Clover Health Investments, Corp.

Ladies and gentlemen, good afternoon and welcome to the Clover Health fourth quarter and full year 2024 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow with prepared remarks. At that time, if you wish to ask a question, please press star 1 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 fourth quarter and full year 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 and 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 referenced, including a reconciliation of those measures to GAAP measures, can be found in the earnings materials available on our website. With that, I'll turn the call over to Andrew.

Thank you, Ryan, and a warm welcome to everyone joining us today. 2024 was a pivotal year for Clover. We set out with a clear mission to drive sustainable growth, achieve adjusted EBITDA profitability, and reinforce our differentiation in Medicare Advantage. And I feel we have executed very well in delivering on these goals. Firstly, during 2024, we delivered meaningful full-year adjusted EBITDA profitability. We previously shared that achieving this would position us to return to growth during a period where our competitors would be retreating. This profitability and return to growth has happened as anticipated, and we believe our profitable core of returning membership cohorts sets us up well to invest in bringing on significant new membership every year. Secondly, we surpassed 100,000 Medicare Advantage members this year during AEP, reflecting well above market year-over-year 27% growth and a 95% AEP retention rate, proving that when members experience the CLOVER model, they stay. And more importantly, we achieved this growth while improving clinical outcomes and cohort performance. all of which are a testament to our discipline in managing the total cost of care and driving to better outcomes. Thirdly, we've again strengthened our star ratings. We now have over 95% of our members in four-star rated PPO plans for the 2025 star rating year, with nation-leading clinical measures highlighting our commitment to delivering higher quality care. As a reminder, the financial effect of this four-star rating will be enjoyed next year in 2026. Practically speaking, this means higher benchmarks for our plans, which will flow through to top-line PMPM revenue, even more competitive benefits, and long-term stability for our members. Fourthly, we successfully launched Counterpart Health, our software business that houses Clover Assistant for third-party partnerships, where we branded as Counterpart Assistant. We signed and implemented our first external partners, built a scalable multi-tenancy cloud platform, and established a pipeline of additional potential customers spanning both providers and payers. The market is validating what we've known all along. technology-driven care management isn't just the future of MA, it's the key to making it sustainable. These achievements reflect the exceptional dedication and hard work of every Clover team member, as we collectively strive to enhance healthcare for seniors via the earlier identification, management, and treatment of chronic diseases. While we are very proud of our results, we're even more enthusiastic about what's to come on our journey to care for more and more of the Medicare population. As we step into 2025, having established meaningful full-year adjusted EBITDA profitability in 2024, we're not just carrying momentum, we're operating from a position of strength. The core drivers of our business are aligned and accelerating, and we're well positioned to execute upon our strategic goals during our next phase of growth. We will continue to actively manage care while lowering costs via our differentiated technology-first care model. Our wide network, PCP-led, technology-driven approach remains our core advantage. Unlike traditional MA models that rely on health system-based risk sharing, we enable PCPs to succeed in value-based care while remaining on a fee-for-service chassis. This ensures broad access for seniors, stronger physician engagement, and better cost performance over time. Clover Assistant technology will, of course, be the core of our strategy. Our proprietary software platform delivers real-world clinical and financial impact. Advances in data interoperability and AI only serve to accelerate our platform. Because our results are built upon delivering AI-driven insights to physicians, the tremendous rate of improvement in these technologies create tailwinds to Clover in a way that traditional health plans do not experience. During 2024, more than two-thirds of our members received proactive, data-driven, and personalized care through Clover Assistant, which continued to deliver over 1,000 basis points of MCR improvement for returning MA members whose PCPs use CA as compared to those who do not. In 2025, we'll continue to invest in enhancements to evolve CA with AI-powered automation and further enhanced EHR integrations, making it even more impactful for physicians at the point of care. While CA helps enhance the performance of our wide network PCPs, Home care remains a critical and distinctive component of our differentiated care model and complements those wide network PCPs with CA-powered care directly in the home. Designed to engage with our highest risk members, our home care program does everything from gap closure to post-acute care to integrated care for polychronic patients at the end of life. When we do this, our data also shows that our highest acuity cohort of members receiving home care experienced significantly improved MCRs over time. This demonstrates that intensive, proactive care delivered in the home is a highly effective strategy for keeping members healthier and out of the hospital, and blunting the medical cost trend for our most acute and comorbid members. This is precisely why during 2025, we intend to further scale our home services to ensure that care for our members is delivered at the right time, in the right setting, and with measurable impact. And lastly, counterpart health is no longer a concept. It's an emerging business with significant upside potential. We have a growing pipeline of partners, including payers and health systems, evaluating CA. They see CA as a strong tool to help them improve value-based performance for their wide network, but we also see health systems evaluating it for their own employed physicians. We have invested for years in building a software product that drives clinical quality, and we feel that our core technology DNA, plus years spent iterating and improving within our own Medicare Advantage plan, have created a unique and differentiated offering. We believe the opportunity here is great, and in 2025, we'll focus on closing additional deals in varied markets that validate the broader scalability of our model. Overall, in 2025, we're committed to maintaining adjusted EBITDA profitability as we also invest deeply in further increasing total life under management and meaningfully growing top line revenue. We will also be investing in growing our Clover Assistant reach within our markets and in new markets as this lays the groundwork for managing that larger membership. We believe that this balance of strong profitability from returning member cohorts together with our strategic investments in new member growth, Clover Assistant technology, growing Clover Assistant's reach, and expanding both our home care services as well as the counterpart health go-to-market strategy positions us well for acceleration of profitability in 2026 and beyond. I'll now hand it over to Peter for the financial update.