NeueHealth(NEUE) - 2025 Q2 - Quarterly Results

Executive Summary & Business Highlights Q2 2025 Financial & Operational Highlights NeueHealth reported strong financial results for Q2 2025, marking its sixth consecutive quarter of Adjusted EBITDA profitability, with significant growth in consumers served and improved Net Loss and Adjusted EBITDA compared to the prior year, despite a slight decrease in total Revenue Q2 2025 Key Financial Metrics (Three Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :------------------ | :------------------ | :----------- | | Revenue | $209,082 | $225,991 | -7.48% | | Net Loss | $(1,548) | $(57,698) | +97.32% | | Net Income (Loss) from Continuing Operations | $6,838 | $(39,259) | +117.42% | | Adjusted EBITDA (non-GAAP) | $19,020 | $3,962 | +380.08% | H1 2025 Key Financial Metrics (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :------------------ | :------------------ | :----------- | | Revenue | $424,869 | $471,086 | -9.81% | | Net Loss | $(12,396) | $(61,875) | +79.96% | | Net Income (Loss) from Continuing Operations | $5,400 | $(33,571) | +116.08% | | Adjusted EBITDA (non-GAAP) | $32,499 | $7,618 | +326.63% | Consumer and Patient Metrics (As of June 30) | Metric | 2025 | 2024 | Change (YoY) | | :-------------------------- | :----- | :----- | :----------- | | Value-Based Consumers served | 546,000 | 364,000 | +50.00% | | Enablement Services Lives | 148,000 | 113,000 | +30.97% | | Total Consumers Served | 694,000 | 477,000 | +45.49% | - The company achieved positive Adjusted EBITDA for the sixth consecutive quarter, demonstrating strong financial momentum and positioning for long-term growth[3][6] CEO Commentary CEO Mike Mikan expressed satisfaction with the strong financial results and continued momentum, highlighting consistent Adjusted EBITDA profitability and robust performance across key product categories, emphasizing the company's focus on advancing its end-to-end, value-based care enablement platform - Mike Mikan, President and CEO, reported a strong quarter, building on established momentum across the business[3] - The company delivered its sixth consecutive quarter of Adjusted EBITDA profitability[3] - NeueHealth is focused on advancing its end-to-end, value-based care enablement platform to support clinical, financial, and administrative functions for a more aligned and coordinated care experience[3] Company Information Earnings Conference Call & Investor Relations NeueHealth held an earnings conference call to discuss its Q2 2025 results, strategy, and outlook, utilizing its Investor Relations website for disclosing material, non-public information and complying with Regulation FD - A live webcast of the earnings conference call was accessible from the Investor Relations page of the Company's website (investors.neuethealth.com), with a replay available afterward[5] - The company routinely posts important information, including corporate and investor presentations and financial information, on its website[5] - NeueHealth intends to use its website as a means of disclosing material, non-public information and for complying with disclosure obligations under Regulation FD[5] About NeueHealth NeueHealth is a value-driven healthcare company committed to providing high-quality, coordinated, and affordable care across the ACA Marketplace, Medicare, and Medicaid, delivering care through owned clinics and partnerships with over 3,000 affiliated providers, also enabling independent providers to succeed in performance-based arrangements - NeueHealth is a value-driven healthcare company focused on high-quality, coordinated care for health consumers[8] - The company aligns the interests of health consumers, providers, and payors to make healthcare accessible and affordable across the ACA Marketplace, Medicare, and Medicaid[8] - NeueHealth delivers clinical care to over 600,000 health consumers through owned clinics and partnerships with over 3,000 affiliated providers, and enables independent providers with technology and services[8] Forward-Looking Statements & Risk Factors This section outlines forward-looking statements regarding future operations, business plans, and the pending merger transaction with NH Holdings 2025, Inc., detailing various risks and uncertainties that could cause actual results to differ materially, including those related to the merger, operational challenges, regulatory changes, and financial stability - The release contains forward-looking statements concerning future results of operations, business plans, strategies, and the timing and effects of the merger transaction with NH Holdings 2025, Inc[9] - Key risks include the failure to complete the transaction, potential litigation, adverse reactions to the transaction, stock price decline if the merger is not consummated, and costs associated with the transaction[9] - Other factors that might materially affect forward-looking statements include the ability to continue as a going concern, compliance with credit facilities, ability to obtain financing, wind down of IFP and MA businesses, and various operational, regulatory, and market risks[9] Consolidated Financial Statements Consolidated Balance Sheets As of June 30, 2025, NeueHealth reported an increase in Total Assets, primarily driven by a significant rise in ACO REACH performance year receivable and cash, while Total Liabilities also increased, largely due to the ACO REACH performance year obligation Consolidated Balance Sheet Highlights (in thousands) | Item | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $131,618 | $83,295 | +$48,323 | | ACO REACH performance year receivable | $321,596 | $95,075 | +$226,521 | | Total current assets | $639,882 | $434,648 | +$205,234 | | Total assets | $743,689 | $544,383 | +$199,306 | | Medical costs payable | $97,837 | $124,360 | -$26,523 | | ACO REACH performance year obligation | $248,465 | $0 | +$248,465 | | Total current liabilities | $908,412 | $710,228 | +$198,184 | | Total liabilities | $1,136,744 | $930,491 | +$206,253 | | Total shareholders' equity (deficit) | $(1,369,201) | $(1,355,105) | -$14,096 | Consolidated Statements of Income (Loss) For Q2 2025, NeueHealth reported a significant reduction in Net Loss and a positive Net Income (Loss) from Continuing Operations, driven by lower medical and operating costs, despite a decrease in total Revenue, with Capitated Revenue increasing while ACO REACH Revenue declined Consolidated Statements of Income (Loss) Highlights (in thousands, except per share data) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------- | | Capitated revenue | $82,532 | $64,005 | +28.95% | | ACO REACH revenue | $115,339 | $149,802 | -23.00% | | Total revenue | $209,082 | $225,991 | -7.48% | | Medical costs | $146,410 | $177,681 | -17.59% | | Operating costs | $44,860 | $70,470 | -36.20% | | Operating income (loss) | $14,257 | $(37,549) | +137.97% | | Net income (loss) from continuing operations | $6,838 | $(39,259) | +117.42% | | Net Loss | $(1,548) | $(57,698) | +97.32% | | Basic and diluted loss per share | $(2.62) | $(8.65) | +69.71% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------- | | Capitated revenue | $163,519 | $125,471 | +30.33% | | ACO REACH revenue | $239,379 | $321,613 | -25.60% | | Total revenue | $424,869 | $471,086 | -9.81% | | Medical costs | $307,304 | $374,555 | -17.95% | | Operating costs | $93,533 | $137,231 | -31.84% | | Operating income (loss) | $16,918 | $(60,651) | +127.90% | | Net income (loss) from continuing operations | $5,400 | $(33,571) | +116.08% | | Net Loss | $(12,396) | $(61,875) | +79.96% | | Basic and diluted loss per share | $(5.53) | $(12.23) | +54.78% | Consolidated Statements of Cash Flows For the six months ended June 30, 2025, Net Cash Used in Operating Activities decreased significantly, while Net Cash Provided by Investing Activities also decreased due to lower proceeds from business sales, and Net Cash Used in Financing Activities saw a substantial reduction Consolidated Statements of Cash Flows Highlights (in thousands) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :-------------------------------- | :----------------------------- | :----------------------------- | :----- | | Net cash used in operating activities | $(23,875) | $(77,148) | +$53,273 | | Net cash provided by investing activities | $54,650 | $189,281 | -$134,631 | | Net cash used in financing activities | $(3,249) | $(225,955) | +$222,706 | | Net increase (decrease) in cash and cash equivalents | $27,526 | $(113,822) | +$141,348 | | Cash and cash equivalents – end of period | $212,931 | $261,458 | -$48,527 | Segment Information NeueCare Segment Performance The NeueCare segment reported a significant increase in Total Segment Revenue and a strong turnaround to Operating Income (Loss) for both the three and six months ended June 30, 2025, primarily driven by higher Capitated Revenue and reduced Operating Expenses NeueCare Segment Performance (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | | Capitated revenue | $81,407 | $64,005 | +27.19% | | Total segment revenue | $91,628 | $76,985 | +18.99% | | Operating expenses | $68,416 | $82,887 | -17.46% | | Operating income (loss) | $23,212 | $(5,902) | +493.39% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | | Capitated revenue | $162,394 | $125,471 | +29.43% | | Total segment revenue | $182,145 | $150,608 | +20.94% | | Operating expenses | $135,926 | $146,698 | -7.34% | | Operating income (loss) | $46,219 | $3,910 | +1082.07% | NeueSolutions Segment Performance The NeueSolutions segment experienced a decrease in Total Segment Revenue for both the three and six months ended June 30, 2025, primarily due to lower ACO REACH Revenue, but reported an Operating Income (Loss) for the three-month period, a significant improvement from the prior year NeueSolutions Segment Performance (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | | ACO REACH revenue | $115,339 | $149,802 | -23.00% | | Total segment revenue | $120,010 | $152,075 | -21.10% | | Operating expenses | $117,456 | $151,678 | -22.57% | | Operating (loss) income | $2,554 | $397 | +543.32% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | | ACO REACH revenue | $239,379 | $321,613 | -25.60% | | Total segment revenue | $247,620 | $325,971 | -24.04% | | Operating expenses | $248,058 | $328,506 | -24.50% | | Operating (loss) income | $(438) | $(2,535) | +82.72% | Non-GAAP Financial Measures Non-GAAP Measures Definition & Rationale NeueHealth uses non-GAAP financial measures, Adjusted EBITDA and Adjusted Operating Cost Ratio, to provide supplemental insights into its financial performance, excluding certain items not indicative of core operating performance, aiding management and investors in comparing performance across periods and evaluating business strategies - Adjusted EBITDA is defined as Net Loss excluding loss from discontinued operations, interest expense, income taxes, depreciation and amortization, transaction costs, share-based compensation, impact of troubled debt restructuring, restructuring costs, impairment, losses related to ACO REACH partner bankruptcy, held-for-sale operations impact, and changes in fair value of derivatives[21] - Adjusted Operating Cost Ratio is defined as Operating Cost Ratio excluding share-based compensation expense[21] - These non-GAAP measures are used to assist management and investors in comparing operating performance consistently, highlighting trends, evaluating business strategies, and comparing performance against peers, as they exclude items not indicative of core operating performance[21] Adjusted EBITDA Reconciliation The reconciliation shows a significant improvement in Adjusted EBITDA for both the three and six months ended June 30, 2025, primarily due to a reduced Net Loss and lower share-based compensation expense compared to the prior year Adjusted EBITDA Reconciliation (in thousands) | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------- | | Net Loss | $(1,548) | $(57,698) | +97.32% | | Loss from Discontinued Operations | $8,386 | $18,439 | -54.52% | | Share-based and other long-term incentive compensation expense | $2,012 | $21,236 | -90.53% | | EBITDA adjustments from continuing operations | $12,182 | $43,221 | -71.83% | | Adjusted EBITDA | $19,020 | $3,962 | +380.08% | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------- | | Net Loss | $(12,396) | $(61,875) | +79.96% | | Loss from Discontinued Operations | $17,796 | $28,304 | -37.13% | | Share-based and other long-term incentive compensation expense | $7,658 | $39,862 | -80.80% | | EBITDA adjustments from continuing operations | $27,099 | $41,189 | -34.22% | | Adjusted EBITDA | $32,499 | $7,618 | +326.63% | Adjusted Operating Cost Ratio Reconciliation The Adjusted Operating Cost Ratio for Q2 2025 was 21.0%, an increase from 17.6% in Q2 2024, primarily due to changes in the impact of share-based compensation and held-for-sale operations, with the ratio also increasing to 20.1% from 17.1% for the six-month period Adjusted Operating Cost Ratio Reconciliation | Item | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------- | | Operating Cost Ratio | 21.5% | 31.1% | -9.6 pp | | Impact of share-based and other long-term incentive compensation expense | (1.0)% | (9.4)% | +8.4 pp | | Impact of held-for-sale operations | 0.0% | (3.7)% | +3.7 pp | | Impact of transaction related costs | 0.5% | (0.4)% | +0.9 pp | | Adjusted Operating Cost Ratio | 21.0% | 17.6% | +3.4 pp | | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :----------------------------- | :----------------------------- | :----------- | | Operating Cost Ratio | 22.0% | 29.1% | -7.1 pp | | Impact of share-based and other long-term incentive compensation expense | (1.8)% | (8.5)% | +6.7 pp | | Impact of held-for-sale operations | 0.0% | (3.1)% | +3.1 pp | | Impact of transaction related costs | (0.1)% | (0.4)% | +0.3 pp | | Adjusted Operating Cost Ratio | 20.1% | 17.1% | +3.0 pp |