Oscar Health (OSCR) Investor Day 2024 summary

Vision and strategy

• Introduced a dynamic three-year strategic plan, updated annually, focused on achieving at least 20% annual revenue growth and 5% operating margin by 2027, without relying on enhanced subsidies.

• Mission centers on making a healthier life accessible and affordable for all, leveraging healthcare and technology expertise.

• Four strategic objectives: achieve ~20% revenue CAGR and ~5% operating margin by 2027, enhance member experience, externalize technology, and expand the individual market with ICHRA.

• Prioritizing near-term profitability, ACA footprint expansion, and leveraging technology to empower the broader healthcare system.

• Compensation for leadership is tied to three-year EBIT targets to ensure alignment with strategic objectives.

Financial guidance and capital allocation

• Reaffirmed 2024 guidance: $8.3B–$8.4B revenue, 20.5%–21.0% SG&A ratio, 80.2%–81.2% MLR, and $125M–$175M Adjusted EBITDA.

• Long-term targets include 20% revenue CAGR and 5% operating margin by 2027, with EPS expected to exceed $2.25 per share.

• Positioned for strong cash flow and capital generation, with ability to self-fund growth and future allocation priorities.

• Fixed cost leverage, technology-driven efficiencies, and disciplined pricing are key to margin improvement.

• Capital allocation will prioritize organic growth, with flexibility for optimization and potential share buybacks if excess capital persists.

Growth strategy and market expansion

• Membership grew 150% since 2021, reaching ~1.5 million as of April 2024, and ACA market share increased from 4% to 7% across 18 states.

• Growth pillars: disciplined footprint expansion, innovative products/experiences, and robust total cost of care management.

• Plans to expand ACA reach from 50% to 70% by 2027, targeting entry into 150+ new MSAs, with further upside from ICHRA and potential subsidy extensions.

• Existing markets expected to drive 50% of incremental growth, new markets 40%, and product innovation (including ICHRA) the remainder.

• Product innovation includes culturally tailored offerings, chronic condition plans, and technology-enabled care journeys.