Clover Health Investments, Corp.

Please stand by, your program is about to begin. If you need assistance on today's conference, please press star zero. Ladies and gentlemen, good afternoon and welcome to the Clover Health Third Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the prepared remarks. At that time, if you wish to ask a question, please press star one on your telephone keypad. As a reminder, today's call is being recorded. I would now like to turn the call over to Ryan Schmidt, Investor Relations for Clover Health. Please go ahead.

Good afternoon, everyone. Joining me on our call today to discuss the company's third quarter 2024 results are Andrew Toy, Clover Health's Chief Executive Officer, and Peter Kuypers, the company's Chief Financial Officer. You can find today's press release in the accompanying supplemental slides, as well as the company's most recent investor deck in the investor events and presentation section of our website at investors.cloverhealth.com. This webcast is being recorded, and a replay will be available in the investor relations section of the Clover Health website. I'd also like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties, including expectations about future performance. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including in the risk factors section of our most recent annual report on Form 10-K and other SEC filings. Information about non-GAAP financial measures reference, including a reconciliation of those measures to GAAP measures, can be found in the earnings materials available on our website. With that, I'll now turn the call over to Andrew.

Thanks, Ryan, and thank you, everyone, for joining us today. We have had a tremendous amount of progress at Clover that we're excited to talk through. Firstly, we delivered another quarter of meaningful adjusted EBITDA profitability and positive operating cash flow. As such, we are improving our full year adjusted EBITDA guidance. We have always emphasized our focus on delivering a profitable Clover, and I feel that we have executed very well here. Secondly, We achieved another quarter of industry-leading loss ratios, driven by continued strong performance on both PMPM revenue as well as medical expense management. We're particularly proud of this because we see this value being driven largely by the technology-powered performance of the independent fee-for-service physicians in our wide network. This is the part of the network where a lot of other Medicare Advantage plans are struggling to manage total cost of care. Thirdly, we are proud to have received upgraded star ratings for our plans, most notably a four-star rating for our flagship PPO for plan year 2025, impacting payment year 2026. In fact, for plans with over 2,000 members, our PPO received the highest score in the entire country on core HEDIS measures, with a score of 4.94, even edging out high-performing HMOs. Over 95% of our members are in this four-star plan. The key differentiator with Clover is that these results are driven by physicians using our technology, Clover Assistant. Unlike almost every other high-performing MA plan, Clover's plans have almost no traditional value-based contracts or delegated risk. We do not pay traditional quality incentives around gap closure. Instead, what we focus on is having physicians use Clover Assistant, which acts as a GPS for physicians to better manage Medicare Advantage total cost of care and quality. between our network physicians and our internal clover home care practice which focuses on managing our most vulnerable members we've historically delivered clover assistant powered care to over two-thirds of our membership we've demonstrated that our technology first model of care while unconventional generates differentiated value we've driven strong clinical and financial performance in our insurance business highlighted by meaningful adjusted EBITDA profitability and strong insurance loss ratios. I'm very proud that we've significantly increased our adjusted EBITDA profitability to over $62 million year-to-date on a membership base of 81,000 lives. These strong financial results position us well to invest in membership growth going into 2025. This AEP, we believe we are offering a highly appealing and competitive product for Medicare-eligibles, and we are prioritizing both acquiring new members and maintaining strong retention rates. With this strategy, we believe there is ample opportunity to expand our market share throughout 2025 in our core markets. We're particularly excited about the timing of our growth opportunity. Other plans have struggled to maintain star ratings and manage cost of care and are effectively being forced to make strategic retreats by making plan closures, dropping providers from their networks, and pulling back on benefits. By maintaining our own benefit and network strength and leveraging our improved star ratings, we are set up to be in a very good position. While it's too early to discuss our 2025 posture in detail, our intent is to take advantage of the opportunity in front of us by focusing on growth while maintaining consolidated profitability by a strong management of our returning member cohorts. We're demonstrating a clear ability to grow into the strength of our model with our profitable existing member cohorts fueling growth and having a clear focus on bringing new members onto our care platform. We'll obviously have more to talk about regarding our annual enrollment period performance in the future, but overall, we feel very good about how we positioned our business for growth in 2025 on the back of our strong performance in 2024. To be clear, though, we believe this growth opportunity will not be a one-year window. As I mentioned, we are very proud to have recently received a four-star rating for our flagship PPO plans. By achieving this rating, we'll have tailwinds going into payment year 2026 that will allow us to continue to invest in our flywheel as we expand profitability while continuing to accelerate growth. And again, our star's improvement came at the same time as the broader industry saw star rating degradation setting us up to continue to differentiate our products for our members. In summary, I'm very proud of our team's accomplishments and progress during the quarter, where we again achieved meaningful adjusted EBITDA, improved our full year 2024 adjusted EBITDA profitability guidance, and have positioned the company well for growth amidst a dynamic market backdrop. I'll now hand it over to Peter for the financial update.