Alignment Healthcare (ALHC) Q2 2024 earnings summary

Executive summary

• Health plan membership reached 175,100 as of June 30, 2024, up 56.1% year-over-year, surpassing guidance and driven by expansion across 53 markets in 6 states.

• Total revenue for Q2 2024 was $681.3 million, a 47.3% increase year-over-year, reflecting strong membership growth.

• Adjusted EBITDA turned positive at $6.0 million, with net loss improving to $24.0 million from $28.5 million year-over-year.

• Medical benefits ratio (MBR) was 88.7% for Q2 2024, with margin improvements and operational scale achieved.

• Investments in technology, clinical infrastructure, and data platforms continue to drive growth and improved outcomes.

Financial highlights

• Q2 2024 revenues were $681.3 million, up 47.3% year-over-year; adjusted gross profit was $77 million.

• Adjusted EBITDA was $6.0 million, compared to $(2.1) million in Q2 2023; net loss was $(24.0) million.

• SG&A was $88 million; adjusted SG&A was $71 million, up 27% year-over-year, but as a percentage of revenue (excluding ACO REACH) declined from 12.9% to 10.4%.

• Cash, cash equivalents, and short-term investments totaled $364 million at quarter end.

• Medical expenses increased 47.4% year-over-year to $605.3 million in Q2 2024.

Outlook and guidance

• Q3 2024: Membership expected at 176,000–178,000; revenue $655M–$665M; adjusted gross profit $75M–$81M; adjusted EBITDA $0–$12M.

• Full year 2024: Membership 178,000–180,000; revenue $2.61B–$2.64B; adjusted gross profit $280M–$310M; adjusted EBITDA -$12M to $12M.

• Year-end membership guidance raised by 8,000 due to outperformance; midpoint of membership growth now 50% vs. initial 37%.

• 2025: Targeting at least 20% growth in both membership and revenue, with margin expansion and adjusted EBITDA profitability.

• Liquidity is expected to be sufficient to fund operations and capital needs for at least the next 12 months.