Alignment Healthcare Reports Strong First Quarter 2025 Results; Exceeds High-End of Expectations On 4 Critical KPIs; Raises Midpoint of 2025 Guidance; Announces CFO Transition

   -- Delivers Q1 revenue of $926.9 million, up 47.5% year over year, and grows 
      Medicare Advantage $(MA)$ membership by 31.7% to approximately 217,500 
      members 
 
   -- Exceeds high-end of Q1 guidance on membership, revenue, adjusted gross 
      profit and adjusted EBITDA 
 
   -- Raises midpoint of outlook ranges for 2025 year-end membership, revenue, 
      adjusted gross profit and adjusted EBITDA, supported by strong 
      first-quarter clinical performance and enrollment growth momentum 
 
   -- Announces transition of Thomas Freeman from Chief Financial Officer $(CFO.AU)$ 
      to Strategic Advisor to the CEO; names finance veteran Jim Head as CFO 

ORANGE, Calif., May 01, 2025 (GLOBE NEWSWIRE) -- Alignment Healthcare, Inc. (NASDAQ: ALHC), today reported financial results for its first quarter ended March 31, 2025.

First Quarter 2025 Financial Highlights

All comparisons, unless otherwise noted, are to the three months ended March 31, 2024.

   -- Health plan membership at the end of the quarter was approximately 
      217,500, up 31.7% year over year 
 
   -- Total revenue was $926.9 million, up 47.5% year over year. 
 
   -- Adjusted gross profit* was $107.2 million and loss from operations was 
      $(5.4) million 
 
          -- Adjusted gross profit excludes depreciation and amortization of 
             $7.6 million and selling, general, and administrative expenses of 
             $103.8 million (which includes $16.0 million of equity-based 
             compensation). Adjusted gross profit also excludes $0.03 million 
             of depreciation expense and an additional $1.2 million of 
             equity-based compensation recorded within medical expenses 
 
          -- Medical benefits ratio based on adjusted gross profit was 88.4% 
 
   -- Adjusted EBITDA* was $20.2 million and net loss was $(9.4) million* 
      Please see "First Quarter 2025 Non-GAAP Reconciliation Tables" below for 
      more information on the non-GAAP financial measures reported here as 
      supplemental information. 

"Alignment Healthcare's first-quarter performance reflects the strength of our model and the discipline of our execution, showing what's possible when technology, clinical management and member-first service operate as one," said John Kao, founder and CEO. "By staying focused on quality, clinical outcomes and member experience, we exceeded expectations across all key measures. With a strong start to the year and momentum building, we're confident in our ability to scale with purpose and deliver on our mission of Medicare Advantage done right."

Outlook for Second Quarter and Fiscal Year 2025

 
                 Three Months Ending June 30,   Twelve Months Ending December 
                             2025                          31, 2025 
$ Millions           Low             High            Low             High 
--------------  --------------  --------------  --------------  -------------- 
Health Plan 
 Membership            220,000         222,000         228,000         233,000 
Revenue                   $950            $965          $3,770          $3,815 
Adjusted Gross 
 Profit(1)                $105            $113            $420            $445 
Adjusted 
 EBITDA(1)                 $10             $18             $38             $60 
 

_______________________

(1) Adjusted gross profit and adjusted EBITDA are non-GAAP financial measures presented as supplemental disclosure. We cannot provide estimated ranges for the most directly comparable GAAP measures without unreasonable efforts because of the uncertainty around certain items that may impact such GAAP measures, including equity-based compensation expense and depreciation and amortization, that are not within our control or cannot be reasonably predicted. See "First Quarter 2025 Non-GAAP Reconciliation Tables" for additional information.

CFO Transition

The company also welcomes health care finance veteran Jim Head to succeed Thomas Freeman as Chief Financial Officer (CFO), effective May 2, 2025. After nearly 10 years with Alignment, including eight as CFO, Freeman has decided to step down as CFO and transition to the role of Strategic Advisor to the CEO where he will help ensure a smooth handover of CFO responsibilities and support the company's long-term strategy and key partnerships.

"I want to personally thank Thomas for his decade of tireless dedication and leadership, guiding us through our IPO and positioning us for long-term success," Kao said. "His contributions helped guide Alignment's financial growth from a local health plan to a nationally recognized leader in Medicare Advantage. Alignment is now in the strongest financial and competitive position of its history and Thomas's transition to an advisory role reflects the collaborative approach we share in positioning Alignment for sustained success.

"At the same time, I am pleased to welcome Jim to the team. His extensive experience and proven expertise in strategic finance, health care and business development make him the ideal leader to build on our strong foundation. I look forward to working with Jim as a strategic and financial thought partner. Together, this leadership team is well-positioned to continue scaling Alignment profitably and delivering on our mission."

"As I reflect upon the last 10 years, I'm incredibly proud of what we've accomplished," Freeman said. "We have improved the lives of countless seniors, and we've done so while driving sustainable and profitable growth. As the company achieves adjusted EBITDA profitability with strong visibility towards its 2025 financial objectives, now is the natural time to transition to the next financial leader. While there is never an easy time to step back, our financial foundation, our 2025 momentum and the company's mission are stronger than ever, and I look forward to supporting John and Jim to ensure a seamless transition."

Most recently, Head was Executive Vice President and Chief Financial Officer at Claritev. With more than 30 years of experience, Head brings valuable expertise and strategic thought leadership to the Alignment team. Prior to Claritev, he held senior executive leadership roles at BDT & Company, LLC, a merchant banking firm, and at Morgan Stanley.

"It's an honor to join Alignment at such a transformative time," Head said. "The company's commitment to delivering high-quality senior care is critical to the success of our health care system in the United States, and I'm excited to be part of Alignment's mission. I look forward to building on the strong financial foundation created by the team and contributing to the company's continued growth and operational excellence."

First Quarter 2025 Non-GAAP Reconciliation Tables

Adjusted Gross Profit(1) is reconciled as follows:

 
                                           Three Months Ended March 31, 
                                      -------------------------------------- 
                                             2025                 2024 
                                                               ---------- 
(dollars in thousands) 
Loss from operations                   $       (5,393)      $     (41,106) 
Add back: 
     Equity-based compensation 
      (medical expenses)                        1,152               1,133 
     Depreciation (medical expenses)               33                  52 
     Restructuring costs (medical 
      expenses) (2)                                --                 775 
     Depreciation and amortization 
      (3)                                       7,594               5,977 
     Selling, general, and 
      administrative expenses                 103,831              90,512 
                                          -----------          ---------- 
     Total add back                           112,610              98,449 
                                          -----------          ---------- 
Adjusted gross profit                  $      107,217       $      57,343 
                                          ===========          ========== 
 
 

(1) Adjusted gross profit is a non-GAAP financial measure that is presented as supplemental disclosure, that we define as loss from operations before depreciation and amortization, clinical equity-based compensation expense, clinical restructuring costs and selling, general, and administrative expenses.

(2) Represents severance and related costs incurred as part of a corporate restructuring designed to streamline our organizational structure and drive operational efficiencies.

(3) Amortization expense for the three months ended March 31, 2025 includes $0.6 million in impairment expense related to the remeasurement of goodwill associated with one of our subsidiaries

Adjusted EBITDA(1) is reconciled as follows:

 
                                           Three Months Ended March 31, 
                                      -------------------------------------- 
                                             2025                2024 
                                          ----------          ----------- 
(dollars in thousands) 
Net loss                               $      (9,354)      $      (46,575) 
Less: Net loss attributable to 
 noncontrolling interest                         240                   54 
Adjustments: 
      Interest expense                         3,950                5,427 
      Depreciation and 
       amortization(2)                         7,627                6,029 
      Income taxes                                21                   -- 
      Equity-based compensation(3)            17,187               20,854 
      Litigation costs (4)                       507                  320 
      Loss on ROU assets(5)                       --                  143 
      Restructuring costs(6)                      --                1,768 

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