  12,218
    Investment securities, available-for-sale (Amortized cost: 2024: $112,328; 2023: $101,412) 111,325  100,702
    Investment securities, held-to-maturity (Fair value: 2024: $3,281; 2023: $6,778) 3,295  6,902
    Accrued retrospective premiums 53,892  22,076
    Other receivables 21,231  16,666
    Healthcare receivables 66,739  64,164
    Surety bonds and deposits 542  542
    Prepaid expenses 14,517  14,418
    Other assets, current 3,539  1,404
    Assets related to discontinued operations 10,064  72,471
    Total current assets 549,576  427,970
        
    Investment securities, available-for-sale (Amortized cost: 2024: $104,229; 2023: $121,868) 102,973  120,208
    Investment securities, held-to-maturity (Fair value: 2024: $694; 2023: $692) 791  793
    Property and equipment, net 5,276  5,082
    Operating lease right-of-use assets 2,858  3,382
    Other intangible assets 2,990  2,990
    Other assets, non-current 9,746  10,246
    Total assets$674,210 $570,671
          


    CLOVER HEALTH INVESTMENTS, CORP.
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (Dollars in thousands, except share amounts)
     
     June 30, 2024
    (Unaudited)
     December 31,
    2023
    Liabilities and Stockholders' Equity   
    Current liabilities   
    Unpaid claims$199,266  $135,737 
    Due to related parties, net 1,284   1,363 
    Accounts payable and accrued expenses 40,441   37,184 
    Accrued salaries and benefits 32,400   20,951 
    Deferred revenue 13   3,099 
    Operating lease liabilities 1,491   1,665 
    Other liabilities, current 843   1,017 
    Liabilities related to discontinued operations 48,773   60,099 
    Total current liabilities 324,511   261,115 
        
    Long-term operating lease liabilities 2,519   2,998 
    Other liabilities, non-current 22,292   20,164 
    Total liabilities 349,322   284,277 
    Commitments and contingencies   
    Stockholders' equity   
    Class A Common Stock, $0.0001 par value; 2,500,000,000 shares authorized at June 30, 2024 and December 31, 2023; 406,486,444 and 401,183,882 issued and outstanding at June 30, 2024 and December 31, 2023, respectively 41   40 
    Class B Common Stock, $0.0001 par value; 500,000,000 shares authorized at June 30, 2024 and December 31, 2023; 89,649,365 and 87,867,732 issued and outstanding at June 30, 2024 and December 31, 2023, respectively 9   9 
    Additional paid-in capital 2,517,959   2,461,238 
    Accumulated other comprehensive loss (2,259)  (2,370)
    Accumulated deficit (2,171,556)  (2,159,794)
    Less: Treasury stock, at cost; 14,574,401 and 7,912,750 shares held at June 30, 2024 and December 31, 2023, respectively (19,306)  (12,729)
    Total stockholders' equity 324,888   286,394 
    Total liabilities and stockholders' equity$674,210  $570,671 
            


    CLOVER HEALTH INVESTMENTS, CORP.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
    (Unaudited)
    (Dollars in thousands, except per share and share amounts)
            
     Three Months Ended
    June 30,
     Six Months Ended
    June 30,
     2024 2023
     2024
     2023
    Revenues:       
    Premiums earned, net (Net of ceded premiums of $102 and $113 for the three months ended June 30, 2024 and 2023, respectively; net of ceded premiums of $203 and $235 for the six months ended June 30, 2024 and 2023, respectively)$349,900 $314,383  $691,622  $631,469 
    Other income 6,360  5,755   11,560   10,661 
    Total revenues 356,260  320,138   703,182   642,130 
            
    Operating expenses:       
    Net medical claims incurred 248,347  244,262   513,509   519,051 
    Salaries and benefits 55,499  62,437   114,722   131,418 
    General and administrative expenses 44,424  41,710   88,993   99,354 
    Premium deficiency reserve benefit   (5,138)     (6,948)
    Depreciation and amortization 330  999   648   1,278 
    Restructuring costs 473  4,750   826   6,557 
    Total operating expenses 349,073  349,020   718,698   750,710 
    Income (loss) from continuing operations 7,187  (28,882)  (15,516)  (108,580)
            
    Change in fair value of warrants 17     17    
    Interest expense   7      7 
    Loss on investment      467    
    Net income (loss) from continuing operations 7,170  (28,889)  (16,000)  (108,587)
    Net income from discontinued operations 238  75   4,238   7,167 
    Net income (loss)$7,408 $(28,814) $(11,762) $(101,420)
            
    Per share data:       
    Basic weighted average number of Class A and Class B common shares and common share equivalents outstanding 487,483,087  479,163,752   487,575,520   479,819,237 
    Diluted weighted average number of Class A and Class B common shares and common share equivalents outstanding 495,179,955  479,163,752   487,575,520   479,819,237 
    Continuing operations:       
    Basic earnings (loss) per share$0.01 $(0.06) $(0.03) $(0.23)
    Diluted earnings (loss) per share 0.01  (0.06)  (0.03)  (0.23)
    Discontinued operations:       
    Basic earnings per share 0.00  0.00   0.01   0.01 
    Diluted earnings per share 0.00  0.00   0.01   0.01 
            
    Net unrealized gain on available-for-sale investments 301  316   111   2,659 
    Comprehensive income (loss)$7,709 $(28,498) $(11,651) $(98,761)
                   


    Operating Segments
            
     Insurance Corporate/
    Other
     Eliminations Consolidated
    Total
    Three Months Ended June 30, 2024(in thousands)
    Premiums earned, net (Net of ceded premiums of $102)$349,900 $ $  $349,900
    Other income 4,044  42,269  (39,953)  6,360
    Intersegment revenues   51,200  (51,200)  
    Net medical claims incurred 249,406  4,965  (6,024)  248,347
    Gross profit (loss)$104,538 $88,504 $(85,129) $107,913
                 


    CLOVER HEALTH INVESTMENTS, CORP.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
    (Dollars in thousands)
     
     Six Months Ended
    June 30,
     2024
     2023
    Cash flows from operating activities:   
    Net loss$(11,762) $(101,420)
    Adjustments to reconcile net loss to net cash used in operating activities:   
    Depreciation and amortization expense 648   1,278 
    Stock-based compensation 56,698   74,725 
    Change in fair value of warrants and amortization of warrants 17    
    Accretion, net of amortization (1,618)  (1,853)
    Accrued interest earned (463)  (289)
    Net realized gains on investment securities (5)  (19)
    Loss on investment 467    
    Premium deficiency reserve    (6,948)
    Changes in operating assets and liabilities:   
    Accrued retrospective premiums (31,816)  18,324 
    Other receivables (4,565)  6,960 
    Surety bonds and deposits     
    Prepaid expenses (99)  2,901 
    Other assets (2,125)  2,861 
    Healthcare receivables (2,575)  19,341 
    Operating lease right-of-use assets 524   157 
    Unpaid claims 63,450   (20,814)
    Accounts payable and accrued expenses 3,257   7,474 
    Accrued salaries and benefits 11,449   (4,311)
    Deferred revenue (3,086)  113,537 
    Other liabilities 1,954   281 
    Operating lease liabilities (653)  (508)
    Net cash provided by operating activities from continuing operations 79,697   111,677 
    Net cash (used in) provided by operating activities from discontinued operations (9,005)  20,528 
    Net cash provided by operating activities 70,692   132,205 
        
    Cash flows from investing activities:   
    Purchases of short-term investments, available-for-sale, and held-to-maturity securities (51,670)  (74,156)
    Proceeds from sales of short-term investments and available-for-sale securities    60,436 
    Proceeds from maturities of short-term investments, available-for-sale, and held-to-maturity securities 66,651   90,997 
    Purchases of property and equipment (842)  (605)
    Net cash provided by investing activities 14,139   76,672 
        
    Cash flows from financing activities:   
    Issuance of common stock, net of early exercise liability 23   1,118 
    Repurchases of common stock (1,772)   
    Treasury stock acquired (4,805)  (3,399)
    Net cash used in financing activities (6,554)  (2,281)
        
    Net increase in cash, cash equivalents, and restricted cash for discontinued and continuing operations 78,277   206,596 
    Cash, cash equivalents, and restricted cash, beginning of period for discontinued and continuing operations 176,494   186,213 
    Cash, cash equivalents, and restricted cash, end of period for discontinued and continuing operations$254,771  $392,809 
        
    Reconciliation of cash and cash equivalents and restricted cash for discontinued and continuing operations   
    Cash and cash equivalents$254,771  $310,079 
    Restricted cash    82,730 
    Total cash, cash equivalents, and restricted cash for discontinued and continuing operations$254,771  $392,809 
    Supplemental disclosure of non-cash activities   
    Performance year receivable$  $(377,239)
    Performance year obligation    377,239 


    CLOVER HEALTH INVESTMENTS, CORP.
    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
    ADJUSTED EBITDA (NON-GAAP) RECONCILIATION
    (in thousands)(1)
        
     Three Months Ended June 30,
     2024 2023
    Net income (loss) from continuing operations (GAAP):$7,170 $(28,889)
    Adjustments   
    Interest expense   7 
    Depreciation and amortization 330  999 
    Stock-based compensation 27,900  36,108 
    Premium deficiency reserve benefit   (5,138)
    Restructuring costs 473  4,750 
    Non-recurring legal expenses and settlements 319  2,108 
    Adjusted EBITDA (Non-GAAP)$36,192 $9,945 
           

    (1) The table above includes Non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. For a detailed explanation of these Non-GAAP measures, see Appendix A.

    CLOVER HEALTH INVESTMENTS, CORP.
    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
    ADJUSTED SG&A (NON-GAAP) RECONCILIATION
    (in thousands)(1)
     
     Three Months Ended June 30,
     2024
     2023
    Salaries and benefits$55,499  $62,437 
    General and administrative expenses 44,424   41,710 
    Total SG&A (GAAP) 99,923   104,147 
    Adjustments   
    Stock-based compensation (27,900)  (36,108)
    Non-recurring legal expenses and settlements (319)  (2,108)
    Adjusted SG&A (Non-GAAP)$71,704  $65,931 
        
    Total revenues (GAAP)$356,260  $320,138 
    Adjusted SG&A (Non-GAAP) as a percentage of revenue 20%  21%
            

    (1) The table above includes Non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. For a detailed explanation of these Non-GAAP measures, see Appendix A.

    CLOVER HEALTH INVESTMENTS, CORP.
    RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
    INSURANCE BENEFITS EXPENSE RATIO (NON-GAAP) RECONCILIATION
    (in thousands)(1)
            
     Three Months Ended June 30, Six Months Ended June 30,
     2024
     2023
     2024
     2023
    Net medical claims incurred, net (GAAP):$249,406  $242,839  $515,482  $517,343 
    Adjustments       
    Quality improvements 16,733   15,132   34,938   35,520 
    Insurance benefits expense, net (Non-GAAP)$266,139  $257,971  $550,420  $552,863 
            
    Premiums earned, net (GAAP)$349,900  $314,383  $691,622  $631,469 
    Insurance benefits expense ratio, net (Non-GAAP) 76.1%  82.1%  79.6%  87.6%
                    

    (1) The table above includes Non-GAAP measures. Non-GAAP financial measures are supplemental and should not be considered a substitute for financial information presented in accordance with GAAP. For a detailed explanation of these Non-GAAP measures, see Appendix A.

    CLOVER HEALTH INVESTMENTS, CORP.
    Appendix A
    Explanation of Non-GAAP Financial Measures

    Non-GAAP Definitions

    Adjusted EBITDA - A Non-GAAP financial measure defined by us as net loss from continuing operations before depreciation and amortization, loss (gain) on investment, stock-based compensation, premium deficiency reserve benefit, restructuring costs, and non-recurring legal expenses and settlements. Adjusted EBITDA is a key measure used by our management team and the board of directors to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operating plans. In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA provide useful measures for period-to-period comparisons of our business. Accordingly, we believe that Adjusted EBITDA provides investors and others useful information to understand and evaluate our operating results in the same manner as our management and our board of directors.

    Adjusted SG&A - A Non-GAAP financial measure defined by us as total SG&A less stock-based compensation and non-recurring legal expenses and settlements. We believe that Adjusted SG&A provides management, investors, and others a useful view of our operating spend as it excludes non-cash, stock-based compensation and expenses related to investments that management believes do not reflect the Company's core operating expenses. We believe that Adjusted SG&A as a percentage of revenue is useful to management, investors, and others because it allows us to measure our operational leverage as revenue scales.

    Insurance Benefits Expense Ratio - A Non-GAAP financial measure defined by us as benefits expense ratio ("BER"). We calculate our Insurance BER by taking the total of Insurance net medical expenses incurred and quality improvements, and dividing that total by premiums earned on a net basis, in a given period. Quality improvements include expenses associated with activities that improve health outcomes, as defined by the U.S. Department of Health and Human Services ("HHS"), as well as those directly tied to enhancing healthcare quality, such as the Company's spend on health information technology, wellness and prevention programs, initiatives to reduce hospital readmissions, and our clinically focused Member Rewards program. We believe our Insurance BER is useful to management, investors, and others because it offers a clearer and more accurate representation of our investment in healthcare quality and member engagement, and gives a comprehensive view of costs related to maintaining and improving the quality of care of our members, which is crucial for sustaining member satisfaction and adherence to treatment regimens.


    Primary Logo

シェアする