Alignment Healthcare achieved its first year of positive adjusted EBITDA as a company, the insurer announced on release of its fourth-quarter earnings results.
The insurer ended the year with 189,100 members, up more than 58% year over year, and the company' stock is up more than 14% today. Alignment now has nearly 210,000 members as of Jan. 1.
“Our exceptional results in 2024 highlight our differentiated ability to navigate a dynamic Medicare Advantage environment and demonstrate that plans can win by providing more care, not less,” said CEO John Kao during a call to investors.
The company posted a net loss again at $31 million and had a medical benefits ratio of 87.5%. It narrowly beat its quarterly EPS estimates and pushed past revenue expectations by 3.58% at $701 million, according to Zacks Investment Research. Last quarter, the company announced a $26 million net loss.
In 2025, Alignment is aiming to have more members than previously expected, somewhere in the range of between 227,00 and 233,000 members. The insurer saw 28% membership growth in California and has more than 10,000 members in Nevada.
Alignment foresees 2025 revenue exceeding $3.27 billion, more than a one-third increase. The company expects to see an adjusted gross profit of $415 million to $445 million next year.
Kao said 100% of its California members are in plans rated four stars or better for the 2026 payment year. A regulatory change, the introduction of the health equity index, is expected to be a positive development for the company, he said.
“Based on our early analysis, we believe we could achieve a star score bonus of 0.25 or greater under the new health equity index,” he said.
The company expects gross profit will grow from $90 per member per month to $230 once newer at-risk members are retained over the long term. As such, gross profit could increase by $600 million.
“Beyond our strong membership growth, our revenue outlook is supported by increases to our Part D revenue per member per month due to changes related to the Inflation Reduction Act, and the retention of our 2024 new member cohort, partially offset by the impact of the second phase of the V28 risk model changes,” said Chief Financial Officer Thomas Freeman.
Alignment did “modestly trim” its benefits for next year, he added.
Editor's Note: The story has been updated to correctly reflect Alignment's current membership and star ratings performance.