Clover Health Investments Q2 Earnings Call Highlights

Key Points

• Clover Health reported strong second-quarter results: Medicare Advantage membership rose 48% year over year to 157,000, while revenue grew 56% to $743 million. The company generated $41 million in adjusted EBITDA, $28 million in GAAP net income and ended the quarter with $443 million in cash and investments and no debt.
• The company raised its full-year 2026 outlook for membership, revenue, gross profit, adjusted EBITDA and GAAP net income, citing continued execution and improving operating leverage. Management expects positive adjusted EBITDA in the third quarter but a seasonally typical loss in the fourth quarter.
• Management highlighted improving member economics and a 4.5-star rating for 2027: Older cohorts are becoming more profitable, medical-cost trends are favorable, and all members are enrolled in plans rated 4.5 stars for the 2027 payment year, though CMS plans to appeal the related court decision.

Clover Health Investments NASDAQ: CLOV reported second-quarter results that showed continued Medicare Advantage membership growth alongside profitability, while raising its full-year 2026 outlook across its key financial measures.

Chief Executive Officer Andrew Toy said the company views its Clover Assistant technology as the foundation of its clinical and financial strategy. The platform is designed to help physicians make care decisions using a more complete view of each patient, which Clover said can support earlier disease identification and more consistent management of chronic conditions.

For the first half of 2026, Clover said Medicare Advantage membership grew 48% year over year, total revenue rose by more than $550 million to $1.5 billion, and GAAP net income increased by $67 million from the prior-year period. Consolidated gross profit increased by $104 million, while operating leverage improved by more than 200 basis points, according to Toy.

Second-Quarter Financial Performance

Interim Chief Financial Officer Clay Thornton said average Medicare Advantage membership reached 157,000 in the second quarter, up 48% from a year earlier. Revenue increased 56% year over year to $743 million.

Consolidated gross profit totaled $153 million, representing 54% growth from the same quarter last year. Adjusted selling, general and administrative expenses were $112 million, or 15% of revenue, an improvement of about 220 basis points from the second quarter of 2025.

The company generated adjusted EBITDA of $41 million and GAAP net income of $28 million during the quarter. Through the first six months of 2026, Clover generated $81 million in adjusted EBITDA and $55 million in GAAP net income.

Clover ended the quarter with $443 million in cash and investments and no debt outstanding. Cash flow from operations totaled $133 million through the first half, which Thornton said supports the company’s ability to self-fund future growth.

Higher 2026 Outlook

Following its first-half performance, Clover raised its full-year 2026 guidance. The updated outlook calls for:

• Average Medicare Advantage membership of 156,000 to 158,000;
• Total revenue of $2.92 billion to $3 billion;
• Consolidated gross profit of $525 million to $555 million;
• Adjusted EBITDA of $70 million to $85 million; and
• GAAP net income of $20 million to $35 million.

Thornton said the outlook reflects confidence in the underlying business after six months of execution, though management is maintaining discipline because a large share of membership remains early in its care cycle and additional claims experience is still expected to emerge during the year.

The company expects gross profit to be stronger in the third quarter than in the fourth quarter because of typical Medicare Advantage seasonality. It also expects fourth-quarter investments to rise, including activities related to the annual enrollment period. Clover expects adjusted EBITDA to remain positive in the third quarter before returning to a seasonally typical loss in the fourth quarter.

Cohort Maturation and Medical-Cost Trends

Management emphasized that it expects member cohorts to become more profitable as they spend more time under the company’s care model. Toy said Clover has historically seen cohorts improve by approximately $70 per member per month in gross profit as they move from their first year to their second year.

The company said its 2025 members, which represented about 21% of current membership, are now in their second year and showing stronger economics than in their first year. Members who joined in 2026 represented about 28% of membership and are following the expected early-stage pattern, Thornton said.

Clover said its 2025 cohort is expected to enter its third year in 2027, while the 2026 cohort will enter year two. Thornton said this progression is central to management’s confidence in 2027, although the company did not issue formal guidance for that year.

Medical-cost trends have also performed better than expected, according to Thornton. Inpatient utilization remained favorable, including among first-year members, while outpatient trends peaked in March and moderated during the second quarter. Outpatient utilization remained elevated relative to prior years but was within the company’s expectations.

Management also cited improved dental-cost performance following changes to out-of-network dental claims management, as well as better-than-expected Part D performance during the first half.

Four-and-a-Half-Star Rating and 2027 Plans

Toy said that following a court order and a subsequent recalculation by the Centers for Medicare & Medicaid Services, all of Clover’s Medicare Advantage members are enrolled in plans rated 4.5 stars for payment year 2027. CMS has filed notice that it intends to appeal the District Court decision.

Toy said the higher rating provides added flexibility to reinvest in members, maintain a competitive product, support growth and expand profitability. However, he said the rating does not create the company’s underlying economics, which management attributes to Clover Assistant-driven cohort maturation.

The company said it bid for 2027 based on the 4.5-star payment year and expects to be paid at that rating next year. Thornton said Clover’s approach to 2027 bidding remained consistent with the prior two years: offering a product it believes can grow profitably. Management also said it assumed continued competitive disruption in its core New Jersey and Georgia markets.

Looking further ahead, Toy said Clover is expanding its use of artificial intelligence beyond clinical decision support into insurance operations. He said the company believes AI can improve claims-processing speed and accuracy, support members and lower administrative overhead over time.

About Clover Health Investments (NASDAQ:CLOV)

Clover Health Investments is a technology-driven healthcare company specializing in Medicare Advantage plans for senior populations. The company combines insurance coverage with a proprietary software platform to improve care coordination, outcomes tracking and cost management. By leveraging data analytics, Clover Health aims to deliver personalized care pathways and preventive interventions for its members.

At the core of Clover's offering is its Clover Assistant platform, which aggregates clinical and claims data from multiple sources to create real-time insights for physicians and care teams.

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