Alignment Healthcare (ALHC) Q2 2024 earnings summary

Executive summary

• Health plan membership grew 56.1% year-over-year to 175,100 as of June 30, 2024, surpassing guidance and making the company one of the fastest-growing Medicare Advantage plans nationally, driven by expansion across 53 markets in 6 states.

• Total revenue for Q2 2024 reached $681.3 million, a 47.3% increase year-over-year, reflecting strong membership growth.

• Adjusted EBITDA was $6.0 million, at the high end of guidance and positive for the quarter, while net loss improved to $24.0 million from $28.5 million year-over-year.

• Investments in member experience, technology, clinical infrastructure, and data platforms have driven growth and improved retention, with voluntary disenrollment rates improving by 22% year-over-year.

• The company is focused on profitable growth, leveraging operational visibility and control to manage MBR and scale efficiently.

Financial highlights

• Q2 2024 revenue was $681.3 million, up 47.3% year-over-year; revenue excluding ACO REACH was $682.0 million, up 57.8%.

• Adjusted gross profit was $77 million; MBR of 88.7%, a 220 basis point improvement from Q1.

• Adjusted EBITDA was $6.0 million, compared to $(2.1) million in Q2 2023; net loss was $(24.0) million, improved from $(28.5) million year-over-year.

• SG&A was $88 million; adjusted SG&A $71 million, up 27% year-over-year; adjusted SG&A as % of revenue (ex-ACO REACH) improved by 250 basis points to 10.4%.

• Cash, cash equivalents, and short-term investments totaled $363.7 million as of June 30, 2024.

Outlook and guidance

• Q3 2024: Membership expected at 176,000–178,000; revenue $655M–$665M; adjusted gross profit $75M–$81M; adjusted EBITDA $0–$12M.

• Full year 2024: Membership 178,000–180,000; revenue $2.61B–$2.64B; adjusted gross profit $280M–$310M; adjusted EBITDA -$12M to $12M.

• Year-end membership guidance raised by 8,000 due to outperformance; midpoint of membership guidance up 16,000 since January.

• 2025 targets: At least 20% growth in both membership and revenue, with margin expansion and adjusted EBITDA profitability.

• Liquidity is expected to be sufficient to fund operations and capital needs for at least the next 12 months.