0001801170-26-000122
SEC filingRevenue surged 62% YoY to $749M driven by 51% membership growth, while net income swung to $27.3M from a loss.
For the three months ended March 31, 2026, Clover Health reported total revenues of $749.2 million, a 62.0% increase from $462.3 million in the same period of 2025. The growth was primarily driven by a 51% increase in average Medicare Advantage membership to 154,607, along with a higher star rating (4.0 vs. 3.5) for its PPO plans, which comprise the majority of members. Premiums earned, net rose 62.9% to $744.2 million, while other income declined 7.8% to $5.0 million due to a lower interest rate environment.
Net medical claims incurred increased 66.8% to $589.6 million, reflecting the membership growth. Consolidated Gross profit (non-GAAP) grew 46.5% to $159.5 million, though gross margin contracted to 21.3% from 23.6% in the prior year, as medical cost growth outpaced revenue growth. Operating expenses rose 55.7% to $721.9 million, driven by higher general and administrative expenses (+47.3%) tied to broker and professional fees from enrollment, partially offset by a 3.3% decline in salaries and benefits due to lower stock-based compensation.
The company swung to net income of $27.3 million from a net loss of $1.3 million in Q1 2025. Adjusted EBITDA increased 56.1% to $40.3 million, with PMPM Adjusted EBITDA improving to $87 from $84. Adjusted Net income rose to $39.7 million from $25.3 million.
Clover operates a single reportable segment: Insurance. The segment's premiums earned, net increased 62.9% to $744.2 million, driven by membership growth and improved star ratings. Insurance net medical claims incurred rose 65.8% to $610.0 million, resulting in an Insurance Benefits Expense Ratio (BER) of 86.5%, up from 86.1% in the prior year. The BER increase reflects higher medical costs partially offset by quality improvement investments ($34.0 million vs. $25.7 million). The company discontinued disclosure of Normalized BER starting Q1 2026.
Management did not provide explicit forward guidance but highlighted several strategic priorities: expanding physician networks, leveraging Clover Assistant (licensed as Counterpart Assistant) to improve chronic disease management, and maintaining wide network access through PPO plans. The company expects cash, cash equivalents, and investments ($418.2 million at March 31, 2026) along with projected cash flows to be sufficient for operating and regulatory requirements over the next 12 months. Key risks include potential need for additional equity or debt financing to support growth, regulatory constraints on dividend payments from insurance subsidiaries, and the impact of star rating changes on premium revenue. No material changes to financing arrangements or critical accounting policies were noted.
As of March 31, 2026, Clover Health held $173.3M in cash and cash equivalents and $244.9M in investment securities (including short-term investments), totaling $418.2M in liquid assets. Total assets were $697.7M, with shareholders' equity of $339.4M. The company has no debt, resulting in a strong net cash position.
No material purchase commitments or contractual obligations were disclosed in the notes. The only contingencies noted are ordinary course legal matters, none of which are expected to be material.
During Q1 2026, Clover Health did not repurchase any shares. Capital expenditures totaled $0.9M, primarily for property and equipment. No dividends were declared, and there were no debt issuances or repayments.
The company operates as a single reportable segment: Insurance. Segment gross profit increased 50.7% year-over-year to $134.2M, driven by a 62.9% rise in net premiums earned to $744.2M. Net medical claims incurred grew to $610.0M, reflecting the higher premium volume. Geographic mix is not disclosed.
In Q1 2027, Clover Health generated positive operating cash flow of $107.9 million, a significant turnaround from the $(16.3) million used in the same period last year. Net income of $27.3 million compared favorably to a net loss of $(1.3) million in the prior year, with non-cash stock-based compensation adding $12.3 million. The primary driver of CFO strength was a $107.2 million increase in unpaid claims (a working capital source), partially offset by a $65.3 million decrease in accrued retrospective premiums (a working capital use). Capex remained low at $0.9 million (0.8% of CFO), indicating minimal capital intensity. Free cash flow (CFO less capex) was approximately $107.0 million. No share repurchases or dividends were executed during the period, so FCF fully covered capital returns. The investing cash flow was negative $(5.1) million due to net purchases of short-term securities. Overall, cash and cash equivalents increased by $94.9 million, ending at $173.3 million. The improvement in operating cash flow reflects stronger core profitability and favorable working capital dynamics, though the large swing in unpaid claims warrants monitoring for sustainability.