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Sep 30, 2022
Clover Health Q3 2022 Earnings Report
Reported strong third quarter results with significantly improved Insurance Medical Care Ratio.
Key Takeaways
Clover Health reported strong third quarter results, driven by improved Insurance Medical Care Ratio (MCR). The company is prioritizing profitability and expects to improve both Insurance and Non-Insurance MCRs from 2022 levels. They finished the quarter with $783 million in cash, cash equivalents, and investments.
Insurance MCR decreased significantly year-over-year to 86.3%.
Total revenue increased to $856.8 million from $427.2 million year-over-year.
The company is updating its 2022 full year guidance to include improved 2022 Insurance MCR range of 93% to 94%.
Clover intends to continue to grow Insurance business at above-market rates in 2023 but will moderate growth to prioritize profitability.
Forward Guidance
For full-year 2022, Clover Health is updating its guidance. Total revenues are expected to be in the range of $3.2 billion to $3.4 billion. Insurance MCR is expected to be in the range of 93% - 94%. Adjusted SG&A (non-GAAP) is expected to be between $320 million and $330 million.
Positive Outlook
- Insurance membership is expected to average 86,000 - 87,000, a growth rate of 29% - 30% as compared to the 2021 average.
- Non-Insurance business is expected to be 165,000 - 170,000 aligned beneficiaries, compared to an average of 62,125 in 2021.
- Total revenues are expected to be in the range of $3.2 billion to $3.4 billion.
- Insurance revenue of $1.0 billion to $1.1 billion is projected.
- Adjusted SG&A as a percentage of revenue (non-GAAP) is expected to be 9% - 10% compared to 18% in 2021.
Challenges Ahead
- Significant developments related to COVID-19 could potentially impact expectations.
- Historical utilization trends could potentially impact expectations.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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