Oscar Health (OSCR) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $2.42 billion, up 68% year-over-year, with membership at 1.65 million, also up 68%, driven by individual market growth and rate increases.

• Net loss for Q3 2024 was $54.6 million, or $(0.22) per share, improving from $65.7 million in Q3 2023; net income for the nine months ended September 30, 2024 was $179 million, a $300 million improvement year-over-year.

• Adjusted EBITDA loss for Q3 2024 was $11.6 million, an $8.7 million improvement year-over-year; year-to-date Adjusted EBITDA was $312 million.

• Management expects to achieve full-year adjusted EBITDA and net income profitability for 2024, with raised revenue guidance and margin expansion.

• Oscar Health will exit the small group market and end the Cigna + Oscar partnership after December 2024, with transition services through 2026.

Financial highlights

• Premium revenue for Q3 2024 rose 70% year-over-year to $2.37 billion; total revenue for the nine months was $6.79 billion.

• Medical Loss Ratio (MLR) for Q3 2024 was 84.6%, up 80 basis points year-over-year; SG&A expense ratio improved to 19.0%, down 360 basis points.

• Net loss for Q3 2024 was $54.6 million, compared to $65.4 million in Q3 2023; nine months net income was $179 million versus a $120.7 million loss in the prior year.

• Investment income increased 19% year-over-year to $50.3 million for Q3 2024.

• Ended Q3 2024 with $1.21 billion in cash and cash equivalents and $2.44 billion in investments.

Outlook and guidance

• Full-year 2024 revenue guidance raised by $200 million to $9.2–$9.3 billion, reflecting higher membership and favorable lapse rates.

• SG&A expense ratio expected in the range of 19.4%–19.6%, lower than previous guidance.

• MLR projected toward the high end of 80.5%–81.5% due to SEP risk adjustment dynamics.

• Adjusted EBITDA forecasted toward the high end of $160–$210 million, with net income profitability expected for the full year.

• Projecting at least 20% revenue CAGR and 5% operating margin by 2027.