Clover Health Investments, Corp.

Hello and welcome to Clover Health's fourth quarter 2025 earnings call. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Ryan, you may begin.

good afternoon everyone joining me on our call today to discuss the company's fourth quarter and full year 2025 results are andrew toy cloverhealth's chief executive officer and peter kypers 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 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 now turn the call over to Andrew.

Thank you, Ryan, and welcome everyone to Clover's fourth quarter earnings call. The headline takeaway is this. In 2025, we achieved full-year adjusted EBITDA profitability, delivered a well-controlled medical cost trend, and re-established market-leading membership growth. all in a year marked by elevated utilization across the industry. What makes this especially notable is that we achieve these results while absorbing the natural first-year dilution that comes with membership growth in Medicare Advantage. Because we retain full underwriting risk rather than delegating it downstream, that near-term pressure sits entirely with us. Sustaining profitability while growing 38% within that structure is not easy. However, as those members mature into returning cohorts, we capture the full economic upside, and we're excited about the accelerating earnings power that dynamic unlocks. This reinforces the durability of our model and the strength of our cohort economics, which we believe are among the strongest in the industry. What also gives us confidence moving forward is the contrast between Clover's trajectory and the broader Medicare Advantage market. Headlines that might read as negative for the Medicare Advantage industry are clear tailwinds for Clover from a competitive lens, and the past three years are our evidence of this. When regulatory actions have tightened risk adjustment and reimbursement rates, incumbents have reacted by reducing benefits, exiting markets, and eroding margins. This only serves to strengthen Clover's competitive positioning, making us an even more attractive option for consumers. For years, we have been explicit that Medicare Advantage should reward real clinical value and disciplined cost management, not coding intensity or favorable rate assumptions. As far back as 2021, we publicly supported heightened rigor around risk adjustment and emphasized that our model focuses on clinical value with no incentive for increased coding. In 2022 and 2023, we reiterated that sustained growth would come from empowering physicians through technology and bending the cost curve over time, not by benefiting from medical cost inflation or temporary rate tailwinds. When the broader market faces pressure, it reinforces the durability of our model and the structural choices we made in building Clover. With this foundation, combined with clear structural tailwinds this year, we expect to achieve our first full year of GAAP net income and EPS profitability in 2026. This metric will be the cornerstone for our 2026 guidance that Peter will discuss in more detail later in the call. I will now walk through our results in three parts. First, how we executed our 2025 strategy. Second, why we believe that we are well positioned for 2026. And third, as we look ahead, why we feel good about the durability of our model in 2027 and beyond. Starting with 2025, we set out to achieve adjusted EBITDA profitability while absorbing meaningful new member dilution to continue to deliver industry-leading quality and to prove that our growth strategy works. We delivered on each of those priorities, even against a difficult industry backdrop, higher than expected intra-year new member growth, and during a three-and-a-half-star payment year. Secondly, we also demonstrated that our growth strategy could be repeatable. During the 2026 annual enrollment period, we delivered 53% year-over-year membership growth driven by a stable benefit offering, strong retention, a focus on our core markets where Clover Assistant coverage is strong, and minimal reliance on eBrokers. This reinforces that our growth strategy makes sense and is also durable. Lastly, our 2025 benefits continue to be the clear and compelling choice in our core New Jersey markets. And at the same time, our underlying medical cost trend remains strong. Growing membership while maintaining cost discipline is what enables us to balance profitability through the inherent earnings power of our model. Turning to 2026, we entered this year with exceptional member retention, more operating experience, and a focus on deep Clover Assistant engagement. With greater than 95% AEP retention and approximately two-thirds of our members receiving Clover Assistant-powered care in 2025, we are carrying forward a stable 2026 benefit offering that builds directly on last year's performance. That combination of retention, engagement, and underwriting discipline drives our confidence in delivering our first full year of GAAP net income profitability in 2026 while continuing to grow at a market-leading pace. Further reinforcing this is our underlying cohort economics, which we expect to be structurally stronger in 2026 versus 2025. As I discussed earlier, new members are inherently diluted across the industry, and because we do not delegate risk to providers, we absorb that near-term pressure more directly. However, as these members mature into returning cohorts, we retain the full economic upside, and our data consistently shows profitability improves with tenure. That dynamic, combined with our four-star payment year, favorable market rate dynamics, and earlier care management via Clover Assistant, highlights the structural earnings power of our model and gives us real conviction in the year ahead. Now, looking ahead to 2027, our view is that the broader MA policy direction and the underlying strength of our business remain aligned. Overall, we support the intent and goals of the proposed changes around unlinked chart review records, as they aim to further align payment with documented clinical care delivered in real patient encounters. Our model has always been grounded in encounter-based, claims-linked documentation, with Clover Assistant enabling earlier, more accurate diagnosis and better clinical decision-making directly at the point of care. That said, we believe that there is one unintended consequence of the proposal related to switchers. For example, when members switch plans, the new plan currently lacks the data needed to link records to prior encounters. Our view is that CMS can close this gap by simply sharing that data. Nonetheless, we support CMS's broader goals of strengthening payment accuracy and fostering fair competition. Because our clinical insights are generated and acted on within real physician workflows, this policy direction is consistent with how we operate and reinforces the long-term integrity of the Medicare Advantage program. Similarly, our model was built to perform without relying on annual rate increases, unlike many other plans, which gives us a differentiated perspective on the 2027 Medicare Advantage Advance Rate Notice. From the beginning, we designed Clover to make the math work through disciplined cost management and clinical integration, not through elevated rate assumptions or policy optimization. It is through this lens that we view the recent announcement, which we believe highlights structural differences across the industry. Plans built around favorable rate environments feel pressure, and plans built to better manage total cost of care through real clinical engagement are positioned differently. At its core, Medicare Advantage exists to improve care delivery and clinical outcomes while keeping medical cost growth under control for the country. That principle is foundational to how we operate. When payment policy moves closer to documented clinical reality, it reinforces how we've built Clover to improve care while bending the cost curve through Clover Assistant and deeper clinical integration. As a result, we believe our model is structurally less sensitive to policy cycles and better positioned in periods of industry adjustment. Beyond policy, our long-term confidence rests on two things, sustained core New Jersey market leadership and a technology-driven model that can grow comfortably even in a three and a half star environment. We are now the largest individual non-special needs plan, PPO plan in New Jersey, and that is not accidental. It reflects our intention not only to establish leadership in our core New Jersey markets, but to sustain it and extend it into 2027 and beyond. And our scale in New Jersey matters as it makes us a more attractive partner across the network while creating natural efficiencies that strengthen the economics of our model as we scale. Additionally, we've demonstrated our ability to grow and maintain profitability while offering attractive market-leading benefits priced against a three-and-a-half-star benchmark. This validates the resilience and differentiation of our model compared to competitors and reinforces that while a four-star payment year represents meaningful upside, it is not a hard dependency for profitability. This relative independence to both rates and stars is differentiating in an industry where many plans often depend on both to simply maintain baseline membership. Importantly, the same technology platform and operating strengths that underpin our core Medicare Advantage business also forms the foundation for counterpart health. Our near-term goal is to achieve the milestone of managing as many members under a counterpart assistant as we manage under Clover assistant in our growing MA plan. As payers and risk-bearing providers face ongoing pressure around medical costs, quality performance, and fragmented health data, we believe there is a clear need for clinically grounded, AI-powered solutions that operate in real-world workflows. Our priority right now is to expand Total Lives on the Counterpart platform and deepen clinician adoption, positioning Counterpart as a long-term growth engine alongside our growing and profitable Medicare Advantage business. In summary, 2025 was a year of execution that demonstrated the earnings power of our model, even amid significant new member growth and dilution. 2026 is about building on that foundation as we anticipate our first full year of gap net income profitability. And beyond that, we see a scalable platform that continues to improve care, strengthen economics over time, and deliver long-term value for seniors. With that, I will turn it over to Peter to walk through the financials in more detail.