Alignment Healthcare, Inc. Q1 FY2025 earnings call

• Strong first quarter results with 32% YOY membership growth and 47% YOY revenue growth. - Adjusted gross profit and EBITDA exceeded guidance. - Scaled clinical model across enterprise, including ex-California markets where membership more than doubled YOY. - Inpatient admissions per 1,000 outperformed expectations in both California and ex-California. - Business model combines health plan product control, technology platform insights, care delivery expertise, and member experience. - Raising midpoint of guidance ranges for key metrics. - Thomas Freeman stepping down as CFO, with Jim Head to succeed him.

For the first quarter 2025, Alignment Healthcare's health plan membership was 217,500 members, representing approximately 32% year-over-year growth. Total revenue reached $927 million, a 47% year-over-year increase. Adjusted gross profit was $107 million, growing 87% year-over-year, resulting in a consolidated MBR of 88.4%, a 250 basis point improvement versus the prior year. Adjusted EBITDA was $20 million, showing 410 basis points of margin expansion year-over-year and exceeding the high-end of the first quarter guidance.

• Second quarter guidance: Membership 220,000-222,000, revenue $950M-$965M, adjusted gross profit $105M-$113M, adjusted EBITDA $10M-$18M. - Full-year 2025 guidance: Membership 228,000-233,000, revenue $3.77B-$3.815B, adjusted gross profit $420M-$445M, adjusted EBITDA $38M-$60M. - Raising midpoint of guidance ranges across key metrics. - Expect continued stability in inpatient admissions, Part D gross margin reversal in later quarters, investment in member engagement, and SG&A ratio improvement.

• Forward-looking statements subject to risks and uncertainties discussed in SEC filings. - Potential impact of regulatory changes, pharmacy utilization, and competitive dynamics.

Q: Ryan Daniels asks about working with duals and patients with multiple chronic conditions, and potential M&A activity.

A: John Kao responds about care management capability and plans to expand into new markets.

Q: Michael Ha inquires about MLR outperformance and Part D impact.

A: Thomas Freeman explains early favorability in Part D and other factors contributing to outperformance.

Q: John Ransom asks about AVA’s evolution and patient engagement.

A: John Kao discusses AVA’s stratification model and continuous improvement efforts.

Q: Whit Mayo asks about RAF visibility and star initiatives.

A: Thomas Freeman talks about RAF visibility and John Kao mentions core operations for star performance.

Q: Jessica Tassan asks about competitive landscape in California and provider contracts.

A: John Kao and Thomas Freeman discuss competitive position and provider contract alignment.

Q: Matthew Gillmor asks about utilization normalization and other categories.

A: Thomas Freeman comments on utilization trends and inpatient KPI as a leading indicator.

Q: Jonathan Yong asks about prior authorization and CMS initiatives.

A: Thomas Freeman discusses the company’s approach to care and UMOF rates.

Q: Ryan Langston asks about EBITDA release and 2026 rates.

A: Thomas Freeman explains EBITDA release drivers and 2026 rate expectations.

Q: Andrew Mok asks about Part D seasonality and trends.

A: Thomas Freeman discusses Part D seasonality and revenue PMPM factors