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Clover Health Shares Grow 12% after Posting Q2 Earnings and 229% Platform User Growth

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Shares of Clover Health Investments Corp. traded higher after the company reported Q2/21 financial results that included a 140% increase in YoY revenue.

Healthcare services provider Clover Health Investments Corp. (CLOV), which offers Medicare Advantage plans for American seniors, yesterday announced financial results for its second quarter ended June 30, 2021.

The company's CEO Vivek Garipalli stated, "Clover took another step in its journey to improve every life with the launch of Direct Contracting this past quarter. This milestone more than doubled our revenue and nearly doubled lives under Clover Assistant management. . .We have ambitious goals to maintain an aggressive growth trajectory while pursuing our mission to improve every life by making great healthcare available and affordable to all American seniors regardless of health, wealth or economic status."

Clover Health's President and CTO Andrew Toy commented, "The Clover Assistant continues to be a key differentiator which underpins our unique model. The Clover Assistant has approximately 95,000 lives under management and is on pace to manage over $1 billion of annualized revenue. Most importantly, we believe the Clover Assistant drives better outcomes for our members."

The company's CFO Joe Wagner discussed recent financial results at Clover and advised that revenue in Q2/21 increased by 139.7% to $412.5 million, compared to $172.1 million in Q2/20. Wagner noted the increase was due largely to its launch of direct contracting and added that based on results achieved in Q2/21, the firm is now operating at a $1.6 billion annual revenue run rate.

Clover listed that Q2/21 revenue included $195.4 million in Medicare Advantage (MA) premiums and $216.4 million in Direct Contracting (DC) revenue, compared to $170.3 million in MA premiums and no DC revenue in Q2/20.

The company advised that as of June 30, 2021, it had total lives under management of approximately 129,000, an increase of 126.3% over the number at the end of Q2/20. The Q2/21 total included 66,566 MA membership lives and 62,025 DC lives.

Clover incurred a GAAP net loss of $317.6 million in Q2/21, compared to a net income of $5.4 million in Q2/20.

The company stated that "its second quarter 2021 results were impacted by a non-cash loss of $134.5 million relating to the change in the fair value of its public and private placement warrants."

The firm further reported a non-GAAP adjusted EBITDA loss of $138.7 million and a non-GAAP, normalized adjusted EBITDA loss of $58.0 million, which it said reflects the impact from the COVID-19 pandemic.

The company stated that, as measured by lives under management, its Clover Assistant platform continues to grow, having increased around 229% year-over-year to approximately 95,000. The firm indicated that Clover Assist is now on pace to track and manage more than $1 billion in revenue on a 12-month basis.

The company offered some forward guidance and indicated the for FY/21 it expects total revenues will be in the range of $1.4-1.5 billion. The firm advised that these levels reflect estimated MA revenue of $760-790 million and Medicare Direct Contracting revenue of $650-700 million.

Clover stated it expects that by the end of December 2021, MA membership will grow by 17-21% year-over-year to somewhere between 68,000-70,000. The firm noted that for the Medicare DC program, the number of aligned beneficiaries will remain relatively flat for the rest of 2021 but is expected to increase significantly starting in January 2020.

The company indicated that for FY/21 it estimates that it will post a normalized Non-GAAP Adjusted EBITDA loss of between $210-250 million.

Clover Health is a next-generation Medicare Advantage (MA) insurer based in Nashville, Tenn. The company uses its "flagship" Clover's Assistant software platform to provide senior citizens in the U.S. with relevant and affordable health plans. The Clover platform provides doctors with personalized data-driven information at the point of care that helps improve clinical decision-making, resulting in better patient outcomes. The firm's plans are presently available to seniors enrolled in Medicare in 11 U.S. states. These plans may include coverage for hospitalizations, ER and doctor visits, and pharmacy coverage as well as coverage for dental, hearing and vision.

Clover Health has a market cap of around $3.3 billion with approximately 408.1 million shares outstanding. CLOV shares opened 17% higher today at $9.52 (+$1.39, +17.10%) over yesterday's $8.13 closing price. The stock has traded today between $8.58 to $9.65 per share and closed at $9.01 (+$0.88, +10.82%).


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