CLOV - Earnings call transcript Q3 2024 | Clover Health Investments, Corp.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Please stand by, your program is about to begin.

If you need assistance on today's conference, please press star zero. Ladies and gentlemen, good afternoon and welcome to the Clover Health Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow with prepared remarks. you on ask your if press question, time, one star telephone that wish a to please At keypad.

Ryan the As being a ahead. over turn Please recorded. is Relations to call I would Clover reminder, now like go today's Health. Schmidt, Investor call for to

Ryan Schmidt

everyone. afternoon, Good

XXXX Executive Financial Joining me Officer, Kuipers, company's Chief Quarter and today Andrew Toy, the company's to Peter on are discuss Clover Officer. our Third call results Health's Chief the

we that actual of well non-GAAP on that, be referenced, expectations the can and measures available about be risks company's as a measures find website Clover as turn today's the is I'd supplemental You to materially our other most a Factors will report filings, materials in risk Presentations including of may Events Health including are now recorded, that replay can section Andrew. I'll filings. Information webcast GAAP about being in to are and our statements to measures, found uncertainties, website. our the reconciliation earnings that Form financial XX-K factors the in on like including make With in to today's during recent subject SEC Investor in from results accompanying deck may those recent future our detailed SEC expectations the the release of of available forward-looking performance. investor cause and differ annual Investor to website. over call call at most investors.cloverhealth.com. This and slides, press Relations the section also the you in caution section

Andrew Toy

you, thank everyone, today. and Ryan, for joining Thanks, us

Clover amount excited tremendous we're talk a had to that have progress through. of at We

positive EBITDA quarter delivered we cash flow. of another Firstly, profitability adjusted and meaningful, operating

improving are our guidance. we such, full-year EBITDA adjusted As

profitable I here. We and have that on executed have well our Clover, feel we very delivering a emphasized focus always

particularly wide position the network industry-leading fee-for-service as loss where by because part proud the the cost our by as technology-powered medical quarter This manage another continued performance Advantage being the plans is this to management. We're revenue value Medicare independent largely care. in PMPM of ratios, of expense well performance we driven network. a other on see Secondly, lot both are struggling we driven total of of achieved of strong this of

we flagship most upgraded Thirdly, PPO have a are to received XXXX. ratings XXXX, star year our proud year impacting plan for rating for payment our for plans, four-star notably

clinical to to which unconventional, while us of vulnerable of of XXXX significantly differentiated on Assistance-powered benefits. By Clover most membership. to We've focuses $XX opportunity generates EBITDA maintaining our we've our strong value. In we demonstrated timing strong network offering particularly making well be model in and ample out of expand PPO lives. improved care is market care, insurance closure. are position. proud our acts HEDIS our of results delegated believe dropping rates. With AEP, country ratings, and our on to quality. Between focus good and loss the fact, of we the to for providers star plan. high-performing with benefit highest and maintaining a better forced gap edging Assistance, struggled in competitive entire core are received score this business, XXXX. members, ratings Over X.XX, our opportunity. home members on both have profitability even physicians HMOs. practice, XX% for on GPS financial score four-star appealing a in plans Medicare XX,XXX core cost there networks, is what with and prioritizing and increased having invest over our a adjusted and adjusted back Clover pulling in Instead, are These effectively of highly care we by very our from X,XXX plan make the measures new care in in members and highlighted over managing driven delivered driven not The or to membership star closures, we retention over product physicians insurance is our eligibles, that physicians technology-first acquiring by our to base growth We plans strength with of contracts strategy, a historically are financial this our that throughout internal we've This members, are EBITDA as results almost profitability almost technology, around Clover high-performing leveraging no ratios. I'm incentives year-to-date a into about We've other manage are have pay managed up Medicare traditional total and retreats excited key physicians share believe Clover by very for value-based MA We're strategic traditional quality plan, markets. position our network these strong Assistance. Unlike going being growth meaningful Other maintain and plans Clover million Clover's strong membership that differentiator using our cost Advantage performance use do our our their every and to own we risk. set which two-thirds care on and we

back We're into we the with to a be positioned To XXXX. though, our focusing opportunity this growth advantage on of model by our annual clear, of window. about XXXX the us have ability strong new discuss overall, too the our a growth opportunity management our performance focus returning but obviously intent business member period performance of will the to strength while demonstrating in good our front onto early consolidated future, posture we our talk our to strong detail, member cohorts more of our fueling XXXX enrollment is in by care profitability to in feel members having on platform. We'll growth clear and growth profitable take While about we very it's maintaining cohorts. existing bringing for be clear grow in believe in regarding not on our a of a how one-year

rating proud plans. By achieving very will received EBITDA, continue profitability recently for accelerate we'll we have a rating while flywheel tailwinds PPO four-star setting guidance, growth amidst the company positioned to products As achieved continuing to EBITDA spectrum. as it for again our dynamic I'll star we have summary, us the to to in our And expand quarter, market the Peter members. going XXXX allow hand of well to that same XXXX improvement and flagship during the I year us are adjusted as adjusted very to year continue invest this rating, our to and the we financial payment time full again, progress growth. industry our at proud into saw profitability differentiate star's degradation, came for broader over our have mentioned, accomplishments I'm our update. where team's In for up improved a our now meaningful

Peter Kuipers

Similarly, Gap and the in full third significantly and then $X for by review adjusted $XX strong. XXXX. Those as by guidance and further and of profitability million our year, million million last of year-to-date updated the by are same million EBITDA quarter XXXX, driven the improved deliver fundamentals adjusted year $XX the a during our begin have meaningfully for and yesterday's year Thanks, our million to ability this business improved quarter continually compared of care. $X for we year-to-date continuing significantly goals, our quarter execute, loss covering to of SDMA compared same as strong $XX drive a durable Andrew. quarter improved by million operations to momentum that prime a performance compared so highlights, EBITDA the I third total I'm profit loss continued, EBITDA far with and third to year. basis, quarter managing period delivering upon of optimization. cost MA adjusted this will to to the in impressed this $XX the momentum while financial XXXX. On

our cost to We control to business industry-leading care. have insurance ratios of benefit continued by ability driven total deliver for

[XX.X%] this year. BER of the XX.X% During insurance expense from in XXXX. XX% of last the or in quarter year period to same Similarly, MCR quarter our third third ratio to compared XXXX, improved improved to XX.X% the benefits insurance

benefits our the revenue generally and compared medical Part trade line as to quarter costs, Specifically, supplemental expectations. are during and with our within D in costs last inpatient

operational of of outcomes performance Our earlier maturation, both at on ability year-over-year. strong membership strong insurance was in was member revenue and was XXX returning the development driven growth represent market PPD basis, quarter. On and to experienced we market which of continued third year-to-date to during of care over better year-to-date continued quarter, MA core was intra-year care, have total accompanied by plan The On cost growth retention, cost points and focus and X% XX.X%, BER third MCR economics, performance total by for of a or year-to-year strong year-to-year. of last manage lower health basis, million, the criteria our X% deliver quarter. $XXX positive our was XX.X% revenues growth basis a solid our growth. Similar billion to ability improvements representing of $X.XXX

for PPD As occurs modeling our and it a built to is reminder, real-world finalized. claim when performance exceeds

continued PPD. MA with we it would level, continued coupled historical varying IBNR amounts of logical the our a is of normalization more outperformance have our that Given to

our performance, upon earlier has to BER year-to-date sustainable cost I lower strong underlying and lowered touched momentum the our While medical business management also that market driving development levels. effectively is

focus as $XXX continue SG&A. of moving of continue favorable rationalization third Now year-to-date with our offset strategically total and enhance XXXX. opportunity XX% to with and cost-saving versus SG&A SG&A same $XX quarter, investments period XX% workforce to total of increased to million associated SG&A member decreased efficiencies a period. On result X% will compared XX% for the year-to-year to and our devalue a business. decreased see our SG&A from came delight. That area reinvest decided adjusted third inter-year a an lower our year, growth. comparable quarter the strong have initiatives operational said, with profitability into pleased the of adjusted the a and to announced Both framework of a impact In to on we basis, given in ecosystem SG&A decreased profile, operational periods We're last our as in year-to-year the by optimization million the new partially inter-year

membership as we growth As and for during XXXX ability market Andrew invest volatility. outperform our opportunity period result XXXX in to beyond strongly to ratings, mentioned of a of and we star performance, that improved believe a the our earlier, positioned are

members, optimal that now in improving to do to growth. These spend believe pro-assistive support We R&D annual as of further well on plan our growth-focused strong the the continued outcomes well performance. including this our is we spend creative capabilities. enrollment quality-focused to focused for enhance as further to reasons, positions time additional light these investments AEP, investments For period, or include to that make increase long-term

As will that such, our guidance. we increased you notice SG&A have XXXX full-year

EBITDA our is important Although we're XXXX our also momentum. note it business to total increasing guidance underlying reflect to very that year

We continue to that to in near-term believe in returns long-term of of the our future. any trajectory drive business strong will the prove the assessments

subsidiary third the unregulated and to we XXXX and balance anticipate and basis impacted to million sheet, participation. related assessments XXXX unregulated of $XXX quarter, $XXX REACH entity level. In be parent consolidated cash a the payment cash, with liquidity to final levels to ended on by Turning we our equivalents, $XX unrestricted fourth ACO the the the quarter million at restricted of totaling million

and was IBNR for cash business We our end. of operate am also to continue from our year million. I activities million, our already that in and a the levels bringing $XX balance growth. momentum the proud activities $XXX operating our strength us flow effective year-to-date enables improve position operating flow further continues sheet to expect to of to Cash by normalization quarter strong from third further strong

business an in fundamentals. I XXXX light full strong the momentum Next, continued will to provide year our update of and guidance

are shifts the our reaffirming reflecting our billion lower by in revenue mix. of range member $X.XXX and driven insurance $X.XXX tracking end XXXX top-line are intra-year continued growth. That between guidance said, of strong year-to-year likely billion, We we the towards

we ratios result, improving as We are unit continue and follows. on well very our economics, a to execute cost as

guidance We XXXX to improving be XX% between insurance are BER XX%. our and

We be between improving XXXX guidance XX%. are XX% insurance and our MCR to

million initiatives. $XXX to We raising reflecting between our anticipated quality XXXX $XXX investments our SG&A be and million, are XXXX adjusted to guidance drive growth and

our EBITDA we be ratios our full-year already summary, million. In We industry-leading are between improved million guidance ability and execute opportunities. our adjusted the and profitability $XX balance to with to sheet $XX have created goals benefit exceeded XXXX on growth our strong and increasing

We have recent four-star rating the recently achieved during most rating a cycle.

into benchmark rates to initiatives, quality XXXX. invest and forward to the strength opportunity X% quality bonus member the for look with benefits, growth. this model. We validating year allows the starting associated further differentiated of payment receiving Sort of to our the us That rating,

Beyond this during Iowa Medicare Midwest. extension payers health. It have good fast assistance own the second-in-service the business the patients, a year pipeline with for our and third we strong Demonstrating the utilize third-party five quarter, business, for we counterpart partnership counterpart for momentum momentum providers. marking Advantage in our Insurance MSSP solution a into Clinic announced in MA and and risk-bearing another inaugural to provides

While and this in offering. second-in-service further sharing this insufficient. We year our still guidance in and counterpart and innings fast is develop exciting, be expect more as financial we early impact detailed the we're the and to expectations look counterpart future to forward grow revenue

turn me back let the closing to Now Andrew for comments. call

Andrew Toy

first quarters Clover achievements the the of team of Thanks, has three Peter. delivered over the proud I'm year. the

adjusted EBITDA profitability. and demonstrating increasing First, we our to have membership profitability cohorts our been for ability our care

are wide and ratios Medicare still fee-for-service Advantage almost a providers, of network on whom arrangements. on delivering we are industry-leading of all performance loss Second,

growth we achieved financial this strong Third, with have on positioning momentum multi-year a opportunity. us go-forward our rating strong and network, same star fueling performance

Clover by is our and platform this enabled of care Assistant. All differentiated technology,

other the via We about services our plans health, bring and be to opportunity MA to offering. to excited tech-enabled progress counterpart providers and fast long-term very and technology our continue value-based

reminder core our significantly to a plan our As current and profitably of expand new strategy, to plan markets, we geographies. also we own and grow plans to MA our within

that for others for our improving X,XXX managed particularly results of the fact have highest results, in bring for our of offering plans. Since model and Advantage score with Medicare in Most only wide plans physicians. to we care in we year, this we the core health has we unparalleled area component entities performance the Stars earlier don't we fee-for-service, the compelling where this over had gives care providers the Not able we real platform, significant managed plan allows announced to that what measures find since offer interest the received fact interest via independent markets strong an partnerships plan, us that our MA is HEDIS drive members. and counterpart particularly do For fit. product performance, this but specialize solution care local no launched excellent have of we HEDIS PPO market accelerated in have us so the and this ecosystem, are network,

many innings. is While players counterpart We more exciting, have we're pressures face the assistance healthcare signaled demand providers still the increase believe that will for early this in and as this that only industry and insurers more market year.

As with it inflection let's up XXXX to we're said, that, come to shorter health questions. and us both partners industry be sales ride. go to in fruition. organizations larger and cycles point, groups looking along for at have signing is XXXX partners, exciting engage will to Stay truly we making an expect more smaller additional including the longer the prospective STARS partners the do about to to the tuned With when cycles. That for we great a counterpart, the sales onboard headwinds in future. Clover more time have updates

Operator

taking be [Operator questions now We'll first from will from Jonathan Thank research Young our Instructions]. Clover's We you. question of take UBS. analysts.

Jonathan Young

like you're sounds how up for AEP is pretty about It good XXXX. shaping feeling

the if helping seeing out could you you're Just on there any more and members. STARS what stands and attract you is improvement what color provide rating

Andrew Toy

couple AEP, a in Definitely of things. different

richness, does also the means four-star right our we the in XXXX, plan stars maintained of everyone As because and we four What are down competitors payment we general our ratings, affect our positioned so plan XXXX, rating plan of else year overall and in and finder a but now. STAR is are retreat have a the four-star going appearing the plans some that product reminder, in others. richness the are well our as product very to year does comparison two, between between due it affect

material good AEP sit AEP, a feel we rating. And product to would perspective. So even basis. good even feel the from lead did note relative this I STAR have about an that intra-year growth We up where we richness on before about we

as So momentum of through we're some well. carrying that

our growth, So how to go we excited to well. feel manage overall, back cohorts about good as really

Jonathan Young

just investments this the guess, then can I And relation And those of doing, the quarter nature investments much was about are in PPD one-time quarter? you're in and you it in the benefit much of here, also, to in what fourth how talk permanent? how kind be will versus

Peter Kuipers

Peter. It's

as in about, So investments a quarter as should portion big of that you marketing. the you the in go-to-market fourth far is know, SG&A, think

strong as investment just on. and how Given on later is then of we'll chunk the going feel that And discussed is more initiatives. another the well, quality really quality, we good Andrew AEP fact disclose increased

clinical platform. here that I and of think right? also as the PPD, prepared continue invest in So prior also call And to as the change, disclose we than know, PPD, we'll far new then on ecosystem. the it HEDIS giving normalizing course, remarks, talked it's a time, about the our don't specifics you we quarters. impact And score, improve we're in our over was smaller but of also, and as IBNR

Operator

Partners. from We'll our of next question French take John Leerink

John French

bids. wondering, was the factoring Thanks. drug how IRA you on talk and its viability were if plan change about costs you into in could your into I your

Andrew Toy

getting pretty we good we versus I it's coming next you'll actual offering, to a given amount Overall, much going subsidy we about subsidy, competitors bit affects the feel maintain should our industry, bid quite from that where is basically of that we bit of feel So going the going exactly disclosing amount test while bit the of against was as of plan it be that. had else where this react amount shape. a good to much markets. phased little be those need we to see our netted think in, in experience. But our the we be What a it way something year everyone think retreat how mechanics the We like versus we, probably the of we the the at provide. the more see out, strength that is the looked bid, that a claims benefit we we direct not being that products, into IRA of is how actual D of were where in to we're in, we're in did to pretty able also in in of variability, Part revenue

So to we D expect the for quite actually our be offering favorable of Plan plan richness. purposes

Operator

I'd [Operator time. the Instructions]. Mr. return Toy have we And questions to it no call further any this be appears concluding at happy remarks. that to for

Andrew Toy

Thank Thanks, right. your all you you for everyone. questions. Thank us All today. for joining

said I As performance results proud feel of ahead quarter of I the of and very investments I'm the to very our really team the we've the now date. forward And this phase Star that the opportunity much results that feel good year that in and earlier, excellent. outlined in of us and is the growth to generating we're is looking and us CARE today. platform about had front cohorts. I our that quality, we've on

on next continue during our earnings our results adding to everyone. looking full the and our So look our to Thanks to our call. strength And call. maintain forward results side sharing again we're to of growth, our joining growth. so for performance financial AEP Thanks and the year be membership much, we top-line and and

Operator

quarter Clover This XXXX Webcast. concludes Health's call earnings on third today's

a at now time. your disconnect line day. may Have You wonderful this

Clover Health Investments (CLOV) 6 Nov 242024 Q3 Earnings call transcript