ALHC - Alignment Healthcare Reports Fourth Quarter and Full-Year 2023 Results; Provides Full-Year 2024 Financial Guidance | Benzinga
- Reports $1.82 billion in total revenue for full-year 2023 and 119,200 health plan members at year end, up 27.2% and 21.1% year-over-year respectively
- Records strong health plan membership growth after annual enrollment period, up 44% year-over-year as of Jan. 1
- Reiterates 2024 year-end health plan membership outlook of 162,000-164,000, representing 37% growth year-over-year, and adjusted EBITDA breakeven at the midpoint of the outlook ranges
ORANGE, Calif., Feb. 27, 2024 (GLOBE NEWSWIRE) -- Alignment Healthcare, Inc. (NASDAQ:ALHC), today reported financial results for its fourth quarter and full year ended Dec. 31, 2023.
"Alignment Healthcare is built to thrive in the current Medicare Advantage market with our clinical framework and data-driven operations," said John Kao, founder and CEO. "I am confident that the investments we have made to strengthen our visibility and control over medical costs and the member experience will continue to bolster growth in 2024 and beyond."
Fourth Quarter 2023 Financial Highlights
All comparisons, unless otherwise noted, are to the three months ended Dec. 31, 2022.
- Health plan membership at the end of the quarter was approximately 119,200, up 21.1% year over year
- Total revenue was $465.4 million, up 28.6% year over year
- Health plan premium revenue of $459.0 million represented 27.5% growth year over year
- Adjusted gross profit was $49.2 million and loss from operations was ($41.9) million
- Adjusted gross profit excludes depreciation and amortization of $5.9 million and selling, general, and administrative expenses of $83.7 million (which includes $14.1 million of equity-based compensation). Adjusted gross profit also excludes an additional $1.5 million of equity-based compensation recorded within medical expenses
- Medical benefits ratio based on adjusted gross profit was 89.4%
- Adjusted EBITDA was ($19.7) million and net loss was ($47.2) million
Full Year 2023 Financial Highlights
All comparisons, unless otherwise noted, are to the twelve months ended Dec. 31, 2022.
- Total revenue was $1,823.6 million, up 27.2% year over year
- Health plan premium revenue of $1,800.9 million represented 25.8% growth year over year
- Adjusted gross profit was $208.8 million and loss from operations was ($127.8) million
- Adjusted gross profit excludes depreciation and amortization of $21.7 million and selling, general, and administrative expenses of $307.4 million (which includes $59.3 million of equity-based compensation). Adjusted gross profit also excludes an additional $7.5 million of equity-based compensation recorded within medical expenses
- Medical benefits ratio based on adjusted gross profit was 88.5%
- Adjusted EBITDA was ($35.3) million and net loss was ($148.2) million
- As of Dec. 31, 2023, total cash was $202.9 million, and debt was $165.0 million (excluding unamortized debt issuance costs)
Adjusted Gross Profit is reconciled as follows:
| Three Months Ended December 31, |
| Year Ended December 31, |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| (dollars in thousands) |
| Loss from operations |
| $ |
| (41,913 |
| ) |
| $ |
| (52,106 |
| ) |
| $ |
| (127,817 |
| ) |
| $ |
| (128,639 |
| ) |
| Add back: |
| Equity-based compensation (medical expenses) |
| 1,517 |
| 2,377 |
| 7,541 |
| 9,128 |
| Depreciation (medical expenses) |
| 60 |
| 64 |
| 254 |
| 213 |
| Depreciation and amortization |
| 5,801 |
| 4,687 |
| 21,414 |
| 17,273 |
| Selling, general, and administrative expenses |
| 83,737 |
| 83,228 |
| 307,433 |
| 295,646 |
| Total add back |
| 91,115 |
| 90,356 |
| 336,642 |
| 322,260 |
| Adjusted gross profit |
| $ |
| 49,202 |
| $ |
| 38,250 |
| $ |
| 208,825 |
| $ |
| 193,621 |
| Medical benefit ratio |
| 89.4 |
| % |
| 89.4 |
| % |
| 88.5 |
| % |
| 86.5 |
| % |
Adjusted EBITDA is reconciled as follows:
| Three Months Ended December 31, |
| Year Ended December 31, |
| 2023 |
| 2022 |
| 2023 |
| 2022 |
| (dollars in thousands) |
| Net loss |
| $ |
| (47,231 |
| ) |
| $ |
| (56,995 |
| ) |
| $ |
| (148,173 |
| ) |
| $ |
| (149,639 |
| ) |
| Less: Net loss attributable to noncontrolling interest |
| 22 |
| 92 |
| 156 |
| 92 |
| Adjustments: |
| Interest expense |
| 5,484 |
| 4,793 |
| 21,231 |
| 18,289 |
| Depreciation and amortization |
| 5,861 |
| 4,751 |
| 21,668 |
| 17,486 |
| Income taxes |
| (24 |
| ) |
| 172 |
| (22 |
| ) |
| 339 |
| Equity-based compensation(1) |
| 15,652 |
| 22,885 |
| 66,835 |
| 81,718 |
| Transaction-related expenses(2) |
| — |
| — |
| — |
| 579 |
| Acquisition expenses(3) |
| 216 |
| 548 |
| 977 |
| 1,614 |
| Litigation costs and settlement (4) |
| 348 |
| — |
| 2,298 |
| — |
| (Gain) loss on right of use assets (5) |
| — |
| 102 |
| (289 |
| ) |
| 611 |
| Loss on extinguishment of debt |
| — |
| — |
| — |
| 2,196 |
| Adjusted EBITDA |
| $ |
| (19,672 |
| ) |
| $ |
| (23,652 |
| ) |
| $ |
| (35,319 |
| ) |
| $ |
| (26,715 |
| ) |
| (1) |
| Represents equity-based compensation related to grants made in the applicable year, as well as equity-based compensation related to the timing of the IPO, which includes previously issued stock appreciation rights ("SARs") liability awards, modifications related to transaction vesting units, and grants made in conjunction with the IPO. |
| (2) |
| Represents legal, professional, accounting and other advisory fees related to a secondary offering that are considered nonrecurring and non-capitalizable. |
| (3) |
| Represents acquisition-related fees, such as legal and advisory fees, that are non-capitalizable. |
| (4) |
| Represents litigation costs considered outside of the ordinary course of business based on the following considerations which we assess regularly: (i) the frequency of similar cases that have been brought to date, or are expected to be brought within two years, (ii) complexity of the case, (iii) nature of the remedies sought, (iv) litigation posture of the Company, (v) counterparty involved, and (vi) the Company's overall litigation strategy. This includes (a) $0.1 million in legal fees and a $0.9 million reserve for settlement related to a wage and hour class action lawsuit and (b) $1.1 million in legal fees related to legal action initiated by the Company seeking injunctive relief prohibiting member solicitation in violation of CMS regulations. Refer to Note 12, "Commitments and Contingencies" in our consolidated financial statements for more information regarding certain related litigation. |
| (5) |
| Represents gain or loss related to right of use (‘ROU") assets that were terminated or subleased in the respective period. |
Outlook for First Quarter and Fiscal Year 2024
| Three Months Ending March 31, 2024 |
| Twelve Months Ending December 31, 2024 |
| $ Millions |
| Low |
| High |
| Low |
| High |
| Health Plan Membership |
| 157,000 |
| 159,000 |
| 162,000 |
| 164,000 |
| Revenue |
| $590 |
| $600 |