[Filing Information](index=1&type=section&id=Filing%20Information) This section provides details on the Form 10-Q filing, including registrant status and outstanding shares [Form 10-Q Details](index=1&type=section&id=Form%2010-Q%20Details) Details of the Form 10-Q filing, including registrant status and outstanding Class A and B Common Stock - The company is an **accelerated filer**[3](index=3&type=chunk)[4](index=4&type=chunk) Outstanding Shares as of August 1, 2025 | Class of Stock | Shares Outstanding | | :--------------- | :----------------- | | Class A Common Stock | 420,139,394 | | Class B Common Stock | 92,373,157 | [Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section outlines the inherent risks and uncertainties associated with forward-looking statements in the report [Forward-Looking Statements and Risks](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risks) Forward-looking statements are subject to risks concerning financial performance, business strategy, regulatory changes, and market conditions - Forward-looking statements are subject to risks including those related to **financial performance**, **business strategy**, **regulatory environment**, and **market conditions**[11](index=11&type=chunk)[13](index=13&type=chunk) - Risks include expectations regarding results of operations, financial condition, and cash flows - Ability to maintain and increase adoption and use of Clover Assistant, including expansion for external payors and providers - Impact of current, pending, or future legislation, regulations, or policies on revenue, profit margins, and cash flows - Ability to maintain or improve Star Ratings and financial performance - General economic conditions, persistent high inflation, and fluctuating interest rates [Additional Information and Disclosure Channels](index=4&type=section&id=Additional%20Information%20and%20Disclosure%20Channels) This section details where additional company information and SEC filings can be accessed, including digital channels [Company Website and Social Media](index=4&type=section&id=Company%20Website%20and%20Social%20Media) Company information and SEC filings are available on its website and investor relations page, with social media also used for disclosures - Company filings are available free of charge on its website **www.cloverhealth.com** and the SEC website[16](index=16&type=chunk) - Material information is routinely announced via SEC filings, press releases, public conference calls, presentations, webcasts, and the **investor relations page (investors.cloverhealth.com)**[17](index=17&type=chunk) - Social media channels (**@CloverHealth, CloverHealth on X**, and LinkedIn accounts of CEO/CFO) are also used for disclosing company information[17](index=17&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited condensed consolidated financial statements, including Balance Sheets, Statements of Operations, Equity, and Cash Flows, with explanatory notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and stockholders' equity at specific dates Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | $188,648 | $194,543 | | Total current assets | $362,939 | $343,124 | | Total assets | $574,987 | $580,742 | | **Liabilities** | | | | Unpaid claims | $139,660 | $156,396 | | Total current liabilities | $201,948 | $213,516 | | Total liabilities | $230,808 | $239,599 | | **Stockholders' Equity** | | | | Total stockholders' equity | $344,179 | $341,143 | | Total liabilities and stockholders' equity | $574,987 | $580,742 | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) This section outlines the company's financial performance, including revenues, expenses, and net income or loss over specific periods Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except per share) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Premiums earned, net | $469,826 | $349,900 | $926,732 | $691,622 | | Other income | $7,794 | $6,360 | $13,219 | $11,560 | | Total revenues | $477,620 | $356,260 | $939,951 | $703,182 | | Net medical claims incurred | $377,992 | $248,347 | $731,434 | $513,509 | | Total operating expenses | $488,179 | $349,073 | $951,784 | $718,698 | | Net (loss) income from continuing operations | $(10,578) | $7,170 | $(11,852) | $(16,000) | | Net (loss) income | $(10,578) | $7,408 | $(11,852) | $(11,762) | | Basic (loss) earnings per share (continuing operations) | $(0.02) | $0.01 | $(0.02) | $(0.03) | | Diluted (loss) earnings per share (continuing operations) | $(0.02) | $0.01 | $(0.02) | $(0.03) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section details the changes in stockholders' equity, reflecting impacts from net loss, stock-based compensation, and repurchases Changes in Stockholders' Equity (in thousands) | Metric | Balance, Dec 31, 2024 | Stock-based compensation | Repurchases of common stock | Net loss | Balance, June 30, 2025 | | :----------------------------------- | :-------------------- | :----------------------- | :-------------------------- | :------- | :--------------------- | | Total stockholders' equity | $341,143 | $52,632 | $(18,298) | $(11,852) | $344,179 | - Total stockholders' equity increased from **$341,143 thousand** at December 31, 2024, to **$344,179 thousand** at June 30, 2025, primarily due to **stock-based compensation** and unrealized gains on investments, partially offset by net loss and common stock repurchases[25](index=25&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(10,885) | $70,692 | | Net cash provided by investing activities | $44,496 | $14,139 | | Net cash used in financing activities | $(39,506) | $(6,554) | | Net (decrease) increase in cash and cash equivalents | $(5,895) | $78,277 | | Cash and cash equivalents, end of period | $188,648 | $254,771 | - Net cash used in operating activities from continuing operations was **$(10.9) million** for the six months ended June 30, 2025, a significant decrease from **$79.7 million** provided in the prior year, primarily due to a net loss and changes in operating assets and liabilities[27](index=27&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) - Net cash provided by investing activities increased to **$44.5 million** in 2025 from **$14.1 million** in 2024, driven by higher proceeds from sales and maturities of investment securities[27](index=27&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - Net cash used in financing activities increased to **$(39.5) million** in 2025 from **$(6.6) million** in 2024, mainly due to cash paid for shares withheld related to stock-based compensation and common stock repurchases[27](index=27&type=chunk)[151](index=151&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Organization and Operations](index=10&type=section&id=Note%201.%20Organization%20and%20Operations) Clover Health leverages its Clover Assistant platform to improve care and launched Counterpart Health for external MA payors - Clover Health's core strategy is to use its **Clover Assistant technology** to help seniors receive better care at lower costs by empowering physicians to identify and manage chronic diseases early[29](index=29&type=chunk)[31](index=31&type=chunk) - In 2024, the company launched **Counterpart Health, Inc.**, a Software-as-a-Service (SaaS) and Tech Enabled Services Solution, to offer its AI-powered care management platform to external Medicare Advantage payors and providers, aiming for new growth and high-margin business opportunities[32](index=32&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's key accounting policies, estimates, and the evaluation of recent accounting pronouncements - The Company operates as one reportable segment, **'Insurance'**, providing PPO and HMO plans to Medicare Advantage members[40](index=40&type=chunk) - Significant estimates are made for **incurred but not reported claims**, which are subject to variability from economic conditions, healthcare policy changes, and medical technology advancements[36](index=36&type=chunk) - The Company is evaluating the impact of new accounting pronouncements **ASU 2023-09 (Income Taxes)** and **ASU 2024-03 (Expense Disaggregation Disclosures)** on future financial statements[45](index=45&type=chunk)[46](index=46&type=chunk) [Note 3. Investment Securities](index=12&type=section&id=Note%203.%20Investment%20Securities) Details on the company's investment portfolio, including fair value, net investment income, and credit quality of securities Investment Securities Fair Value (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Total held-to-maturity and available-for-sale investment securities | $200,462 | $242,644 | Net Investment Income (in thousands) | Period | 2025 | 2024 | | :----------------------------------- | :----- | :----- | | Three Months Ended June 30, | $4,682 | $5,734 | | Six Months Ended June 30, | $9,290 | $10,201 | - All investment securities were **investment grade (BBB or higher)** at June 30, 2025, with unrealized losses primarily due to changes in interest rates[50](index=50&type=chunk) [Note 4. Fair Value Measurements](index=14&type=section&id=Note%204.%20Fair%20Value%20Measurements) Fair value measurements of financial instruments, primarily Level 2 debt securities and Level 3 private warrants receivable Total Assets at Fair Value (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Total assets at fair value | $190,990 | $229,480 | | Warrants receivable (Level 3) | $745 | $764 | - Private warrants receivable, classified as **Level 3**, decreased slightly due to unrealized losses of less than **$0.1 million** for the six months ended June 30, 2025[53](index=53&type=chunk)[54](index=54&type=chunk) [Note 5. Healthcare Receivables](index=15&type=section&id=Note%205.%20Healthcare%20Receivables) Overview of healthcare receivables, including pharmaceutical rebates and Medicare Part D settlements, showing a decrease from prior period Healthcare Receivables (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Healthcare receivables | $46,893 | $51,539 | [Note 6. Related Party Transactions](index=15&type=section&id=Note%206.%20Related%20Party%20Transactions) Details on related party transactions, including expenses with CarePoint Health, Credo Health, and Thyme Care Related Party Expenses (in thousands) | Related Party | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | CarePoint Health | $4,400 | $2,800 | | Credo Health Solutions, Inc. | $300 | $400 | | Thyme Care, Inc. | $4,200 | $2,300 | - **CarePoint Health** is no longer considered a related party as of May 22, 2025, following its emergence from Chapter 11 bankruptcy[57](index=57&type=chunk) [Note 7. Unpaid Claims](index=16&type=section&id=Note%207.%20Unpaid%20Claims) Analysis of unpaid claims liability, including favorable development and faster processing of current year medical claims Unpaid Claims Activity (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Gross and net balance, beginning of period | $156,396 | $137,100 | | Total incurred | $715,819 | $503,606 | | Total paid | $732,555 | $440,156 | | Gross and net balance, end of period | $139,660 | $200,550 | - Favorable development of **$2.8 million** recognized for prior years' claims in H1 2025, compared to **$28.0 million** in H1 2024[62](index=62&type=chunk) - Current year medical claims paid as a percentage of current year Net medical claims incurred increased to **81.7%** in H1 2025 (from **67.6%** in H1 2024), indicating faster claims processing[62](index=62&type=chunk) [Note 8. Variable Interest Entity and Equity Method of Accounting](index=17&type=section&id=Note%208.%20Variable%20Interest%20Entity%20and%20Equity%20Method%20of%20Accounting) Details on the company's equity method investment in Character Biosciences, Inc., with no shared loss recognized - Clover Health's ownership in **Character Biosciences, Inc.** decreased to approximately **9.1%** by June 30, 2025[63](index=63&type=chunk) - No shared loss was recognized for the three and six months ended June 30, 2025, as the investment carrying amount was reduced to zero by cumulative shared losses as of **March 31, 2024**[65](index=65&type=chunk) [Note 9. Employee Benefit Plans](index=17&type=section&id=Note%209.%20Employee%20Benefit%20Plans) Overview of employee benefit plans, including 401(k) and equity incentive plans, and stock-based compensation expense Stock-based Compensation Expense (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | $116 | $530 | $294 | $1,148 | | RSUs | $23,069 | $20,400 | $46,093 | $41,317 | | PRSUs | $2,904 | $6,944 | $5,987 | $14,157 | | ESPP | $106 | $26 | $258 | $76 | | Total compensation cost | $26,195 | $27,900 | $52,632 | $56,698 | - Unrecognized stock-based compensation expense totaled approximately **$363.0 million** at June 30, 2025[73](index=73&type=chunk) - The **2020 Plan** includes an evergreen provision for increasing shares available for issuance, with a reduction in the percentage for fiscal years beginning with 2025[69](index=69&type=chunk) [Note 10. Income Taxes](index=21&type=section&id=Note%2010.%20Income%20Taxes) Discussion of the company's 0.0% effective tax rate due to net operating losses and valuation allowance, and OBBBA evaluation - The effective tax rate was **0.0%** for both the three and six months ended June 30, 2025 and 2024, due to net operating losses and a full valuation allowance[83](index=83&type=chunk) - The company is currently evaluating the financial impact of the **One Big Beautiful Bill Act (OBBBA)** on its US federal corporate income tax system[84](index=84&type=chunk) [Note 11. Net (Loss) Income per Share](index=22&type=section&id=Note%2011.%20Net%20(Loss)%20Income%20per%20Share) Analysis of net loss per share, with potentially dilutive securities excluded due to anti-dilutive effects during loss periods Net (Loss) Income per Share (Continuing Operations) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :----------------------------------- | :------------------------------- | :----------------------------- | | Basic (loss) earnings per share | $(0.02) | $(0.02) | | Diluted (loss) earnings per share | $(0.02) | $(0.02) | Potentially Dilutive Shares Excluded (in thousands) | Type of Shares | June 30, 2025 (3 months) | June 30, 2025 (6 months) | | :----------------------------------- | :----------------------- | :----------------------- | | Options to purchase common stock | 23,993,192 | 23,993,192 | | RSUs | 41,224,131 | 41,224,131 | | PRSUs | 28,799,293 | 28,799,293 | | Total potentially dilutive shares excluded | 94,016,616 | 94,016,616 | - Potentially dilutive securities were excluded from diluted EPS calculations for periods with net losses because their inclusion would be **anti-dilutive**[85](index=85&type=chunk) [Note 12. Commitments and Contingencies](index=23&type=section&id=Note%2012.%20Commitments%20and%20Contingencies) Overview of legal proceedings, including the conclusion of an SEC investigation and settlements of class action and derivative lawsuits - The **SEC investigation**, initiated in February 2021, concluded on **September 26, 2024**, with the Staff not recommending an enforcement action against the company[88](index=88&type=chunk) - A securities class action was settled for **$22 million**, with **$19.5 million** funded by insurance proceeds[89](index=89&type=chunk) - Shareholder derivative actions were settled, resulting in **corporate governance enhancements** and a **$2.5 million** payment for plaintiffs' counsel fees, with no monetary payment from the company[90](index=90&type=chunk) [Note 13. Operating Segments](index=24&type=section&id=Note%2013.%20Operating%20Segments) The company operates solely through its Insurance segment, reporting net losses for the three and six months ended June 30, 2025 - The company operates solely through its **Insurance segment**, offering PPO and HMO Medicare Advantage plans[91](index=91&type=chunk) Insurance Segment Net (Loss) Income (in thousands) | Period | 2025 | 2024 | | :----------------------------------- | :---------- | :---------- | | Three Months Ended June 30, | $(32,388) | $2,355 | | Six Months Ended June 30, | $(51,771) | $(24,226) | [Note 14. Dividend Restrictions](index=24&type=section&id=Note%2014.%20Dividend%20Restrictions) State regulations restrict dividend payments from regulated insurance subsidiaries to the parent company, with no dividends paid to date - Regulated insurance subsidiaries are subject to **state regulations** limiting dividend payments to the parent company[93](index=93&type=chunk) - No dividends were authorized or paid by the regulated insurance subsidiaries as of **June 30, 2025**[93](index=93&type=chunk) [Note 15. Restructuring costs](index=25&type=section&id=Note%2015.%20Restructuring%20costs) Business transformation initiatives concluded by December 31, 2024, resulting in no restructuring costs for the current periods - Business transformation initiatives, including a **workforce reduction** and **platform migration**, were concluded by **December 31, 2024**[94](index=94&type=chunk) Restructuring Costs (in thousands) | Period | 2025 | 2024 | | :----------------------------------- | :--- | :--- | | Three Months Ended June 30, | $0 | $473 | | Six Months Ended June 30, | $0 | $826 | [Note 16. Discontinued Operations](index=25&type=section&id=Note%2016.%20Discontinued%20Operations) Clover Health exited the ACO REACH Program, resulting in no net income from discontinued operations for current periods - Clover Health exited the **ACO REACH Program**, effective for the 2024 performance year, with remaining activities related to the December 2024 settlement for prior performance years[95](index=95&type=chunk) Net Income from Discontinued Operations (in thousands) | Period | 2025 | 2024 | | :----------------------------------- | :--- | :--- | | Three Months Ended June 30, | $0 | $238 | | Six Months Ended June 30, | $0 | $4,238 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of financial condition, results of operations, liquidity, and capital resources, including key performance measures [Overview](index=26&type=section&id=Overview) Clover Health's strategy focuses on empowering physicians with Clover Assistant to improve care and lower costs for Medicare Advantage members - Clover Health's vision is to empower physicians with **Clover Assistant technology** to identify, manage, and treat chronic diseases earlier, thereby improving care and lowering costs for Medicare beneficiaries[97](index=97&type=chunk) - As of June 30, 2025, the company operated MA plans in **five states** and **200 counties**, serving **106,323 members**[98](index=98&type=chunk) [Key Performance Measures](index=26&type=section&id=Key%20Performance%20Measures) Key performance measures for the Insurance segment include membership, premiums earned, medical claim expenses, and various ratios - The company's key performance measures include **Insurance members at period end**, **Premiums earned (gross and net)**, **Insurance medical claim expense incurred (gross and net)**, **Benefits expense ratio (gross and net)**, **Adjusted SG&A**, **Adjusted EBITDA**, and **Adjusted Net income from continuing operations**[103](index=103&type=chunk) Key Financial Measures (in thousands, except PMPM) | Metric | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :-------------- | :-------------- | | Insurance members at period end () | 106,323 | 80,261 | | Premiums earned, net | $469,826 | $349,900 | | Insurance net medical claims incurred | $394,212 | $249,406 | | Benefits expense ratio, net | 88.4% | 76.1% | - **Member growth and retention** are key to driving total revenues, expanding brand awareness, deepening market penetration, and generating data for Clover Assistant to improve care and decrease medical claim expenses[104](index=104&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP financial measures like Adjusted SG&A and Adjusted EBITDA are used to assess core operating performance by excluding non-cash and non-recurring items - **Insurance BER (Benefits expense ratio):** Calculated as total Insurance net medical expenses incurred and quality improvements divided by net premiums earned. It provides a comprehensive view of costs related to maintaining and improving care quality[114](index=114&type=chunk) - **Adjusted SG&A:** Total SG&A less stock-based compensation and non-recurring legal expenses/settlements, offering insight into core operating expenses and operational leverage[117](index=117&type=chunk) - **Adjusted EBITDA:** Net (loss) income from continuing operations before depreciation, loss on investment, interest expense, change in fair value of warrants, stock-based compensation, premium deficiency reserve benefit, restructuring costs, impairment, and non-recurring legal expenses/settlements. Used to evaluate operating performance and trends[119](index=119&type=chunk) - **Adjusted Net income from continuing operations:** Net (loss) income from continuing operations before stock-based compensation, premium deficiency reserve benefit, restructuring costs, non-recurring legal expenses/settlements, and impairment. Helps assess financial performance by excluding certain non-cash and non-recurring items[121](index=121&type=chunk) Non-GAAP Financial Measures (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Benefits expense ratio, net | 88.4% | 76.1% | 87.3% | 79.6% | | Adjusted SG&A | $82,493 | $71,704 | $165,600 | $146,644 | | Adjusted EBITDA | $17,135 | $36,209 | $42,917 | $43,029 | | Adjusted Net income from continuing operations | $16,722 | $35,862 | $42,038 | $41,897 | [Results of Operations](index=31&type=section&id=Results%20of%20Operations) Analysis of revenue growth, medical claims, and operating expenses, resulting in a net loss from continuing operations for the current periods [Comparison of the Three Months Ended June 30, 2025 and 2024](index=31&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030%2C%202025%20and%202024) Total revenues increased by 34.1% to $477.6 million, driven by member growth, but net medical claims incurred surged by 52.2%, leading to a net loss Three Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Premiums earned, net | $469,826 | $349,900 | $119,926 | 34.3% | | Total revenues | $477,620 | $356,260 | $121,360 | 34.1% | | Net medical claims incurred | $377,992 | $248,347 | $129,645 | 52.2% | | Salaries and benefits | $61,309 | $55,499 | $5,810 | 10.5% | | General and administrative expenses | $48,484 | $44,424 | $4,060 | 9.1% | | Net (loss) income from continuing operations | $(10,578) | $7,170 | $(17,748) | * | | Net (loss) income | $(10,578) | $7,408 | $(17,986) | * | - Premiums earned, net increased by **34%** primarily due to approximately **32% growth in average members**[125](index=125&type=chunk) - Net medical claims incurred increased by **52%** due to member growth and increased Part D cost sharing from the Inflation Reduction Act, as well as less favorable prior period developments compared to the current year[127](index=127&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=32&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Total revenues increased by 33.7% to $939.9 million, driven by member growth, with net medical claims incurred up 42.4%, resulting in a net loss Six Months Ended June 30, 2025 vs. 2024 (in thousands) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :----------------------------------- | :----- | :----- | :--------- | :--------- | | Premiums earned, net | $926,732 | $691,622 | $235,110 | 34.0% | | Total revenues | $939,951 | $703,182 | $236,769 | 33.7% | | Net medical claims incurred | $731,434 | $513,509 | $217,925 | 42.4% | | Salaries and benefits | $120,331 | $114,722 | $5,609 | 4.9% | | General and administrative expenses | $99,159 | $88,993 | $10,166 | 11.4% | | Net loss from continuing operations | $(11,852) | $(16,000) | $4,148 | (25.9%) | | Net loss | $(11,852) | $(11,762) | $(90) | 0.8% | - Premiums earned, net increased by **34%** primarily due to approximately **30% growth in average members**[132](index=132&type=chunk) - Net medical claims incurred increased by **42%** due to member growth and increased Part D cost sharing from the Inflation Reduction Act, as well as less favorable prior period developments compared to the current year[134](index=134&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity, comprising cash, cash equivalents, and investments, decreased to $389.3 million, but is expected to meet future requirements Cash, Cash Equivalents, and Investments (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :-------------- | :---------------- | | Total cash, cash equivalents, and investments | $389,300 | $437,600 | | Unregulated Entities (Parent & Unregulated Subs) | $145,900 | $151,500 | | Regulated Entities (Regulated Subs) | $243,400 | $286,100 | Cash Flows from Continuing Operations (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(10,885) | $79,697 | | Net cash provided by investing activities | $44,496 | $14,139 | | Net cash used in financing activities | $(39,506) | $(6,554) | - The company expects current cash, investments, and projected cash flows to be sufficient for operating and regulatory requirements for the **next 12 months**[138](index=138&type=chunk) [Contractual Obligations and Commitments](index=35&type=section&id=Contractual%20Obligations%20and%20Commitments) Material cash requirements include $2.8 million in operating lease obligations, expected to be met by current resources and projected cash flows - Material cash requirements from known contractual obligations at June 30, 2025, include **$2.8 million** in operating lease obligations[154](index=154&type=chunk) - The company does not have any **off-balance sheet arrangements** that are reasonably likely to have a material effect on its financial condition or results of operations[156](index=156&type=chunk) [Indemnification Agreements](index=35&type=section&id=Indemnification%20Agreements) The company routinely enters into indemnification agreements with various parties to protect them from third-party claims - The company enters into **indemnification agreements** with various parties in the ordinary course of business, agreeing to defend and indemnify them from third-party claims related to the company's obligations[155](index=155&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No significant changes occurred in critical accounting policies and estimates during the three months ended June 30, 2025 - No significant changes in **critical accounting policies and estimates** occurred during the three months ended June 30, 2025[157](index=157&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=35&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) Information on recently issued and adopted accounting pronouncements is detailed in Note 2, 'Summary of Significant Accounting Policies' - Details on recently issued and adopted accounting pronouncements are provided in **Note 2, 'Summary of Significant Accounting Policies'**[158](index=158&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk from fixed-maturity investments, managed by investing in high-quality, diversified securities - The primary market risk is **interest rate risk** from fixed-maturity investments, mainly U.S. government debt securities[159](index=159&type=chunk)[161](index=161&type=chunk) - **Credit risk** is managed by investing in high-quality, diversified securities; all fixed-maturity securities were **investment grade (BBB or higher)** at June 30, 2025[160](index=160&type=chunk)[161](index=161&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - **Disclosure controls and procedures** were evaluated and deemed effective as of June 30, 2025[162](index=162&type=chunk) - No material changes in **internal control over financial reporting** occurred during the most recent fiscal quarter[164](index=164&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part covers other information including legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=37&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings and investigations, with further details referenced in Note 12 - The company is subject to various **legal proceedings and investigations** incidental to its highly regulated business[167](index=167&type=chunk) - Further details on legal proceedings are incorporated by reference from **Note 12 (Commitments and Contingencies)**[168](index=168&type=chunk) [Item 1A. Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors from the 2024 Form 10-K, but the company remains exposed to various business and financial risks - No material changes to **risk factors** from the 2024 Form 10-K, except as updated in subsequent filings[169](index=169&type=chunk) - The company is exposed to a variety of risks that could adversely affect its **financial results and condition**, and the market price of its Class A common stock[169](index=169&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report during the period - No **unregistered sales of equity securities** or use of proceeds to report[170](index=170&type=chunk) [Item 3. Defaults Upon Senior Securities](index=37&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report during the period - No **defaults upon senior securities** to report[170](index=170&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the company's operations - **Mine Safety Disclosures** are not applicable to the company[171](index=171&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No directors or officers adopted or terminated **Rule 10b5-1** or **non-Rule 10b5-1 trading arrangements** during the three months ended June 30, 2025[172](index=172&type=chunk) [Item 6. Exhibits](index=38&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL documents - The exhibits include **certifications from the Principal Executive Officer and Principal Financial Officer**, as well as Inline XBRL documents[173](index=173&type=chunk) [Signatures](index=39&type=section&id=Signatures) This section contains the official signatures of the company's Chief Executive Officer and Chief Financial Officer [Signatures](index=39&type=section&id=Signatures) The report is officially signed by the Chief Executive Officer and Chief Financial Officer on August 8, 2025 - The report is signed by **Andrew Toy, Chief Executive Officer**, and **Peter Kuipers, Chief Financial Officer**, on **August 8, 2025**[179](index=179&type=chunk)

Core Insights - Clover Health Investments reported Q2 2025 results with significant revenue growth, achieving GAAP sales of $477.6 million, exceeding analyst expectations of $468.3 million [1][5] - Despite revenue gains, profitability metrics weakened compared to Q2 2024, with a net loss per share of $(0.02) and an insurance benefits expense ratio (BER) of 88.4% [1][2] Financial Performance - Revenue increased by 34.0% year-over-year from $356.3 million in Q2 2024 to $477.6 million in Q2 2025 [2][5] - Adjusted net income from continuing operations fell to $16.7 million, down 53.5% from $35.9 million in Q2 2024 [2][6] - Adjusted EBITDA decreased by 52.8% to $17.1 million compared to $36.2 million in the previous year [2][6] - The insurance BER rose from 76.1% to 88.4%, indicating increased medical costs relative to premiums [2][7] Membership Growth - Medicare Advantage membership grew by 32% year-over-year, reaching 106,323 members as of June 30, 2025, up from 80,261 in the previous year [5][11] - The company aims to expand its membership in underserved markets and enhance the Clover Assistant platform [4][9] Strategic Initiatives - Clover Health is focusing on three main areas: expanding the Clover Assistant platform, growing MA plan membership, and developing Counterpart Health, a new technology and services business [4][9] - Management highlighted the importance of balancing rapid membership growth with the need to control rising medical costs [4][6] Outlook - The company updated its fiscal 2025 guidance, expecting average Medicare Advantage membership to reach between 104,000 and 108,000 [11] - Insurance revenue forecast remains at $1.8 billion to $1.875 billion, with adjusted EBITDA and net income targets set at $50 million to $70 million each [11] - The updated forecast for the Insurance BER is now projected to be between 88.5% and 89.5% for the full year [11]

Core Viewpoint - Clover Health Investments, Corp. reported quarterly earnings of $0.03 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.01 per share a year ago [1] - The company posted revenues of $477.62 million for the quarter ended June 2025, which was 1.01% below the Zacks Consensus Estimate, but up from $356.26 million year-over-year [2] Group 1: Earnings Performance - Clover Health surpassed consensus EPS estimates three times over the last four quarters, with a notable surprise of +171.43% in the previous quarter [1] - The current consensus EPS estimate for the upcoming quarter is $0.03, with projected revenues of $463.9 million, and for the current fiscal year, the estimate is $0.11 on $1.89 billion in revenues [7] Group 2: Stock Performance and Outlook - Clover Health shares have declined approximately 8.6% since the beginning of the year, contrasting with the S&P 500's gain of 7.6% [3] - The company's earnings outlook and management commentary will be crucial for determining the sustainability of the stock's price movement [3][4] Group 3: Industry Context - Clover Health operates within the Zacks Medical Info Systems industry, which is currently ranked in the top 29% of over 250 Zacks industries [8] - The performance of Clover Health's stock may be influenced by the overall outlook for the industry, as top-ranked industries tend to outperform lower-ranked ones significantly [8]

Financial Data and Key Metrics Changes - The company reported a 32% year-over-year growth in Medicare Advantage membership, reaching over 106,000 members [20] - Insurance revenue increased by 34% to $470 million in Q2 2025, with year-to-date revenue at $927 million [20] - Adjusted EBITDA for Q2 2025 was $70 million, maintaining year-to-date adjusted EBITDA at $43 million [24] - GAAP net loss improved by $4 million year-to-date to $12 million [19][24] - The insurance benefit expense ratio (BER) was reported at 88.4%, up from 76.1% in 2024 [24] Business Line Data and Key Metrics Changes - The Medicare Advantage segment continues to show robust growth, with a focus on leveraging technology to enhance care management [5][8] - The company is experiencing elevated utilization levels in supplemental benefits and Part D, which are being monitored closely [21][22] Market Data and Key Metrics Changes - The company is insulated from broader industry pressures affecting Medicaid and ACA markets due to its focus on Medicare Advantage [10] - The Part D direct subsidy rate for 2026 is significantly higher than for 2025, indicating potential cost pressures that may alleviate in 2026 [12] Company Strategy and Development Direction - The company aims to achieve profitability, return to growth while sustaining profitability, and leverage its differentiated model for accelerated growth [6] - The focus remains on expanding the reach of Clover Assistant and enhancing member retention in existing markets [14] - The company is strategically positioned for a four-star payment year in 2026, which is expected to provide financial tailwinds [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming membership growth season, potentially stronger than the current year [7] - The company is closely monitoring the impacts of the Part D IRA changes and anticipates variability in performance modeling [11] - Management believes that the technology-centric care delivery model will differentiate the company amidst industry pressures [12][13] Other Important Information - The company has maintained a strong cash position with $389 million in cash and investments as of Q2 2025 [26] - Days in claims payable decreased to 32 days, indicating normalization of claims inventory [25] Q&A Session Summary Question: How much conservatism is embedded in the raised guidance on the BER? - The increase in the BER guidance is primarily related to Part D and supplemental benefits, with initiatives in place to monitor these trends going forward [36][37] Question: When did the pressures start emerging, and how much was captured in the bids for next year? - The pressures, especially on Part D, have been tracked throughout the year, with adjustments made in pricing for bids [38][39] Question: What are the drivers for improvements in adjusted SG&A? - Improvements are mainly due to cost efficiencies and renegotiations with partners, reflecting the company's strong growth [41][42] Question: What response has been received from the COPD white paper? - The company plans to continue producing similar papers to highlight the benefits of using Clover Assistant in managing care [43][44] Question: Is the elevated cost trend localized or broad-based? - The elevated cost trends are not specific to new or returning members and are being monitored across the board [48][50] Question: How is the competitive landscape changing for the upcoming AEP? - Competitors are pulling back in certain areas, particularly within PPO networks, which may benefit the company due to its strong positioning [51][52]

Second Quarter 2025 Earnings Conference Call August 5, 2025 LGTMs: Date: Andrew T. (Input) Verbal LGTM 8/1 Peter K. LGTM 8/1 af Legal (Karen / Peter R.) LGTM 8/4 Accounting (#s confirm) LGTM (7/31 - Joe) Disclaimer This presentation and the accompanying oral presentation include forward-looking statements, including, without limitation, statements regarding future events and Clover Health Investments, Corp.'s ("Clover Health," "we," "our," or "us") expectations regarding Adjusted EBITDA, Adjusted Net income ...

Core Insights - Clover Health Investments, Corp. reported strong financial results for Q2 2025, highlighting significant membership and revenue growth, along with sustained profitability metrics [2][3][4] - The company's technology-first model is credited for driving better care management and improved health outcomes for members, particularly in Medicare Advantage plans [3][20] - Clover Health updated its full-year 2025 guidance, maintaining insurance revenue expectations while improving projections for adjusted SG&A and membership growth [10][4] Financial Performance - Q2 2025 insurance revenue reached $469.8 million, a 34.3% increase from $349.9 million in Q2 2024 [4][3] - Total revenues for Q2 2025 were $477.6 million, up 34% year-over-year [4][3] - Average Medicare Advantage membership increased by 31.8% year-over-year to 105,494 [4][3] - Adjusted net income from continuing operations was $16.7 million, down 53.5% from $35.9 million in Q2 2024 [4][3] - Adjusted EBITDA for Q2 2025 was $17.1 million, a decrease of 52.8% compared to $36.2 million in Q2 2024 [4][3] Membership and Revenue Guidance - The company expects average Medicare Advantage membership to be between 104,000 and 108,000 for the full year 2025, representing a 32% growth year-over-year at the midpoint [4][10] - Insurance revenue guidance for 2025 is maintained at $1.800 billion to $1.875 billion, indicating a 37% growth year-over-year at the midpoint [10][4] - Adjusted SG&A is projected to be between $335 million and $345 million, improving as a percentage of total revenues to 18% - 19% [10][4] Operational Metrics - The Insurance Benefits Expense Ratio (BER) for Q2 2025 was 88.4%, up from 76.1% in Q2 2024 [4][3] - The company reported a net loss from continuing operations of $10.6 million for Q2 2025, compared to a net income of $7.2 million in Q2 2024 [4][3] - Total cash, cash equivalents, and investments decreased by 19.4% to $389.3 million from $482.8 million year-over-year [4][3]

Core Insights - The new whitepaper from Counterpart Health demonstrates that a relationship with a primary care physician (PCP) using Counterpart Assistant is linked to improved management of Chronic Obstructive Pulmonary Disease (COPD), including more frequent diagnoses, increased specialty care, and significant reductions in hospitalizations and readmissions [2][4][5]. Group 1: Study Findings - The study indicates that COPD patients under the care of a PCP using Counterpart Assistant experienced a 15% lower average number of all-cause hospitalizations [8]. - There was an 18% reduction in the average number of 30-day readmissions for COPD patients attributed to PCPs utilizing Counterpart Assistant [8]. - New members with no prior COPD diagnosis who joined a Clover Medicare Advantage plan were 75% more likely to be diagnosed with COPD within their first year when cared for by a PCP using Counterpart Assistant [8]. Group 2: Technology Impact - Counterpart Assistant synthesizes over 100 real-time data streams with evidence-based guidelines to provide actionable recommendations, enhancing the ability of clinicians to manage COPD effectively [4]. - The whitepaper is the fifth retrospective analysis measuring the clinical impact of Counterpart Assistant on chronic disease management, building on previous studies related to heart failure, diabetes, and chronic kidney disease [5][7]. - The technology has shown positive correlations with improved patient care across various chronic conditions, reinforcing its role in proactive management of high-risk diseases [4][5].

Core Insights - Clover Health Investments (CLOV) is expected to report second-quarter 2025 results on August 5, with earnings estimated at 3 cents per share and revenues at $482.5 million, reflecting a year-over-year growth of 200% and 35.4% respectively [1][5] - The consensus for 2025 revenues stands at $1.89 billion, indicating a 37.7% increase year-over-year, while the EPS estimate is 11 cents, suggesting a decline of 21.4% year-over-year [2] Financial Performance - Clover Health has consistently surpassed earnings estimates in the past four quarters, achieving an average surprise of 114.58% [2] - The company has a Zacks Rank of 3 (Hold), with an Earnings ESP of 0.00%, indicating no expected earnings surprise for the upcoming quarter [3][4] Growth Factors - The company reported a 30% growth in Medicare Advantage (MA) membership and a 279% increase in adjusted earnings year-over-year for the first quarter [5] - The Clover Assistant has demonstrated an 18% reduction in hospitalizations and 25% lower 30-day readmissions for congestive heart failure patients, contributing to cost efficiencies [6][7] Market Position - Member growth remains strong, particularly in key markets like New Jersey, supported by effective cohort management strategies [8] - Clover Health's Counterpart Health is expanding its technology reach, although the financial impact from non-insurance revenue in Q2 is expected to be limited [9] Valuation and Performance - Year-to-date, CLOV shares have declined by 8.2%, underperforming peers such as Alignment Healthcare and Oscar Health [10] - Clover Health trades at a forward 12-month price-to-sales ratio of 0.65, reflecting stronger growth expectations compared to its peers [11] Strategic Outlook - The company is focused on improving clinical outcomes and expanding its technology capabilities, with a cautious outlook on profitability and revenue contributions from Counterpart Health [15] - Investors are advised to monitor updates on utilization trends and the sustainability of operating leverage before making new investments [15]

Core Insights - Clover Health supports the White House and CMS initiative to create a patient-centric, interoperable healthcare ecosystem, emphasizing the importance of breaking down digital barriers in healthcare data sharing [1][2][5] Group 1: Technology and Data Integration - Clover Health's AI platform, Counterpart Assistant, connects to a majority of CMS-aligned data networks, facilitating the exchange of patient data and improving chronic disease care [1][2] - Counterpart Assistant integrates over a hundred data sources, providing physicians with a comprehensive longitudinal record for each patient, enhancing care coordination and reducing fragmented care [2][3] Group 2: Health Outcomes and Performance - The use of Counterpart Assistant has led to significant improvements in health outcomes, including earlier diagnosis and management of chronic conditions, contributing to Clover Health PPO plans achieving a 4 Star rating for 2025, with a score of 4.94 out of 5 on HEDIS measures [4][6] - Specific health improvements noted include an average of 36 months earlier diagnosis for diabetes, 18% lower all-cause hospitalizations for Congestive Heart Failure, and improved medication adherence following alerts to primary care physicians [6][4] Group 3: Focus on Underserved Areas - Counterpart Assistant primarily supports independent clinicians in rural and underserved areas, addressing the challenges these groups face in accessing data-sharing initiatives and improving patient care experiences [3][5] Group 4: Future Collaborations - Clover Health aims to collaborate with CMS, industry networks, and technology partners to expand data-sharing pathways, ensuring equitable access to digital resources for all healthcare providers [5][8]

Core Insights - Counterpart Health, Inc. has appointed Vicky Bruner as Vice President of Operations to lead critical functions as the company scales to meet growing demand from payors and providers nationwide [1][2] - Bruner's experience in provider enablement and healthcare systems is expected to be invaluable for Counterpart's expansion and operational readiness [3] Company Overview - Counterpart Health is a subsidiary of Clover Health Investments, Corp. and operates as an AI-powered physician enablement platform [4] - The flagship software platform, Counterpart Assistant, aims to improve plan performance and clinical outcomes for Medicare members through proprietary AI technology [4] Leadership and Experience - Vicky Bruner previously served as Vice President of Network Performance at Optum Care Network, where she led risk operations and improved quality performance across Medicare and Medicaid populations [3] - Her background in driving P&L performance and aligned execution at scale positions her well for Counterpart's next phase of growth [3] Product and Impact - Counterpart Assistant provides clinical insights to primary care providers, reducing administrative work and enhancing patient outcomes [4] - Clover Health has published data demonstrating the technology's positive impact on Medication Adherence, Congestive Heart Failure, and the management of Diabetes and Chronic Kidney Disease [4]