Clover Health Investments, Corp. (NASDAQ: CLOV) ("Clover," "Clover
Health" or the "Company"), a physician enablement company committed
to bringing access to great healthcare to everyone on Medicare,
today reported financial results for the first quarter 2023.
Management will host a conference call today at 5:00 p.m. ET to
discuss its operating results and other business highlights.
For the first quarter 2023, the Company reported
revenue of $527.8 million and net loss of $72.6 million. Compared
to the first quarter 2022, Insurance revenue grew by 14% to $317.1
million, and MCR improved to 86.6% from 96.4%. As planned,
Non-Insurance revenue declined by 65% to $205.8 million, and MCR
improved to 96.1% from 99.8%. Adjusted EBITDA in the first quarter
2023 improved by $40.4 million to $(30.5) million compared to
the first quarter 2022 of $(70.9) million.
“We are off to a fantastic start for 2023, and
our first quarter results demonstrate strong momentum to build upon
throughout the year,” said Clover Health CEO Andrew Toy. “I am
particularly proud of our continued Insurance revenue growth and
significantly improved MCR. In addition, Clover Assistant continues
to drive value across our entire organization through its ability
to help physicians with the early identification and care
management of chronic diseases. I am also especially pleased that,
based on our strong start to 2023, we are already able to improve
our full year 2023 guidance for both the Insurance segment and
consolidated Clover Health.”
“Our first quarter results demonstrate the
rapid, positive strides we have made on our path towards
profitability,” said Clover Health CFO Scott Leffler. “During the
first quarter, our Insurance segment delivered meaningful revenue
growth while improving its MCR materially by nearly 1,000 basis
points. These improvements are reflective of actions we have taken
as part of our more balanced approach to profitability over growth.
Similarly, our Non-Insurance business performance was reflective of
that segment’s previously disclosed strategic focus to drive
profitability by partnering with a narrower group of participating
providers. Finally, we believe our liquidity position is sufficient
for our expected 2023 operating needs."
Key Company highlights are as follows:
Dollars in Millions |
|
Q1'23 |
|
Q1'22 |
Total revenue |
|
$ |
527.8 |
|
|
$ |
874.4 |
|
Insurance revenue |
|
$ |
317.1 |
|
|
$ |
278.2 |
|
Non-Insurance revenue |
|
$ |
205.8 |
|
|
$ |
594.9 |
|
Insurance MCR |
|
|
86.6 |
% |
|
|
96.4 |
% |
Non-Insurance MCR |
|
|
96.1 |
|
|
|
99.8 |
|
Salaries and benefits plus
General and administrative expenses ("SG&A") (1) |
|
$ |
129.4 |
|
|
$ |
126.8 |
|
Adjusted Salaries and benefits
plus General and administrative expenses ("Adjusted SG&A")
(non-GAAP) (1)(2)(3)(4) |
|
|
85.7 |
|
|
|
83.6 |
|
Net loss |
|
|
(72.6 |
) |
|
|
(75.5 |
) |
Adjusted EBITDA (non-GAAP)
(3)(4) |
|
|
(30.5 |
) |
|
|
(70.9 |
) |
(1) 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 consolidated financial statements.(2) Beginning
with the third quarter of 2022, we updated the name of our Adjusted
Operating Expenses (non-GAAP) metric to Adjusted SG&A
(non-GAAP). Please refer to footnote 4 for the updates to Adjusted
SG&A (non-GAAP) beginning in the first quarter of 2023.(3)
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,
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.(4) Beginning in the first quarter 2023, we updated our
definition and presentation of Adjusted EBITDA (non-GAAP) and
Adjusted SG&A (non-GAAP) to exclude restructuring costs and
non-recurring legal expenses and settlements. Restructuring costs
and non-recurring legal expenses and settlements are now being
excluded because management believes that restructuring costs and
non-recurring legal expenses and settlements do not reflect the
Company's underlying fundamentals and operating expenses relating
to its core businesses or its actual recurring cash expense. The
prior period figure has been revised to conform to the updated
definition and presentation. For additional information, see the
definitions of "Adjusted EBITDA (non-GAAP)" and “Adjusted SG&A
(non-GAAP)” in Appendix A.
Financial OutlookFor full-year
2023, Clover Health is providing its guidance as follows:
- Insurance revenue
is expected to be in the range of $1.18 billion to $1.23 billion in
2023, a growth rate of 9% - 13% as compared to full year 2022
Insurance revenue.
- Insurance MCR is
expected to be in the range of 87% - 89% in 2023.
- Non-Insurance
revenue is expected to be in the range of $0.75 billion to $0.80
billion in 2023.
- Non-Insurance MCR
is expected to be in the range of 98% - 100% in 2023.
- Adjusted SG&A
(non-GAAP)(1) is expected to be between $315 million and $325
million.
- Adjusted EBITDA
(non-GAAP)(1) is expected to be between ($125 million) and ($175
million).
(1) Reconciliations of projected Adjusted
SG&A (non-GAAP) to projected SG&A, and projected Adjusted
EBITDA (non-GAAP) to Net loss, the most directly comparable GAAP
measures, are not provided because Stock-based compensation
expense, 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. 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.
Lives under Clover
Management
|
March 31, 2023 |
|
March 31, 2022 |
Insurance members |
83,794 |
|
85,026 |
Non-Insurance
beneficiaries |
53,616 |
|
172,416 |
Earnings Conference Call Details
Clover Health's management will host a
conference call to discuss its financial results on Tuesday, May 9,
at 5:00 PM Eastern Time. A live webcast of the call, together with
the related materials, can be accessed from Clover Health's
Investor Relations website at investors.cloverhealth.com, and an
on-demand replay will be available on the same website following
the call.
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 release include, but are not
limited to, statements under "Financial Outlook" and statements
regarding expectations relating to potential improvements in
Insurance MCR, Non-Insurance MCR, operating expenses, and the
number of Clover Health's Insurance members, as well as the
statements contained in the quotations of our executive officers,
including expectations related to Clover Health's "path to
profitability," liquidity position and other expectations as to
future performance, operations and results. 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 in this press release. Such risk factors include, but are
not limited to, those related to: Clover Health's ability to
increase the lifetime value of enrollments and manage medical
expenses; changes in CMS' risk adjustment payment system;
challenges in expanding our member and beneficiary base or into new
markets; Clover Health's exposure to unfavorable changes in local
benefit costs, reimbursement rates, competition and economic
conditions; the impact of litigation or investigations; changes or
developments in Medicare or the health insurance system and laws
and regulations governing the health insurance markets; the current
and future impact of the COVID-19 pandemic and its variants on
Clover Health's business and industry; the adoption and usage of
Clover Assistant; the timing and market acceptance of new releases
and upgrades to Clover Assistant; and the successful development of
our Non-Insurance operations and the degree to which our offerings
gain market acceptance by physicians. Additional information
concerning these and other risk factors is contained in our most
recent Annual Report on Form 10-K filed with the Securities and
Exchange Commission (the "SEC"), including the Risk Factors section
therein, and in our other filings with the SEC. The forward-looking
statements included in this 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 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
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
and Other Items."
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 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. We operate two
distinct lines of business: Insurance and Non-Insurance. Through
our Insurance line of business, we provide PPO and HMO Medicare
Advantage plans in several states, with a differentiated focus on
our flagship wide-network, high-choice PPO plans. Our Non-Insurance
line of business similarly aims to reduce cost-of-care while
enhancing the quality of care for patients enrolled in Original
Medicare.
Visit: www.cloverhealth.com
Investor Relations Contact:Ryan
Schmidtinvestors@cloverhealth.com
Press Contact:Andrew
Still-Baxterpress@cloverhealth.com
|
CLOVER HEALTH INVESTMENTS, CORP. AND SUBSIDIARIESCONSOLIDATED
BALANCE SHEETS: SELECTED METRICS(in thousands) |
|
|
March 31, 2023 |
|
December 31, 2022 |
Selected Balance Sheet
Data: |
|
|
|
Cash, cash equivalents, restricted cash(1), and investments |
$ |
635,200 |
|
$ |
555,293 |
Total assets |
|
1,453,589 |
|
|
808,620 |
Unpaid claims |
|
141,258 |
|
|
141,947 |
Total liabilities |
|
1,130,482 |
|
|
451,733 |
Total stockholders' equity |
|
323,107 |
|
|
356,887 |
(1) Restricted cash relates to $82.7 million
held in escrow in compliance with a CMS guarantee arrangement in
our Non-Insurance business. We expect to settle the related
obligation during fiscal year 2023, after which we expect the
associated guarantee arrangement to be released by CMS.
|
CLOVER HEALTH INVESTMENTS, CORP. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Dollars in thousands, except share amounts) |
|
|
|
|
|
Three Months EndedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
Revenues: |
|
|
|
Premiums earned, net (Net of ceded premiums of $122 and $119, for
the three months ended March 31, 2023 and 2022, respectively) |
$ |
317,086 |
|
|
$ |
278,169 |
|
Non-Insurance revenue |
|
205,783 |
|
|
|
594,898 |
|
Other income |
|
4,906 |
|
|
|
1,312 |
|
Total revenues |
|
527,775 |
|
|
|
874,379 |
|
|
|
|
|
Operating expenses: |
|
|
|
Net medical claims incurred |
|
472,490 |
|
|
|
861,722 |
|
Salaries and benefits |
|
70,207 |
|
|
|
69,091 |
|
General and administrative expenses |
|
59,215 |
|
|
|
57,697 |
|
Premium deficiency reserve benefit |
|
(1,810 |
) |
|
|
(27,476 |
) |
Depreciation and amortization |
|
279 |
|
|
|
826 |
|
Total operating expenses |
|
600,381 |
|
|
|
961,860 |
|
Loss from operations |
|
(72,606 |
) |
|
|
(87,481 |
) |
|
|
|
|
Interest expense |
|
— |
|
|
|
403 |
|
Gain on investment |
|
— |
|
|
|
(12,394 |
) |
Net loss |
$ |
(72,606 |
) |
|
$ |
(75,490 |
) |
Basic and diluted weighted
average number of Class A and Class B common shares and common
share equivalents outstanding |
|
478,805,067 |
|
|
|
473,028,651 |
|
|
Operating Segments |
|
|
|
Insurance |
|
Non-Insurance |
|
Corporate/Other |
|
Eliminations |
|
Consolidated Total |
Three Months Ended
March 31, 2023 |
|
(in thousands) |
Premiums earned, net (Net of ceded premiums of $122) |
|
$ |
317,086 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
|
$ |
317,086 |
Non-Insurance revenue |
|
|
— |
|
|
205,783 |
|
|
— |
|
|
— |
|
|
|
205,783 |
Other income |
|
|
1,839 |
|
|
428 |
|
|
17,310 |
|
|
(14,671 |
) |
|
|
4,906 |
Intersegment revenues |
|
|
— |
|
|
— |
|
|
23,231 |
|
|
(23,231 |
) |
|
|
— |
Net medical claims
incurred |
|
|
274,504 |
|
|
197,701 |
|
|
3,448 |
|
|
(3,163 |
) |
|
|
472,490 |
Gross profit (loss) |
|
$ |
44,421 |
|
$ |
8,510 |
|
$ |
37,093 |
|
$ |
(34,739 |
) |
|
$ |
55,285 |
|
CLOVER HEALTH INVESTMENTS, CORP. AND SUBSIDIARIES |
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
ADJUSTED EBITDA (NON-GAAP) RECONCILIATION |
(in thousands)(1) |
|
|
|
|
|
Three Months EndedMarch 31, |
|
|
2023 |
|
|
|
2022 |
|
Net loss: |
$ |
(72,606 |
) |
|
$ |
(75,490 |
) |
Adjustments |
|
|
|
Interest expense |
|
— |
|
|
|
403 |
|
Depreciation and amortization |
|
279 |
|
|
|
826 |
|
Gain on investment |
|
— |
|
|
|
(12,394 |
) |
Stock-based compensation expense |
|
38,617 |
|
|
|
40,640 |
|
Premium deficiency reserve benefit |
|
(1,810 |
) |
|
|
(27,476 |
) |
Restructuring costs |
|
1,807 |
|
|
|
— |
|
Non-recurring legal expenses and settlements |
|
3,258 |
|
|
|
813 |
|
Expenses attributable to Seek Insurance Services, Inc. |
|
— |
|
|
|
1,374 |
|
Expenses attributable to Character Biosciences, Inc. |
|
— |
|
|
|
357 |
|
Adjusted EBITDA (non-GAAP) |
$ |
(30,455 |
) |
|
$ |
(70,947 |
) |
(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. AND SUBSIDIARIESRECONCILIATION OF
NON-GAAP FINANCIAL MEASURESADJUSTED SG&A (NON-GAAP)
RECONCILIATION(in thousands)(1) |
|
|
Three Months Ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
Salaries and benefits |
$ |
70,207 |
|
|
$ |
69,091 |
|
General and administrative
expenses |
|
59,215 |
|
|
|
57,697 |
|
Total SG&A |
|
129,422 |
|
|
|
126,788 |
|
Adjustments |
|
|
|
Stock-based compensation expense |
|
(38,617 |
) |
|
|
(40,640 |
) |
Restructuring costs |
|
(1,807 |
) |
|
|
— |
|
Non-recurring legal expenses and settlements |
|
(3,258 |
) |
|
|
(813 |
) |
Expenses attributable to Seek Insurance Services, Inc. |
|
— |
|
|
|
(1,374 |
) |
Expenses attributable to Character Biosciences, Inc. |
|
— |
|
|
|
(357 |
) |
Adjusted SG&A (non-GAAP) |
$ |
85,740 |
|
|
$ |
83,604 |
|
|
|
|
|
Total revenues |
$ |
527,775 |
|
|
$ |
874,379 |
|
Adjusted SG&A (non-GAAP)
as a percentage of revenue |
|
16 |
% |
|
|
10 |
% |
(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. AND
SUBSIDIARIESAppendix AExplanation of Non-GAAP Financial
Measures
Non-GAAP Definitions
Adjusted EBITDA - A non-GAAP financial measure
defined by us as net loss before interest expense, depreciation and
amortization, gain on investment, stock-based compensation expense,
premium deficiency reserve benefit, restructuring costs,
non-recurring legal expenses and settlements, expenses attributable
to Seek, and expenses attributable to Character Biosciences, Inc.
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
expense, less activity attributable to restructuring costs, less
non-recurring legal expenses and settlements, less expenses
attributable to Seek Insurance Services, Inc., less expenses
attributable to Character Biosciences, Inc. 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.
Beginning with the third quarter of 2022, we updated the name of
our Adjusted operating expenses (non-GAAP) metric to Adjusted
SG&A (non-GAAP).
Clover Health Investments (NASDAQ:CLOV)
Gráfico Histórico do Ativo
De Fev 2024 até Mar 2024
Clover Health Investments (NASDAQ:CLOV)
Gráfico Histórico do Ativo
De Mar 2023 até Mar 2024