Clover Health Investments, Corp.

Hello and welcome to Clover Health's first quarter 2026 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 first quarter 2026 results are Andrew Toy, Clover Health's chief executive officer, and Clay Thornton, the company's interim 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 thank you, everyone, for joining us today. Entering 2026, our first quarter results demonstrate how market-leading growth, GAAP net income profitability, and full risk can scale together in Medicare Advantage. This quarter, we grew membership 51% year over year, while generating gap net income of $27 million. We believe that this demonstrates our ability to empower physicians with technology to deliver earlier and better care, finance best-in-class benefits, drive strong retention, and strengthen our cohort economics over time. The clearest example of that is in our core New Jersey markets, where our model is most integrated and where that integration is translating into market leadership. Coming into 2026, outside of special needs and employer retiree plans, Clover is now the largest PPO in New Jersey. we believe this concentration creates a virtuous cycle where growth drives deeper clinical integration and continued investment in core markets, reinforcing provider alignment and strengthening the underlying economics of the business over time. Also, as we attract and retain more members under our technology-driven care model, we expect that to translate into continued earnings expansion. Our business model is also structurally different from most Medicare Advantage plans. This is why we believe our model compounds better over time. We operate on a wide network PPO structure where we retain full economics and generally do not delegate risk downstream. As new members join, we view their cost of acquisition and first year medical costs as deliberate upfront investments as they are not yet fully under our care model. these new members create a near-term headwind, but also establish a strong profitability tailwind as those cohorts mature under our platform. In that first year, we are assessing their health, enrolling the sickest into home care, and of course, getting as many members as possible Clover-assisted visits. This provides us with what we consider to be best-in-class cohort improvement. Put another way, we believe the total lifetime value of a clover member significantly exceeds that of other plants. We deliberately designed the model this way. Better clinical engagement driven by technology at the point of care is what we believe improves both member outcomes and plan economics. That same model is foundational across our MA business and counterpart health. Other plans note our leading wide network PPO, our total cost of care, and our nation-leading HEDIS performance and ask us if we might be able to help them do the same. Counterpart is what lets us say yes to that. Importantly, 2026 is also our second consecutive year of strong MA plan growth, and we believe we are significantly better positioned than we were a year ago. We benefit from a higher star rating, and we kept benefit design stable year over year. Notably, beginning in OEP, we also decided to moderate in-year growth to prioritize clinical integration. We grew significantly in AAP, and moderating the rest of the year makes sense to us as we can focus on the experience and care of our new members. Our model is also differentiated by the data foundation we have built over time. We recently announced an expansion of our capabilities here, becoming one of the first payers active on the new CMS-aligned networks. This allows us to access more data earlier in the member lifecycle and power more effective AI-driven insights. AI runs on data, and we believe we are one of the only plans who view interoperability not as an IT-driven compliance project, but as a core capability. We believe this is a key structural advantage and will be reflected in the performance of our care model as we scale. Let's turn to care we delivered within the quarter. Clover Assistant and Clover Care Services are driving both wide network clinical engagement and supporting higher acuity members in the home. During the first quarter, over one-third of our members received Clover Assistant-powered care, in line with expectations and tracking toward our full-year targets. We have also meaningfully increased engagement for higher acuity members, with our home care division enrolling a record number of patients for this point in the year. This matters as we continue to see meaningful differences in outcomes and cost performance for members who are actively engaged in these programs. While still early in the year, our start to 2026 builds on the foundation we established in 2025 and reflects the consistent year-over-year execution of our strategy. Clay will cover this in more detail, but we believe initial trends are developing in line with expectations. Looking ahead to 2027, it's too early to discuss our bids in detail, but we feel good about how we are positioned. We've built our model to thrive across both 3.5 and 4-star ratings, and we believe the CMS rate notice came in at a reasonable place. First, CMS did not finalize the proposed risk model changes, resulting in a more stable outcome on the risk adjustment side than many expected. While this stability is supportive to the broader industry, it's important to note that our model is built to perform through clinical engagement and care management. We do not rely on rate inflation in the same way others do. We have also consistently supported efforts to strengthen risk adjustment. By aligning payments more closely with actual care delivery, we believe our model is well positioned for an environment that moves in that direction. Second, on the changes surrounding unlinked chart reviews, we expect a minimal impact from this change year over year. Further, we support the underlying broader shift toward aligning payment with care delivered at the point of service. Our model has long been grounded in encounter-based claims-linked documentation, with Clover Assistant enabling earlier and more accurate diagnosis within physician workflows. In our comments to CMS, we highlighted a specific issue around members who switch plans, since the new plan may not always have access to the prior encounter data needed to link historical chart reviews. We were pleased to see CMS address that issue through the switcher exception, which we believe supports fair competition and more accurate risk adjustment for growing plans like ours. Lastly, beyond the final 2027 rate notice, we think the direction of the STARS program is gradually becoming more aligned with how quality should be measured. That said, there is still significant work to be done. We continue to believe the program should place more weight on the measures most directly tied to clinical outcomes, measurable improvements in member health, and evidence-backed clinical actions. We built Clover around physician enablement, interoperable care coordination, and supporting physicians in providing earlier diagnosis and management of chronic disease. We think our historical, market-leading HEDIS performance reflects that. While we still think further reform is needed, we are encouraged by CMS's recent steps to move STARS in a more outcomes-oriented direction, and we believe plans such as Clover, built on delivering better health outcomes, will be very well positioned over time. Taken all together, we feel good about our strong start to the year and long-term positioning. Our cohorts are developing as expected, our care model is scaling, and our leading operational indicators are performing as anticipated. We expect to deliver full-year gap net income profitability in 2026 and to continue improving both care and economics over time. Finally, I'm delighted to introduce Clay Thornton, Clover's Interim Chief Financial Officer. I worked closely with Clay at Clover for several years in his role as CFO of our Medicare Advantage plan. He's been deeply involved in building and scaling the financial foundation of the business, and we're excited for him to step into this expanded role. With that, I'll turn it over to Clay for the financial update.