Clover Health (CLOV), a technology-driven healthcare company, reported a profitable first quarter of 2024 on an adjusted EBITDA basis and has raised its guidance for the full year, signaling confidence in its business model and financial health.
The company's insurance revenue increased by 8% year-over-year, and it has authorized a share repurchase program of up to $20 million. With a strong liquidity position and a focus on chronic disease management, Clover Health is well-positioned to navigate upcoming industry changes and maintain growth.
Key Takeaways
- Achieved profitability on an adjusted EBITDA basis in Q1 2024.
- Insurance revenue grew by 8% year-over-year to $342 million.
- Medical cost ratio (MCR) improved to 77.9% from 86.6% in Q1 2023.
- Adjusted SG&A expenses were reduced by 12% year-over-year to $75 million.
- Clover Health's cash position is expected to be breakeven or slightly positive for the full year.
- Total liquidity is projected to be between $388 million and $408 million at the end of 2024.
- Share repurchase program of up to $20 million authorized over the next two years.
- Plans to release new Clover Assistant features and enhance home care capabilities.
Company Outlook
- Clover Health expects to maintain adjusted EBITDA profitability for the full year 2024.
- The company anticipates a favorable EBITDA progression in Q2 and a less favorable progression in Q4.
- Insurance revenue guidance for the year has been raised.
- New calculation method for Benefit Expense Ratio (BER) to be provided for better historical comparison.
- Clover Health is exploring opportunities to offer its platform and services to third parties.
Bearish Highlights
- The company is preparing for less favorable EBITDA progression in Q4.
- Upcoming industry changes, such as HCC V28 coding rules and IRA changes to Part D, pose potential challenges.
Bullish Highlights
- Strong liquidity position with sufficient capital for operating and growth needs.
- Improved guidance for insurance revenue and adjusted EBITDA for full year 2024.
- Continued focus on operational optimization and spend management to drive SG&A efficiencies.
Misses
- No significant misses were reported during the earnings call.
Q&A Highlights
- Clover Health's representative, Andrew Toy, discussed the utilization of the Clover Assistant platform by providers to improve clinical capabilities and facilitate value-based care.
- The emergence of an affiliate in New Jersey was mentioned, aiming to deliver quality care through technology and services.
- The company is considering expanding its capabilities to third parties in the future.
Clover Health's first quarter of 2024 sets a positive tone for the company's financial trajectory. With a strategic focus on chronic disease management and the integration of technology in care delivery, the company remains optimistic about its ability to lead in the Medicare Advantage space.
The planned enhancements to the Clover Assistant platform and home care capabilities, along with a disciplined approach to revenue growth, suggest a commitment to innovation and efficiency that could benefit both providers and patients in the evolving healthcare landscape.
InvestingPro Insights
Clover Health (CLOV) has shown a dynamic financial landscape in the first quarter of 2024, underscored by a strategic share repurchase initiative and a fortified insurance revenue stream. Delving into the real-time data and "InvestingPro Tips" provides a deeper understanding of the company's current market position and future potential.
The company's aggressive share buyback activity, as revealed by an "InvestingPro Tip," signals a robust confidence from management in the intrinsic value of the company. This aligns with the authorization of a $20 million share repurchase program, reflecting a proactive approach to capital management that could bolster shareholder value.
Another key "InvestingPro Tip" highlights Clover Health's solid balance sheet, with cash reserves outweighing debt obligations. This financial stability is crucial as the company navigates through the competitive healthcare sector and aims to capitalize on growth opportunities.
From the "InvestingPro Data," three metrics stand out:
- Market Cap (Adjusted): $366.89M USD, indicating the company's size and market valuation.
- Revenue Growth (Quarterly) for Q1 2024: A significant decline of -44.31% year-over-year, which contrasts with the reported insurance revenue increase and may warrant investor attention.
- Price Total Return over the last week: An impressive 15.12%, suggesting recent investor optimism and potential market reevaluation of the company's prospects.
It's worth noting that while Clover Health is experiencing considerable stock price volatility, as indicated by another "InvestingPro Tip," the company's strategic decisions and market performance have the potential to stabilize and drive long-term growth.
For readers looking to explore further "InvestingPro Tips" and gain additional insights into Clover Health's financial health and market prospects, there are 9 more tips available on InvestingPro. Utilize coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and uncover comprehensive analytics and expert perspectives that can inform your investment decisions.
Full transcript - Social Capital Hedosophia Hold III (CLOV) Q1 2024:
Operator: Ladies and gentlemen, good afternoon and welcome to the Clover Health First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow prepared remarks. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the call over to Ryan Schmidt, Investor Relations for Clover Health. Please go ahead, sir.
Ryan Schmidt: Good afternoon, everyone. Joining me on our call today to discuss the company's first quarter 2024 results are Andrew Toy, Clover Health's Chief Executive Officer; and Terry Ronan, the company's Interim Chief Financial Officer. You can find today's press release and the accompanying supplemental slides in the Investor Events and Presentations section of our website at investors.cloverhealth.com. This webcast is being recorded, and a replay will be available in the Investor Relations section of the Clover Health website. I'd also like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties, including expectations about future performance. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including in the Risk Factors section of our most recent annual report on Form 10-K and other SEC filings. Information about non-GAAP financial measures referenced, including a reconciliation of those measures to GAAP measures, can be found in the earnings materials available on our website. With that, I'll now turn the call over to Andrew.
Andrew Toy: Thank you, Ryan. Clover is off to a strong start to 2024, and I’m very excited to share our results and improved full year guidance with you all today. Overall, first quarter insurance revenue and adjusted EBITDA performance exceeded our expectations. We believe this is evidence that our strategy and strong fundamentals of preparing us well for the future of the Medicare Advantage program. Let's begin with the overarching themes of our results today. Firstly, Clover was profitable in Q1 on an adjusted EBITDA basis and we also have high confidence in achieving full year 2024 adjusted EBITDA profitability. Secondly, we have grown revenues in our profitable insurance business by 8% year-over-year. Thirdly, given our favorable business outlook, we feel very comfortable in our strong liquidity position, and we maintain our view that Clover has sufficient capital for our operating and growth needs. As such, we are pleased to announce that our Board of Directors has authorized a share repurchase program of up to $20 million of the company's Class A common stock over the next 2 years. Fourthly, we believe our strong performance continues to highlight our unique ability to operate a profitable Medicare Advantage plan on a wide network PPO chassis, powered by our clearly differentiated care model, leveraging Clover Assistant patented technology, and Clover Home Care's high touch clinical capabilities. Next, I'd like to give more color on our core profitability metric, adjusted EBITDA. During the first quarter of 2024, we delivered $7 million of positive adjusted EBITDA. We expect this momentum to continue and feel very confident that we will deliver full year adjusted EBITDA profitability. We have therefore, significantly improved our guidance for the full year 2024 to a range of positive $10 million to $30 million. Our profitability performance was driven by continued outperformance in our insurance offering fundamentals, including revenue growth and Medic management, as well as durable reductions in our adjusted SG&A. For insurance revenue, we are proud that we delivered strong year-over-year revenue growth of 8%, while also simultaneously expanding margins. This is a continued step forward in our commitment to grow revenues in a sustainable way. Improvements came from a strong focus on Clover Assistant product advancement, operational enhancements to improve the accuracy of our risk adjustment submissions, and a focus on member retention. We're proud of these improvements. And as a result, we are also raising our full year insurance revenue guidance to be between $1.3 billion and $1.35 billion. In addition, given our software centric approach, we strongly believe that we are well-positioned to move with agility against the backdrop of industry headwinds, including a lower MA [ph] rate environments, and the continued phase in of the new HCC V28 coding rules to sustain insurance revenue growth in the years to come. Going into more detail on the HCC V28 model changes, we feel good about our current and go-forward posture. We have three reasons for this. Firstly, Clover Assistant has always been focused on chronic disease management and treatment with accurate risk adjustment coming as a byproduct. As a result, we support CMS focus on removing codes that may not reflect current costs associated with diseases, conditions and demographics. Secondly, we are always launching new features for Clover Assistant, many based on feedback from our clinician users, and many using advancements in ML and AI. And these enhancements are constantly furthering our mission of early disease identification and management. Thirdly, we believe that long-term we'll see continuous improvements in outcomes, much like those detailed in our Clover Assistant white papers. For example, a year ago, our CKD white paper showed CA usage was associated with the early detection and management of CKD with an average GFR of 52.6 at diagnosis. Extending the study through April 2023, that average GFR has improved to 55, meaning CKD is now identified even earlier. The original study indicated CA use was associated with diagnosing CKD around 17 months earlier, but the updated data extend that to around 23 months earlier. We are excited about this progress and encourage you to review our CKD paper and other CA white papers on our Investor Relations website. Overall, we feel confident that our approach not only helps us lessen the impact of these market headwinds that are affecting our competitors, but we feel we are well aligned with the spirit of CMS changes and have already mitigated the eventual impact of HCC V28 via Clover Assistant. Let's turn now to medical expenses. You will recall that during our Q4 '23 earnings, we indicated that unlike other industry participants, we did not believe we were seeing any increased utilization trend. We continue to hold this view as during the early part of Q1 '24, our 2023 claims experience developed quite favorably against prior expectations at year end 2023. When accounting for that favorable base period development for our 2024 forecast, we now have significant confidence in our ability to deliver 2024 results above our previously issued guidance. That said, we are currently holding a significant amount of IBNR related to early claims volume in the first quarter of 2024, primarily as a result of two factors. First, as we completed the transition of our claims processing systems to our new MA plant operational ecosystem during Q1 2024, we've been extremely diligent with claims adjudication to ensure claims are being processed and paid accurately. As such, this resulted in a slowdown in payments and an increase to claims inventory at the end of the quarter. Also, during the course of this internal implementation, we experienced the unexpected industry wide impact of the change health care cyber attack that directly impacted us as we relied on change health care as our primary claims clearinghouse. We quickly pivoted to allow our providers to submit claims through ultimate pathways, but claims receipt volume and processing volume remained very low during the second half of Q1. As a result of this, we've included a conservative buffer in our reserving. We have actively monitored this throughout the second quarter and are pleased to say that claim submissions are returning to normal and we expect our IBNR and claims inventory to normalize over the next few quarters. When accounting for the favorable development in our base [ph] 2023 claims experience, coupled with favorable revenue development, we are improving our 2024 MCR guidance to be within a range of 79% to 81%. That said, our historic MCR has been calculated purely on medical, pharmacy and supplemental benefit expenses, whereas industry standard for Medicare Advantage is generally to also include quality improvement costs in the loss ratio calculation. This is particularly important for Clover, as we invest heavily in health care quality via our technology and services, as well as clinically focused member awards. As such, to further improve transparency in our disclosures, in the future, we intend to also share a new calculation that aligns better with industry standard and includes these other costs in the numerator that we refer to as the benefits expense ratio or BER. While we are not providing the BER this quarter, we expect this to be in the low to mid 80s for the year, given the significant investments we make in quality. I would also note that these costs are currently included in our SG&A, so the BER metric would not affect our adjusted EBITDA calculation, but instead provide a better clarity into our performance versus industry peers. Given the strong business momentum, I'd like to summarize the improved 2024 guidance we are issuing today. Revenue for the insurance line of business to be between $1.3 billion and $1.35 billion, insurance MCR to be within a range of 79% to 81%, adjusted SG&A to be between $270 million and $280 million. Full year 2024 adjusted EBITDA profitability between positive $10 million to $30 million. We'd also like to clarify the effect of this improved business performance on our cash position and would direct you to Slide 14 of our supplemental slides as a reference. First off, we expect to be breakeven or be slightly positive in our cash flow from operating activities will the full year 2024, excluding the impact from discontinued operations. As a reminder, last year, we announced that we are no longer participating in the ACO Reach program as of January 1, 2024. And as of that date, it is being treated as discontinued operations in our reporting. That said, we expect to pay CMS around $39 million in the second half of 2024 relating to our prior ACO Reach participation, which is fully accrued as of March 31, 2024. We estimate our year end 2024 total restricted and unrestricted cash, cash equivalents and investments to be between $388 million to $408 million. As a reminder, we ended 2023 with unregulated liquidity of $137 billion as well as an incremental $74 million of capital and surplus in excess of minimum risk based capital requirements. This equates to a pro forma year end 2023 unregulated liquidity of $211 million. On the same basis, we expect pro forma year-end 2024 unregulated liquidity of between $145 million to $165 million. Overall, I believe Clover is very well-positioned to succeed and both 2024 as well as into 2025 and beyond. Our strategy was historically seen as unusual, is now arguably generating significantly better financial and clinical results than the traditional incumbents, and in a way that is sustainably differentiated. I'd like to thank the Clove team who has worked very hard to deliver a profitable first quarter on an adjusted EBITDA basis and position as well to build upon this and achieve adjusted EBITDA profitability for the full year 2024, a goal we have been working towards for several years now. I'm incredibly grateful and proud to be a Cloverite. Finally, I'm happy to announce that we've strengthened our leadership team this past quarter, as we've hired Peter Kuipers as our permanent CFO. He's officially joining the Clover team as CFO this week, so we spared him from joining us on the call today, but I look forward to introducing him properly during our next earnings call. With that, I'll turn it over to Terry for the financial update.
Terrence Ronan: Thanks, Andrew. The first quarter of 2024 was first and foremost highlighted by significant year-over-year progress to our GAAP net loss from continuing operations, which improved $57 million to a net loss from continuing operations of $23 million from $80 million and adjusted EBITDA improved from a loss of $38 million in Q1 of 2023 to a profit of $7 million during Q1 2024. Both of these results reflect Clover continuing to make impressive progress on its path to full year 2024 adjusted EBITDA profitability driven by solid insurance results, and better management of spend and adjusted SG&A. Starting with our insurance performance, MCR improved to 77.9% this quarter from 86.6% in Q1 of last year, with insurance revenue growing 8% year-over-year to $342 million. As a reminder, our MCR does not include the quality improvement expenses that Andrew mentioned earlier. And we intend in the future to improve our transparency here to align better with industry standard loss ratio calculations. That said, MCR improvement of nearly 900 basis points, and incremental revenue growth was driven by a continued focus on optimizing operations, ensuring processes to increase the accuracy of -- claims payment and risk adjustment, the added benefit of our transformation to refine and replatform our insurance operations and also impacted by favorable prior period development flowing in from our strong 2023 performance. We have also focused on significantly increasing value delivered through our care management platform underpinned by Clover System and Clover Home Care, which helps us to deliver proactive care management at scale, and then with the cost curve for our [indiscernible] members. On the adjusted SG&A front, I'm equally excited about the durable progress we've shown in our operating expenses, generating a year-over-year reduction in adjusted SG&A of 12%, this quarter to $75 million as compared to Q1 of 2023. Before I touch on the improvements that drove this large optimization, I do want to briefly call out that we booked a higher claims adjustment expense and it's typical, $3 million this quarter compared to a immaterial act during the first quarter of 2023. This [indiscernible] due to the claims payment related disruptions that Andrew touched on, as it increases our IBNR and claims inventory estimates. To be clear, this is simply an accounting reserve rather than a cash expense that temporarily elevated. Our reported Q1 adjusted SG&A is an expense that we expect to reverse as we resolve the claims backlog associated with this disruption. That said, our SG&A improvement this quarter was driven primarily by our previously mentioned shift to our new MA planned operational ecosystem that we've successfully implemented. Our workforce rationalization announced last year, and our exit from a non-insurance ACO program. Our Q1 results give us confidence that we will meet our full year adjusted SG&A guidance. Turning to the balance sheet, we ended Q1 2024 with total restricted and unrestricted cash, cash equivalents and investments totaling $440 million on a consolidated basis. For the $133 million at the parent entity and unregulated subsidiary level. To provide a little more context as the expected $39 million cash settlement to CMS for our 2023 ACO reach performance that Andrew mentioned, you're able to calculate this by subtracting the assets related to discontinued operations and the liabilities related to discontinued operations line items from our consolidated balance sheet with our quarterly 10-Q filing. This expected cash outflow includes both our shared loss and a repayment of working capital obligations associated with the program and will impact both consolidated and unregulated balances. Once settled, this will be the final cash outflow we expect to pay in connection with the ACA, ACO reach program. Lastly, to reiterate Andrew's earlier comments, we believe we will be breakeven to slightly positive cash flow from operating activities during the full year 2024, excluding the impact from discontinued operations. And as such, we maintain our view that Clover has sufficient capital for operating and growth needs. I hope that this added clarification gives you all a sense of confidence we have in our liquidity position that we will continue to prudently manage. In summary, I'd like to emphasize that Clover delivered impressive progress on its path to profitability this quarter, a great year-over-year improvement in each of its key operating metrics. We look forward to sharing more updates on our financial progress in the coming quarters. With that, I'll turn the call back to Andrew for some closing comments.
Andrew Toy: Thanks, Terry. Before we head to Q&A, let me summarize the key points of the quarter and give some high-level forward-looking commentary. One, we exceeded our expectations on adjusted EBITDA and we are adjusted EBITDA profitable in Q1 and have high conviction that we will be profitable for the full year 2024. And as such, we have significantly increased our full year 2024 adjusted EBITDA guidance. Two, in the first quarter, we also exceeded our expectations for insurance revenue, which we grew by 8% year-over-year, and we improved our full year insurance revenue outlook. Three, we feel good about our balance sheet and liquidity profile, and believe we do not need additional capital at this time. Given the tremendous improvement in our fundamental insurance operations and profitability park, I'd like to give some commentary around our forward-looking strategy, particularly in light of some recent regulatory shifts. Firstly, we are in the middle of planning for a critical 2025 year. There are a number of changes in the industry, including the continued phase in of the HCC V28 changes I mentioned earlier, the introduction of the IRA changes to Part D, as well as having a three star plan year for Clover. Overall, I believe that we are in a good position regarding these changes. As I said before, our Clover Assistant platform already conforms with many of the V28 changes, so we feel we are better positioned than others in the industry in that regard. With respect to Part D, we believe we have a powerful asset in Clover Home Care, which already services our most vulnerable members. These are the same at risk members who often have very high Part D costs and enter the catastrophic phase. As such, we are already looking at ways to serve this population even better. Given that our unique care management platform has always been anchored on the earlier identification and management of disease, we feel better positioned to sail upwind into these changes in a way other plants probably cannot. In particular, those who have rapidly expanded their presence in the PPO market in recent years. Additionally, we are not yet fully optimized on the platform. Throughout the rest of this year, we plan to continue to release new Clover Assistant features to better identify and service our riskiest members [ph]. We also have been absolutely focused on star rating measures. We've seen tremendous improvements in certain areas, such as [indiscernible] measures, and we're investing in additional capabilities to support CA providers for even further improved start and quality performance. To help drive all these care platform improvements, we are also adjusting our operating structure. Starting last month, we established and affiliate entity for the purpose of unifying Clover Health, nonclinical quality improvement services offerings. This affiliate we will begin by servicing our health plan in New Jersey and in the future, we'll also serve third parties. Our goal here is twofold. First, we believe this structure will drive higher quality and better health outcomes for our members in New Jersey. And second, by unifying management of our health information technology and care coordination services, we will drive deeper focus on our partnerships with local physicians. Turning now to core operational SG&A. I would note that the advent of ML and AI has traditionally been focused on our CA platform, but I certainly believe in the transformative power of AI on core operational efficiency and SG&A improvement. As such, we are very focused within Clover on helping bring AI into our operations. Here, I'm talking about places where we can add to member delight, while significantly reducing costs. For example, in the areas of customer service, care coordination and claims processing. We will therefore be maintaining a focus on pursuing SG&A opportunities through this year and next. Given all this, our top level goal at Clover is to maintain the momentum that we have developed in the last couple of years and keep on refining our core fundamentals. We expect our strong anticipated adjusted EBITDA and MA planned performance in 2024, as well as the opportunity to continue to deliver SG&A optimization to provide us a great starting point for 2025 and put us in a much better position than our peers to handle the various industry headwinds. During the last two bid seasons, we've employed a disciplined approach to benefit design, as evidenced by our strong 2023 performance and improved guidance for 2024. This disciplined approach has allowed our MA plan to experience a stable membership base, allowing for better line of sight into revenue and medics drivers as we manage our cohorts. We plan to continue this approach into 2025, and feel that it positions us well compared to competitors. It is too early in the year to provide anything more specific as we are in the midst of preparing our 2025 bids, but we believe that we have a strong plan in place to address the various industry and star rating challenges through continued discipline in our planned design. Regarding revenue growth, for 2025, we will maintain our planned design discipline, and focused on once again delivering top line revenue growth of high single digits, even at three stars for 2025. With [indiscernible], we intend to maintain our focus on [indiscernible] in both Part C and Part D. And on the SG&A front, I would like for us to deliver significant SG&A efficiencies, as evidenced by our guide that will fall directly to our bottom line. I believe these changes have the opportunity to be quite sizable and could be commensurate with the improvements we have delivered each year in the last couple of years. We look forward to providing an update here later in the year as we aim to continue to improve our Clover Assistant software, enhance our robust home care capabilities for our sickest members and execute upon initiatives to improve our business model to provide better care management for our members. Once again, thank you to everyone and I very much look forward to delivering an adjusted EBITDA profitable Clover for full year 2024. On that note, let's go to questions.
Operator: [Operator Instructions] We will take our first question from Richard Close with Canaccord Genuity. Please go ahead. Your line is open.
Richard Close: Yes, thanks, Andrew. Congratulations on the progress. I was wondering if you could just sort of walk us through, put your thoughts on the progression of adjusted EBITDA through the rest of the year. I guess there's a lot of moving parts. Obviously, what you’re doing with respect to the change health care, hacking and some of the other dynamics. So if you could just walk us through maybe the quarter -- how you’re thinking about the quarter reprogression, that would be helpful.
Andrew Toy: Yes, thanks, Richard. Appreciate it. So as we said in remarks, a couple of different dimensions. First of all, development from 2023 went up well from our perspective and we feel comfortable about trend. And so that's what flows now into our forecasting for this year that gives us confidence in the guide and the improvement in the guide that we provided today. We do have that higher IBNR related to change and our operational transition that I alluded to. And so what that basically means is, is that we feel good on the trend, but there's a little bit more, a little bit less visibility that we would normally have and we expect that to clear out through the rest of the year. So we'll provide more updates there as the year progresses, but we are clearing out that backlog now. What I would say also is that Q2 generally for us would have a more favorable seasonality in our normal trend. And so what that would mean is that we would have more favorable EBITDA progression in Q2, and we would generally have a less favorable progression in Q4, and between all that seasonal aspects that would flow into our guide.
Richard Close: Okay. And then with respect to the new calculation, I guess, getting more in line with the competitors out there, will you be providing that, I guess, on a quarter -- quarterly historical basis, so we can see that trend or any comments there would be helpful.
Andrew Toy: Yes, great question. Our intention is yes, to provide that within a backward look as well. So you can have that see -- how that actually progressed historically. And so it would match up with how we provide the MCR in the past, you could see how the BER would flow as well.
Richard Close: And will that be in the 10-Q filing? Or is that something that comes next quarter when you report?
Andrew Toy: Oh, yes, this is more of a heads up for that. This will happen next quarter. So for now, it's the way we've always done it with the MCR and then we will provide the new BER calculation with some of the historical numbers next quarter.
Richard Close: Okay. Thank you. I'll jump back in the queue.
Andrew Toy: Right. Thank you.
Operator: [Operator Instructions] We'll take our next question from Jason Cassorla with Citigroup. Please go ahead. Your line is open.
Unidentified Analyst: Hey, everyone, thanks for the question. [Indiscernible] on the line for Jason. So just revisiting that comment on a quarterly cadence for between 24 MLR and the new definition mentioned the IBNR due to the adjudication normalization. But can you give us a sense of maybe the magnitude of these step changes over the next few quarters?
Andrew Toy: The magnitude of the bridge to BER, you mean?
Unidentified Analyst: Yes. And step up, step down, quarter-to-quarter.
Andrew Toy: Yes, so we don't -- we're not providing any of the -- any quarter-to-quarter information there right now. Like I said, for the BER new calculation, we will provide that next quarter. But what I said did say in the comments was roughly you could think about the full year BER mapping to our MCR guidance that the BER would be in the low to mid 80s. And that would provide a more apples-to-apples comparison to industry peers.
Unidentified Analyst: Okay, got it.
Operator: [Operator Instructions] And we'll take a follow-up from Richard Close with Canaccord Genuity.
Richard Close: Yes, and two follow ups really quick. Considering I guess the higher utilization that has been plaguing the sector over the last several quarters, I'm curious how the provider market is reacting. And I guess specifically, are they more receptive to utilizing Clover Assistant now? Have you noticed any change over the last couple quarters?
Andrew Toy: Great question there. I think the way we think about Clover Assistant is that it's a great way for providers to improve their clinical capabilities. It's also a great way for them to enter into value based care. So that's definitely something which we're exploring. And we're seeing a lot of interest in our model, because I think that some of the older ways of approaching value based care in MA are coming into a little bit more of a challenging environment. So overall, I think that yes, there is definitely interest in looking at other models in the provider side.
Richard Close: Okay. And then my second question is the emergence of this affiliate that you talked about in terms of your operating structure and focused in on New Jersey. Can you just go into a little bit more on that? Exactly what is that? What was the genesis of it, why only New Jersey? And then it sounds like you're looking to market that to other managed care organizations. If you can just go into that, that would be helpful.
Andrew Toy: Yes, when we talk about that [indiscernible] organization, what we're looking at there is, we feel like we have a tremendous way to deliver quality in New Jersey clinical quality through technology, through services, that includes Clover Assistant, but other technologies as well, as well as our Home Care capabilities. And so between all of those capabilities that we have in market in New Jersey, we believe that we are already investing so much in that, that it makes sense to perhaps offer that to third parties in the future. No more to share there right now, but that's the genesis of that thinking.
Richard Close: Okay. Thank you.
Operator: And this concludes the Q&A portion for today's conference. I would now like to turn the call back over to Andrew Toy for any additional and closing remarks.
Andrew Toy: All right. Well, thank you for the questions. Appreciate them as always. So to close, we believe that Clover Health [indiscernible] is really added an inflection point. In summary, firstly, we exceeded our expectations for Q1 results on insurance revenue and adjusted EBITDA. Secondly, we've improved our insurance revenue and adjusted EBITDA guidance for full year 2024. And lastly, we announced that our Board of Directors has authorized a share repurchase program of up to $20 million of the company's Class A common stock over the next 2 years. We believe that we are the only technology powered managed care company via our differentiated care management platform in Clover Assistant and Clover Home Care that aims to deliver better care on a wide network PPO chassis. This is the future of Medicare Advantage, and we look forward to continuing to lead in this aspect. Thank you all for your continued interest in our company, and I look forward to updating you on our progress towards achieving our goals in the coming quarters. Thanks again.
Operator: This concludes today's Clover Health first quarter 2024 earnings call and webcast. You may disconnect your line at this time, and have a wonderful day.
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