Alignment Healthcare, Inc. (ALHC) Q4 2024 Earnings Call Transcript

For the period ending December 31, 2024

February 27, 2025 5:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good afternoon, and welcome to Alignment Healthcare's Fourth Quarter 2024 Earnings Conference Call and Webcast. [Operator Instructions]. Please note that this event is being recorded. Leading today's call are John Kao, Founder and CEO; and Thomas Freeman, Chief Financial Officer.

Before we begin, we would like to remind you that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks and uncertainties and reflect our current expectations based on beliefs, assumptions and information currently available to us.

Descriptions of some of the factors that could cause actual results to differ materially from these forward-looking statements are discussed in more detail in our filings with the SEC, including the Risk Factors section of our annual report on Form 10-K for the fiscal year ended December 31, 2024.

Although we believe our expectations are reasonable and undertake no obligation to revise any statements to reflect changes that occur after this call. In addition, please note that the company will be discussing certain non-GAAP financial measures that they believe are important in evaluating performance. Details on the relationship between these non-GAAP measures to the most current comparable GAAP measures and reconciliation of historical non-GAAP financial measures can be found in a press release that is posted on the company's website and in our Form 10-K for the fiscal year ended December 31, 2024.

I would now like to hand the call over to your speaker today, John Kao. Please go ahead.

John Kao

Hello, and thank you for joining us on our fourth quarter earnings conference call. For the fourth quarter 2024, our health plan membership of 189,100 concluded a milestone year where we grew membership approximately 59%. Our final result is more than 25,000 members above the high end of our initial guidance range and reflects an additional 21% growth relative to initial expectations.

As a result of our continued membership outperformance, total revenue of $701 million in the quarter grew approximately 51% year-over-year and 61% excluding ACO REACH.

In the fourth quarter, each of our key margin ratios improved year-over-year even as our membership growth accelerated beyond expectations. Adjusted gross profit of $88 million produced a consolidated MBR of 87.5%, a 200 basis point improvement year-over-year and 50 basis point improvement, excluding ACO REACH. Combined with substantial scale economies, we delivered adjusted EBITDA of positive $1 million in the quarter and 400 basis points of margin expansion year-over-year. For the full year, total revenue of $2.7 billion grew 48% year-over-year and 59% excluding ACO REACH. Adjusted gross profit of $303 million resulted in an MBR of 88.8%.