Alignment Healthcare's Q2 2025: Unpacking Contradictions in Utilization Trends, Risk Adjustments, and Financial Impact

Utilization trends and member engagement, risk adjustment sweep impact, Part D program impact on financials, provider relationships and utilization trends, impact of final risk adjustment sweeps on earnings are the key contradictions discussed in Alignment Healthcare's latest 2025Q2 earnings call.



Membership and Revenue Growth:
- Alignment Healthcare reported a health plan membership of 223,700 members, representing a 28% year-over-year growth, contributing to total revenue of $1 billion, which increased by 49% year-over-year.
- This growth was driven by strong health plan membership momentum and a year-over-year increase in Part D revenue PMPM.

Operational Efficiency and Profitability:
- The company delivered an adjusted gross profit of $135 million, reflecting a 76% year-over-year increase, improving medical expense management and inpatient admissions per 1,000 to the low-140s.
- This was underpinned by successful provider engagement and clinical initiatives, leading to an adjusted EBITDA of $46 million, surpassing the high end of guidance.

Star Ratings and Market Share:
- Alignment Healthcare maintained high star ratings and took share from incumbents, despite industry-wide declines in star ratings, demonstrating its ability to leverage competitive advantages into profitable growth.
- The introduction of V28 further accelerated the importance of capabilities in managing quality and cost efficiently, benefiting from the dislocation caused by star rating declines among large incumbents.

Investment in Technology and Infrastructure:
- The company is investing in administrative automation and care navigation to support long-term growth, with a focus on scaling repeatably and widening competitive advantages over competitors.
- By integrating core systems such as AVA with new platforms like Athena EHR and Facets, Alignment aims to enhance operational efficiency and clinical outcomes, which are expected to pay off in the coming years.