Counterpart Health's Q1 2025: Unraveling Contradictions in Revenue Forecasts, SG&A Strategies, and Market Positioning

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MA Plan Growth and Financial Performance:
- Clover Health reported a 30% jump in MA membership, 33% growth in revenue, and a 279% increase in adjusted EBITDA year-over-year for Q1 2025.
- This growth was driven by a focus on getting people the right healthcare at the right time, reducing out-of-pocket costs, and delivering care to members' homes.

Financial Health and Cash Flow:
- Clover Health repurchased 5 million shares of common stock during the first quarter, completing the $80 million buyback program.
- Cash, cash equivalents, and investments totaled $391 million, with cash flow used in operating activities amounting to $16 million.
- The company expects to generate strong cash flow from operating activities for the full-year.

Insurance Revenue and Membership Growth:
- Insurance revenue grew by 34% year-over-year to $457 million, driven by a 30% Medicare Advantage membership growth.
- New member onboarding and engagement via Clover Assistant powered primary care contributed to strong management of new member cohorts.

Operational Efficiency and SG&A:
- Adjusted SG&A as a percentage of total revenue decreased to 18%, representing a 360 basis point improvement year-over-year.
- This operational leverage allowed for an increase in adjusted EBITDA and adjusted net income, reflecting the company's strong financial performance.

CMS Rate Notice and Future Growth Strategy:
- The recent CMS final rate notice for 2026 is expected to add to Clover Health's momentum, especially with the upcoming 4 Star PPO plan.
- The company anticipates a compounding favorable impact from the rate notice and improved 4 Star rating, contributing to the acceleration of growth in 2026 and beyond.