Clover Health delivered a first quarter that garnered a positive market response, with results shaped by significant Medicare Advantage membership gains and operational improvements. Management emphasized that a 30% increase in membership and strong retention in core markets, particularly New Jersey, propelled revenue growth and drove notable improvements in adjusted EBITDA and operating margins. CEO Andrew Toy credited the company’s technology-driven care model, highlighting the expanded use of Clover Assistant to deliver earlier, more efficient care and support for both new and returning members. Management also pointed to robust onboarding of new cohorts and effective cost management as key contributors to the quarter.
Is now the time to buy CLOV? Find out in our full research report (it’s free).
Clover Health (CLOV) Q1 CY2025 Highlights:
- Revenue: $462.3 million vs analyst estimates of $469.1 million (33.3% year-on-year growth, 1.4% miss)
- Adjusted EBITDA: $25.78 million vs analyst estimates of $9.27 million (5.6% margin, significant beat)
- Adjusted EPS guidance for the full year is $60 at the midpoint, beating analyst estimates by 30,100%
- EBITDA guidance for the full year is $60 million at the midpoint, above analyst estimates of $45.66 million
- Operating Margin: -0.3%, up from -6.5% in the same quarter last year
- Customers: 103,418, up from 82,664 in the previous quarter
- Market Capitalization: $1.42 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Clover Health’s Q1 Earnings Call
- Jonathan Yong (UBS) asked how medical cost trends differed between new and existing cohorts, and if member drug spending was as projected. CFO Peter Kuipers replied that trends were consistent with expectations for both groups, with no significant deviations.
- Jonathan Yong (UBS) sought details on the Counterpart Health go-to-market strategy and its contribution timeline. CEO Andrew Toy indicated the company would provide more updates as the year progresses but is focused on improving insurance profitability for now.
- Matt Hewitt (Craig-Hallum Capital) questioned the initial Counterpart Health implementation experience and partner feedback. Toy shared that early data showed engagement and outcomes similar to internal benchmarks, with a focus on physician engagement and earlier disease detection.
- Matt Hewitt (Craig-Hallum Capital) asked about changes in the competitive landscape and peer responses to Clover’s model. Toy noted that competitors are pulling back on PPO offerings and marketing, while Clover remains committed to its wide network and technology-driven approach.
- Richard Close (Canaccord Genuity) inquired about the drivers behind anticipated accelerated growth, including beyond rate and Star ratings. Kuipers explained that improving cohort economics, SG&A leverage, and technology enhancements are expected to drive future performance.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace of new member onboarding and maturation in core and expansion markets, (2) the adoption and performance of Clover Assistant and Counterpart Health partnerships, and (3) the impact of regulatory changes and the transition to a 4 Star Medicare Advantage plan. Additionally, progress in operating leverage and care quality metrics will be key indicators of sustained profitability.
Clover Health currently trades at $2.77, down from $3.34 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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