Alignment Healthcare, Inc. Q4 FY2025 earnings call

2025 saw health plan membership growth and revenue growth. Demonstrated the advantages of the clinically-centric model in navigating disruptions. Non-California membership more than doubled with high-star rated plans in various states. In 2026, planned to invest in sales and distribution engine, build relationships with broker partners. 2026 AEP saw 31% year-over-year membership growth across markets, focusing on growing responsibly through bid design and sales strategy.

Fourth quarter: Health plan membership was 236,300, a year-over-year growth of approximately 25%, supporting total revenue of $1 billion, up 44% year over year. Adjusted gross profit was $125 million with an adjusted MBR of 87.7%, and adjusted EBITDA was $11 million. Full year: Total revenue was $3.9 billion, up 46% year over year. Adjusted gross profit was $495 million, resulting in an MBR of 87.5%, an improvement of 130 basis points year over year. Non-California markets had approximately 38,000 members, representing approximately 16% of total membership.

2026 full year: Health plan membership expected to be between 292,000 and 298,000; revenue in the range of $5.14 billion to $5.19 billion; adjusted gross profit between $615 million and $650 million; adjusted EBITDA between $133 million and $163 million. First quarter 2026: Health plan membership expected to be between 281,000 and 285,000; revenue in the range of $1.21 billion to $1.23 billion; adjusted gross profit between $138 million and $148 million; adjusted EBITDA between $26 million and $36 million.

Including impact of final phase-in of D28, uncertainty in rate environment, and potential effects of chart review policies, such as unlinked chart reviews having limited exposure but still a factor to monitor.

Q: Michael Hall asked about what would prevent Alignment in 2027 from having a rerun of 2024 or 2025; A: John responded the model works regardless of rate universe, will be disciplined in balancing growth and margin expansion.

Q: John Stancil asked about distribution change and new state expansion; A: John said will strengthen relationships with brokers and providers, considering entering new states.

Q: Matthew Gilmore asked about ADK metric; A: Jim responded affected by B28 and new member mix.

Q: Scott Fidel asked about MA industry regulatory pressure; A: John said need to return to CMS' original intention, focus on high quality and low cost.

Q: Craig Jones asked about 2027 rate; A: John responded focusing on skin substitutes and other factors.

Q: Ryan Langston asked about chart review exposure and broker relationship; A: John responded limited exposure and monitoring CMS' related measures.

Q: Whit Mayo asked about DSNP growth and STARS change; A: John responded on DSNP growth and STARS change being neutral.

Q: Jessica Tassin asked about MBR seasonality and retention; A: Jim responded on seasonal pattern and retention situation.

Q: Andrew Mock asked about risk model rebasing and MLR seasonality; A: John responded lower exposure than industry and similar MLR seasonality to 2025.

Q: Jonathan Young asked about new state entry and 2027 rate; A: John responded on provider engagement for new state entry and rate view.

Q: John Ransom asked about Ava deployment and MA impact on taxpayers; A: John responded on Ava deployment aspects and MA being a good deal for taxpayers.

Q: Raj Kumar asked about AEP new member engagement and non-California market operation; A: John responded on new member engagement trend and non-California market operation optimization