Oscar(US:OSCR)2024-11-09 17:00Financial Data and Key Metrics Changes - The company reported revenue of $2.4 billion for Q3 2024, representing a 68% increase year-over-year [8] - The medical loss ratio (MLR) increased by 80 basis points to 84.6% [8][25] - Year-to-date adjusted EBITDA reached $312 million, a $246 million increase year-over-year [8] - The company achieved a year-to-date profit of $179 million, a $300 million improvement over the same period last year [9] Business Line Data and Key Metrics Changes - Membership grew to approximately 1.65 million, a 68% increase year-over-year, with over 73,000 new members added in the quarter [10][24] - The company expects MLR performance of Special Enrollment Period (SEP) members to be a tailwind in 2025 [11] - The third quarter SG&A expense ratio improved by approximately 360 basis points year-over-year to 19% [27] Market Data and Key Metrics Changes - The company anticipates double-digit growth in the ACA market through the 2025 open enrollment period [13] - The average rate increase for the company is approximately 6%, compared to 7% for the overall market [14] Company Strategy and Development Direction - The company aims for at least 20% revenue CAGR and a 5% operating margin by 2027 [10] - New product launches include a multi-condition plan, a tech-first HMO, and a Spanish-first solution, Buena Salud [15][16][17] - The company is focusing on expanding its total addressable lives to approximately 11 million, an increase of 700,000 lives year-over-year [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory and the stability of the market [21] - The company believes that the ACA will continue to provide value across political lines, emphasizing the importance of consumer choice and affordability [22] - Management highlighted the importance of technology in optimizing operations and enhancing member experiences [12] Other Important Information - The company raised its full-year revenue guidance by $200 million to a range of $9.2 billion to $9.3 billion [30] - The company expects to achieve net income profitability this year, marking an important milestone [32] Q&A Session Summary Question: Competitive positioning for 2025 - Management noted that the market is largely rational and stable, with their average rate increase at 6% compared to the market's 7% [35] Question: SEP pressure and its impact - Management indicated that they had more SEP additions than anticipated, which positively impacted top-line revenue [37] Question: Long-term growth guidance - Management confirmed that the long-term guidance of 20% CAGR remains unchanged despite the higher revenue base [40] Question: Risk adjustment practices - Management explained that risk adjustment is complex but has been stable due to strong modeling practices [47] Question: Industry growth expectations - Management continues to expect double-digit growth in the ACA market, driven by Medicaid redeterminations and enhanced subsidies [54]