Alignment Healthcare (ALHC) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $926.9 million, up 47.5% year-over-year, with Medicare Advantage membership growing 31.7% to 217,500 members, surpassing high-end guidance for all four key metrics.

• Adjusted EBITDA improved to $20.2 million from negative $12.0 million, with margin expansion and net loss narrowing to $9.4 million from $46.6 million.

• Medical benefits ratio improved to 88.4% from 90.9% year-over-year, reflecting better cost management.

• Leadership transition: CFO Thomas Freeman stepping down, succeeded by Jim Head.

• Continued investment in technology, market expansion, and member experience to drive long-term growth.

Financial highlights

• Earned premiums rose 47.7% to $918.0 million, with total revenue at $926.9 million and adjusted gross profit at $107.2 million, up 87% year-over-year.

• Adjusted EBITDA was $20.2 million, with SG&A expenses at $103.8 million and adjusted SG&A of $87 million (9.4% of revenue), down 160 basis points year-over-year.

• Cash, cash equivalents, and investments at quarter end totaled $480 million.

• Operating cash flow was $16.6 million, up from negative $6.2 million in the prior year period.

• Depreciation and amortization expense was $7.6 million, including a $0.6 million goodwill impairment.

Outlook and guidance

• Q2 2025 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.

• Raised midpoint of guidance across all four key metrics.

• Expect continued stability in inpatient admissions per thousand and prudent stance on pharmacy utilization.

• Seasonality expected to moderate due to Medicare Part D benefit redesign under the Inflation Reduction Act.