Overview
After announcing disappointing Star ratings for their largest contract in early October, Clover Health missed adjusted EBITDA expectations yesterday and revised their guidance on adjusted EBITDA down and Insurance Benefits Expense Ratio up for the year.
Higher-than-expected medical costs aren’t exactly a new story in 2025, but the response from most payers has been one of retrenchment, re-grounding in managed care fundamentals like narrower networks and HMO products, and revising their ambitions from growth to profitability.
Clover Health is doing the opposite: “doubling down” on their tech-driven PPO model and aiming for profitable growth in 2026 as they attract members from “retreating plans”. However, the drivers of yesterday’s miss were growing pains after inheriting challenging membership from plans that exited the market last year, which raises the question: what will make 2026 better for Clover Health than 2025?
Quarter highlights
Membership was 109,226, up 35% YoY
Revenue was $497m, up 50% YoY
Medical loss ratio (what Clover calls BER) was 93.5%, up 10.7% YoY
SG&A was $97.1m and adjusted SG&A ratio was 14.3%, 4.4% improvement YoY
Adjusted EBITDA was $2.1m and adjusted net income was $1.7m
Links:
Key Metrics
Earnings Call Discussion:
Here are a few key takeaways from the earnings discussion:
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