Clover Health Investments (CLOV) Q2 2024 earnings summary

Executive summary

• Achieved first positive GAAP net income as a public company in Q2 2024, reporting $7.2 million from continuing operations, a turnaround from a $28.9 million loss in Q2 2023.

• Adjusted EBITDA rose to $36.2 million in Q2 2024, up from $9.9 million in Q2 2023, reflecting strong business fundamentals and SG&A optimization.

• Revenue for Q2 2024 grew 11% year-over-year to $356.3 million, driven by higher risk adjustment revenue and member retention.

• Upgraded full-year 2024 guidance for insurance revenue and Adjusted EBITDA profitability, reflecting continued momentum in Medicare Advantage performance.

• Launched Counterpart Health, a SaaS and tech-enabled services platform, and exited the ACO REACH Program, classifying related results as discontinued operations.

Financial highlights

• Q2 2024 insurance revenue grew 11% year-over-year to $349.9 million; gross profit rose 42% to $105 million.

• Insurance MCR improved to 71.3% from 77.2% year-over-year; BER improved to 76.1% from 82.1%.

• Adjusted SG&A as a percentage of revenue was 20% in Q2 2024, down from 21% in Q2 2023; total SG&A down 4% year-over-year.

• Salaries and benefits fell 11% to $55.5 million, mainly due to lower share-based compensation.

• Cash, cash equivalents, and investments totaled $482.8 million at quarter-end.

Outlook and guidance

• Full-year 2024 insurance revenue guidance raised to $1.35–$1.375 billion.

• Adjusted EBITDA guidance increased to $50–$65 million for 2024.

• Insurance MCR expected at 77–79% and BER at 81–83% for 2024; Adjusted SG&A projected at $270–$280 million.

• Year-end unregulated liquidity expected between $145–$165 million.

• Management expects cash, investments, and projected cash flows to meet operating and regulatory needs for the next 12 months.