Alignment Healthcare, Inc.

Good day, and thank you for standing by. Welcome to Alignment Healthcare Third Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephones. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to John Cahill, founder and CEO.

Please go ahead.

Hello, and thank you for joining us on our third quarter earnings conference call. We are pleased to deliver strong results through the third quarter as we exceeded our outlook expectations across each of our four key performance indicators. For the third quarter of 2023, our total revenue of 456.7 million represented approximately 27% growth year over year. We ended the quarter with health plan membership of 115,600 members, growing approximately 18% year over year. Adjusted gross profit was 60.6 million producing a consolidated MBR of 86.7%, while our MBR excluding ACO REACH was 85.7%. Lastly, our adjusted EBITDA was negative 8.4 million, ahead of our outlook range. Our third quarter success continues to demonstrate that we are executing against our founding vision of delivering high quality and low cost outcomes through our member-first operating model. This includes strong performance across three key value drivers, growth, utilization, and stars. In terms of growth, our strong intra-year membership growth momentum is a tangible sign that our sales and retention improvements are yielding results. Following our third quarter outperformance, we are raising the midpoint of our membership guidance to reflect 20% membership growth for year end 2023, while also increasing our revenue guidance to reflect 24.8% growth year over year. Further, as I'll share more during our call today, we're feeling confident about our AEP positioning and membership growth outlook for 2024. Regarding utilization, our MBR results in the quarter reflect continued progress in our clinical operations, improvements to our medical management model, and steady utilization performance. Our provider engagement and care anywhere teams enabled by AVA delivered 152 admissions per thousand in the third quarter, despite absorbing higher than anticipated new membership growth. Lastly, turning to stars, we are pleased to announce that 92% of our health plan members are in plans rated four stars or above for 2024. This significant achievement is a testament to the quality of our member experience delivered through the seamless relationship between our internal team and our external providers. Each of these achievements demonstrate the power of having a purpose-built MA platform, which unites the best-in-class technology with integrated member experience and provider engagement. Expanding further upon our STARS results, our four-star California HMO contract rating marks the seventh consecutive year in which our largest contract has achieved at least four out of five stars. Our strong result is particularly notable this year as the percentage of members and plans rated four star or better fell from approximately 80% to 55% across our California markets. In 2025, many competing plans will now face declining stars payments and the phased-in effects of the new V28 risk model. Amidst this environment, we will continue to capitalize on our relative funding advantage and our high-quality, low-cost operating model. Outside of California, our North Carolina and Nevada markets will have four-and-a-half-star rated contracts. As we continue to grow in our new states, we are driving continued improvements in star ratings by doubling down on our support with doctors across these regions to create a seamless experience for our providers. Turning to AEP, we are pleased with our results for the first two weeks of AEP, and we expect to grow January 1st membership at or above 20% year over year. For the 2024 plan year, we once again enhanced our portfolio of curated products supported by the strength of our stars and cost management capabilities. While many of our local competitors have declining or flat benefits, alignments, low-cost position and commitment to quality and product innovation enabled us to fund increased benefit richness across all of our flagship plans for 2024. Specifically, we are excited to share that 95% of our non-SNP members have the same or lower maximum out-of-pocket costs and monthly premiums. with expanded dental allowances across many of our plans. We also curated our selection of products to address the distinct needs of seniors everywhere, whether it's a health-conscious member who values direct savings or someone in need of more dedicated care regime. Further, the recent collaborations with leading household brands like Instacart and Walgreens exemplify our drive to integrate innovative solutions into the healthcare landscape. This is just a sample of how our pioneering and disciplined approach to product design leads us to be optimistic about 2024 membership growth. We look forward to providing you with a more fulsome update on our AEP results in early January. In conclusion, our year-to-date progress reinforces our confidence in achieving our 2023 guidance, our 20% growth target in 2024, and an adjusted EBITDA break-even result next year. Now, I'll hand the call over to Thomas to cover the third quarter financials, as well as our outlook for the remainder of the year. Thomas?