Oscar Health, Inc.

Good evening. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to Oscar Health's fourth quarter and full year 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I will now turn the conference over to Chris Potichar, Vice President of Treasury and Investor Relations.

Good evening, everyone. Thank you for joining us for our fourth quarter and full year 2024 earnings call. Mark Berlini, Oscar's Chief Executive Officer, and Scott Blackley, Oscar's Chief Financial Officer, will host this evening's call. This call can also be accessed through our Investor Relations website at ir.highoscar.com. Full details of our results and additional management commentary are available in our earnings release, which can be found on our investor relations website at ir.highoscar.com. Any remarks that Oscar makes about the future constitute forward-looking statements within the meaning of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by those forward-looking statements as a result of various important factors, including those discussed in our quarterly report on Form 10-Q for the period ended September 30, 2024, filed with the Securities and Exchange Commission, and other filings with the SEC, including our annual report on Form 10-K for the period ended December 31, 2024, to be filed with the SEC. Such forward-looking statements are based on current expectations as of today. OSCAR anticipates that subsequent events and developments may cause estimates to change. While the company may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. The call will also refer to certain non-GAAP measures. A reconciliation of these measures to the most directly comparable GAAP measures can be found in the fourth quarter and full year 2024 earnings press release available on the company's investor relations website at ir.highoscar.com. We have not provided a quantitative reconciliation of estimated full year 2025 adjusted EBITDA as described on this call to Gap Net Income because OSCAR is unable without making unreasonable efforts to calculate certain reconciling items with confidence. With that, I would like to turn the call over to our CEO, Mark Berlini.

Good evening. Thank you, Chris, and thank you all for joining us. This afternoon, OSCAR reported the strongest year of financial performance in our history. Our results were driven by record high membership, bottom line profitability, and continued product innovation. Oscar reached two significant milestones in 2024. First, we reported total company adjusted EBITDA profitability growing to $199 million, a $245 million year-over-year improvement. Second, we achieved net income profitability. Net income was $25 million, a $296 million increase over the prior year. Our improved bottom line was driven by strong performance in all parts of our business. We grew total revenue by 57% year over year to $9.2 billion. Our medical loss ratio was stable year over year, increasing 10 basis points to 81.7%. We also drove greater efficiency in our business as our SG&A ratio improved more than 500 basis points year over year to 19.1% through operating leverage and disciplined expense management. Our 2024 performance reflects the strength of our strategic plan and our ability to deliver long-term profitable growth. Overall, 2024 was an exceptional year for Oscar. Our results reflect our growing maturity as a company, and we are committed to delivering at least 20% revenue CAGR and a 5% operating margin by 2027. Scott will review our fourth quarter and full year results in a few moments. First, I will cover key business highlights. Oscar is one of the largest ACA carriers following the 2025 open enrollment period. The individual market grew 13% year over year to a record 24 million lives. Our growth outpaced the market by close to three times at 37%. We are now privileged to serve 1.8 million members as of February 1st, 2025. Our competitively priced products, technology, and superior member experience drove strong growth and retention across the OSCAR's 18-state footprint. Our disciplined pricing strategy gives us another year of above-market growth, which we expect will drive significant year-over-year increase in operating margin with continued administrative cost efficiencies and improved MLR performance. Our above-market growth demonstrates OSCAR's growing prominence across our service areas, We drove market share gains with strong positions in key Oscar states, including Florida, Tennessee, and Texas. We also performed well in new geographies, including North Carolina. The strength of our IFP brand network and expansive products portfolio also led to new ICRA growth across our footprint. We grew our ICRA membership with gains in Atlanta, Columbus, Kansas City, Miami, and New Jersey markets. Oscar's high value products continue to resonate in the market. We are attracting new members and creating a loyal membership base with plans built for individual needs. We had strong enrollment in our new Tech First HMO and multi-condition plan. Our condition-focused plans addressing diabetes, asthma, and COPD had high retention. Our Spanish First solutions attracted more Hispanic and Latino members, engaging them with culturally relevant providers, health resources, and care teams. Our leading NPS is proof that OSCQR is meeting rising consumer expectations. Consumers have more control over their healthcare with OSCAR. Our plans are meeting consumer demand for choice, transparency, and affordability, a value proposition that drove new employee initiations and open enrollment. We introduced new services with ICRA platforms, including convenient shop, buy, and enroll solutions and personal care guides to welcome employees to OSCAR. We will build on this momentum in 2025 and introduce more solutions for employers and employees. Oscar is positioned to take share from traditional group plans and engaged employers that do not offer insurance today. Oscar's powerful technology platform continues to unlock long-term value across all areas of the business. AI remains central to our strategy, and we are realizing its potential faster than others in the market. We are personalizing clinical care. Our team is integrating large language models into more of our capabilities. including tools that keep follow-up care on track after ER visits. Initial results show the tool lowered readmission rates by close to 10% for a major health system client. We continue to reduce provider administrative tasks. More than 50% of onboarding and post-care instructions today are AI-powered in Oscar Urgent Care. Our actions are reducing provider paperwork, improving speed to care. We are also deploying applications at greater speeds. significantly reducing implementation time. All of this is possible because of our industry-leading platform, which continues to fuel major strides in operational efficiency, member engagement, and affordability. In summary, 2024 was another remarkable year for the company. We generated record revenue, drove all-time high membership, and achieved both adjusted EBITDA and net income profitability for the first time in OSCR's history. These milestones are a solid foundation for strong profitable growth in 2025. We have a proven playbook to mature our existing markets and enter new ones with the technology to efficiently scale a profitable business. As I have said before, Oscar is committed to having the strongest leadership team in the individual market. Today we are welcoming healthcare veteran Janet Liang to our team to help drive our next phase of growth. Janet joins as president of Oscar Insurance and will be responsible for all insurance functions. She comes to Oscar from Kaiser Permanente, where she served as Group President and Chief Operating Officer of Care Delivery. Janet has strong operational expertise and a track record of growing markets. Oscar is stronger than ever. Our growth and the individual market's growth demonstrate its durability and the power of reorienting healthcare around the consumer. The market is giving consumers the ability to choose plans that fit their needs. which is driving competition, lower costs, and the lowest uninsured rate in our country's history. Direct-to-consumer markets simply work better. The individual market will continue to unlock new growth and replace traditional insurance models, and Oscar is leading the way. I am incredibly proud of the Oscar team and their leadership in achieving our best year yet. We look forward to delivering strong results for our members and partners in 2025. I will now turn the call over to Scott. Scott.