Alignment Healthcare(ALHC) - 2024 Q2 - Quarterly Report

Financial Performance - Total revenues for Q2 2024 reached $681.3 million, a 47.3% increase from $462.4 million in Q2 2023[20] - Earned premiums for Q2 2024 were $674.1 million, up 47.5% from $456.9 million in Q2 2023[20] - Medical expenses for Q2 2024 totaled $605.3 million, representing a 47.3% increase compared to $410.6 million in Q2 2023[20] - The net loss for Q2 2024 was $24.0 million, slightly improved from a net loss of $28.5 million in Q2 2023[20] - Adjusted EBITDA for the three months ended June 30, 2024, was $6,034,000, a significant improvement of 393.6% from a loss of $2,055,000 in the same period of 2023[157] - The loss from operations for the three months ended June 30, 2024, was $18,382,000, a 22.3% improvement from a loss of $23,659,000 in the same period of 2023[157] - Net cash provided by operating activities for the six months ended June 30, 2024, was $17,291,000, a significant decrease from $122,287,000 for the same period in 2023[33] - The company recorded a net change in cash of $136.1 million for the six months ended June 30, 2024, compared to a decrease of $14.3 million for the same period in 2023[196] Assets and Liabilities - Total current assets increased to $599.1 million as of June 30, 2024, compared to $483.5 million at December 31, 2023, reflecting a 23.9% growth[18] - Total liabilities rose to $591.5 million as of June 30, 2024, up from $433.8 million at December 31, 2023, indicating a 36.3% increase[18] - The company reported a total stockholders' equity of $124.8 million as of June 30, 2024, down from $158.1 million at December 31, 2023[18] - The company’s total assets as of June 30, 2024, were $1,074,303,000, compared to $1,007,794,000 as of June 30, 2023, reflecting an increase of approximately 6.6%[29] Membership and Market Expansion - Health plan membership increased to 175,100 as of June 30, 2024, representing a 56.1% growth compared to 112,200 in the same period of 2023[157] - The company expanded into 14 new markets in 2023 and one new market in California in 2024, focusing on areas with significant senior populations[148] - The company holds a 4% market share in its existing 53 counties, indicating significant growth opportunities in the Medicare Advantage market[147] Expenses - Selling, general, and administrative expenses for Q2 2024 were $87.9 million, a 25.3% increase from $70.2 million in Q2 2023[20] - Medical expenses payable rose to $315,369 million as of June 30, 2024, up from $205,399 million as of December 31, 2023, indicating a 53.5% increase[99] - Total medical expenses incurred for the current year reached $407,156 million, compared to $235,027 million for the same period in 2023, representing a growth of 73%[102] Cash Flow and Financing - Cash and cash equivalents at the end of the period on June 30, 2024, were $341,069,000, down from $397,008,000 at the end of June 30, 2023, indicating a decrease of approximately 14.1%[35] - The company expects to require additional capital resources to execute strategic initiatives for growth, including technology development and market expansion[185][186] - The company had the option to borrow an additional $35.0 million in undrawn Delayed Draw Term Loans, which expires on September 1, 2025[190] Regulatory Compliance and Risks - The company was in compliance with the minimum capital requirements prescribed by regulatory authorities as of June 30, 2024[132] - The company continues to monitor changes in ownership that could affect the utilization of its substantial NOLs under IRC Section 382[116] Technology and Future Outlook - The company aims to leverage its proprietary technology platform, AVA, to enhance member relationships and care quality, which is expected to drive future performance[146] - The company plans to continue investing in its AVA platform and pursue strategic acquisitions to maintain a differentiated value proposition[153] Other Financial Metrics - The company reported a provision for credit loss of $95,000 for the six months ended June 30, 2024, compared to $51,000 for the same period in 2023, showing an increase of approximately 86.3%[33] - The company recognized a favorable prior year development of $2,460 million for the three months ended June 30, 2024, primarily due to better-than-expected claims recoveries[102]