Clover Health at Canaccord Conference: Strategic Tech-Driven Growth

On Tuesday, August 12, 2025, Clover Health Investments (NASDAQ:CLOV) presented at Canaccord Genuity’s 45th Annual Growth Conference, emphasizing its technology-driven approach to Medicare Advantage. While Clover Health reported significant membership growth and profitability, it also faced challenges from increased Part D utilization, affecting recent stock performance. The company remains optimistic about future growth and strategic market focus.

Key Takeaways

• Clover Health projects a 32% membership growth for 2025 while maintaining profitability.
• The Clover Assistant platform uses AI to improve health outcomes and reduce costs.
• Higher Part D utilization impacted recent stock performance, but a 40% increase in CMS subsidies is expected next year.
• Strategic focus on core markets like New Jersey and Georgia, with plans for technology expansion.
• Anticipates a four-star payment year in 2026, enhancing revenue potential.

Financial Results

Clover Health has established profitability on an adjusted EBITDA basis in 2024, with positive cash flow of $84 million. The company anticipates sustaining this profitability with a projected 32% membership growth in 2025. Key financial highlights include:

• Flat year-over-year adjusted EBITDA comparing the first half of 2025 to the first half of 2024.
• Improvement in Medical Cost Ratio (MCR) with a 700 basis points reduction by the second year and an additional 800 basis points by the third year.
• Expected 5% increase in premium fees in 2026 due to the shift to a four-star payment year.
• Compounding impact of a 9% CMS rate increase from 2024 to 2025.
• Significantly reduced stock-based compensation expenses expected in 2026.

Operational Updates

Clover Health’s operational strategy focuses on leveraging its technology platform, Clover Assistant, to empower physicians and improve patient outcomes. Notable developments include:

• Expansion into core markets such as New Jersey, Georgia, South Carolina, and Texas.
• Introduction of Counterpart Health, offering technology to third-party providers and payers, aiming to improve their MCR by over 1,000 basis points.
• 97% of members are part of wide-access PPO plans.
• Physicians using Clover Assistant diagnose chronic diseases like diabetes 36 months earlier.

Future Outlook

Clover Health remains focused on strategic growth and technological enhancements. Future projections and strategies include:

• Acceleration in membership and revenue growth beyond 2025.
• Anticipated membership growth rate in 2026 comparable to or exceeding 2025 levels.
• Continued focus on clinical care and technology-driven improvements in health outcomes.
• Expansion of technology offerings to third-party providers and payers.
• Targeted growth in counties with established physician networks and membership bases.

Q&A Highlights

The Q&A session provided insights into Clover Health’s strategic management and market positioning:

• Higher utilization in Part D is being managed with investments in Clover Assistant and expected CMS subsidies.
• Core Part C cohorts are aligning with cost reduction expectations.
• Specific benefit changes for 2026 are not yet disclosed due to AEP.
• Emphasis on growing in specific counties with established physician networks.
• Technology and clinical care focus are key differentiators in minimizing the impact of V28.

For further details, please refer to the full transcript below.

Full transcript - Canaccord Genuity’s 45th Annual Growth Conference:

Richard Close, Analyst, Canaccord: Great. Good morning. Thank you for attending our conference this year. I’m Richard Close. I cover, digital and tech enabled health at Canaccord.

I’m excited to have Clover Health here again this year to update us on the company’s progress. It’s definitely come a long way over the last several years. From the company, we have CFO Peter Coopers here to go over the story and then we’ll go into a little bit of a q and a fireside chat. If you have any questions, raise your hands and we’ll go from there. Peter, thanks.

Peter Coopers, CFO, Clover Health: Thank you for having us, Richard. We’re glad to be here at the Canaccord Growth Conference. We are a tech enabled insurance company focused on Medicare Advantage that is actually growing amidst tough industry headwinds. From the start, our founders wanted to combine two things, deliver great clinical outcomes, one, and two, also have broad access for members for health care. This is pretty unique in the industry, we believe, and it’s very rare in health care to be running a business that’s both clinically and financially sound, and that is what we believe we have done.

Richard Close, Analyst, Canaccord: Go back.

Peter Coopers, CFO, Clover Health: One more. Yes, clicker doesn’t work. We’ll just do it this way. Go to Page two please. So from an investment perspective, again, fairly unique solution that we offer.

We’re leading the technology, physician we enable physicians at the point of care at the time of care, which is really unique. Our technology platform called Clover Assistant is powered by machine learning and AI at the core, not any back office, and it helps clinicians perform at the top of their license to earlier diagnose, treat diseases earlier, deliver better health outcomes for members, and over time, also lower cost and total cost of care. Medicare Advantage is a large market, around $500,000,000,000 annually. Thirty five million people in The U. S.

Are enrolled in Medicare Advantage, forty percent of those are in PPO plans roughly. We have a differentiated approach where we believe in wide access for members. So 97% of our members in Clover, Clover members, are part of our PPO plants, which is a wide network and the proprietary technology helps drive clinical outcomes and is also a differentiator in the market. From a growth perspective, we are growing 32% at the midpoint from a membership perspective for 2025 and thirty seven percent for the midpoint on revenue, which is very strong growth, especially in the MA market. While doing that, we’re also maintaining and sustaining profitability with profitability on an adjusted EBITA basis flat year over year comparing the first half of this year versus the first half of last year.

Next slide. It doesn’t work. Can you do it, please? Yeah. This one.

K. Can you okay. You should be the same. Okay. Alright.

Thank you. So efficient from the get go, from the start of the business, is to empower every physician with technology to identify, manage, and treat, especially chronic diseases, earlier. So earlier diagnosis, earlier treatments, better disease management, better clinical quality of care, and better health outcomes, and then also source accessible care at lower total cost of care. And here’s a snapshot actually of what the Clover assistant technology looks like. This is the user interface that a physician uses at the point of care at the time of care.

Our proprietary technology combines over 100 sources of medical records for to all EHR systems, all claims, almost all labs, all meds as well. And then our proprietary models synthesize this data to information and actually to clinical insights, then helping during a visit for the PCP to provide better care and also care recommendation. The PCP, the clinician, makes the clinical decision, but we empower the physician to make better choices, more informed choices. Think about it that the PCP essentially has a thousand or thousands of second opinions, large data sets, better recommendations proven over time. Interesting summary slide here is that since we are at scale and have been operating our insurance plan at full risk, we do not have risk delegation in the traditional sense.

And we are able to compare datasets of members that are covered by the software stack and compare to members that are, not covered by the software. And so we’ve issued a number of white papers that are publicly available on a number of chronic diseases that you see here. In general, physicians using our software are able to earlier identify and treat chronic diseases. So diabetes, earlier diagnosis, and earlier treatments, on average, thirty six months earlier. So that’s three years earlier that treatment can start for better health outcomes.

Chronic kidney disease, CKD stage three, eighteen months earlier on average. Chronic heart failure and COPD, also early diagnosis, but also very significant to hospital hospitalizations and hospital readmissions are significantly lower. For CHF, eighteen percent lower and twenty five percent lower. And for COPD, fifteen percent lower and eighty percent lower. And then also another testament to the quality of the clinical care, we have the highest HEDIS score correlates to clinical quality.

We have 4.94 stars out of five stars possible in a clinical measure, for plans with 2,000 or more members. So very unique testament there. Here’s a white paper on COPD, and you’ll see the reduction in hospitalizations and then also readmissions. The fifteen percent and eighteen percent, very significant reduction in inpatient admissions. Now let’s compare the business model, the differentiated business model that we have at Clover versus a traditional Medicare Advantage business model.

First, we have a clinical approach, tech enabled, at the point of care, at the time of care that we talked about earlier versus more traditional players and payers that are focused more on back office and administrative measures. The strategy is to identify disease earlier, treat it earlier for better health outcomes. So we are preventive on health care versus traditional players being reactive, back office oriented. Choice choice in health care, very important. We offer a wide open network where members have choice of physicians in the PPO plan.

Majority of other players approach a closed network HMO network. Risk delegation, like we talked about earlier, we’re not focused on risk delegation. We don’t have risk delegation in a traditional sense. Traditional players have a lot of risk delegation. So very important to point out.

And the important point there is that actually this is a proof point for the technology working So P and L is a pure P and L. It shows full risk as well. Home care, we use the same technology in home care as well, and our home care teams are led by physicians, mostly MDs. From a cost perspective or BER perspective, we’re industry leading, difficult to compare exact apples to apples, where we believe we’re a couple of 100 basis points lower as far as cost ratios. Then I think it’s important to talk about the growth year over year.

So 2024, 2024 was the first year that we established profitability on an adjusted EBITDA basis. We also had positive cash flow from operating activities in 2024 of around $84,000,000 Then going to 2525 is a growth year for us with a large cohort on new members. Again, 32% new members from ’24 to ’25. So that impacts actually gross profit because new members generally come at higher cost, if you will. But then our maturing cohorts, returning members, actually are incremental to gross profit as they mature.

We do have some additional volume impact of serving more members on the variable SG and A side, And we’ll also continue to invest in R and D and in quality. That net is offset also by an efficiency program, that helps reduce cost and on the SG and A side and, and create leverage. So net net, EBITDA profitability in twenty four to twenty five, given all these drivers, we are sustaining profitability while growing 32% members, which is very unique in the industry. Here you see the members of growth. So from 2024 to 02/2025, 32% membership growth.

Very important on the right side, we issued earlier this year a cohort analysis, which shows the impact of earlier identification, earlier diagnosis, earlier treatment, and better health outcomes, and a lower total cost of care over time, where if we compare the cohorts by year, a year two cohort of members has a 700 basis points incremental or lower MCR, so higher gross profit. Another 800 basis points get added by year three. So this enables us actually to grow at a much above market rate where other players are actually retreating specifically in the PPO space. Now we’re focused in our on our core markets, which are New Jersey, Georgia, South Carolina and Texas. We have ample growth opportunity runway and momentum, we believe, for many years to come.

If we look at the New Jersey markets, if you look at all plants, we probably have around a 12% market share. So a lot of growth is to be had there given our strength and momentum. In Georgia, I believe there’s a runway there also for a lot of momentum. But outside these four states, we want to bring this technology and better health outcomes to as many members in Medicare Advantage as possible. So in middle of last year, we came to market essentially providing making this technology also available for third party providers that bear risk and also to payers, both regional and national.

We’ve announced a number of deals. We cannot announce every deal, if you will, where we offer this solution on a SaaS basis or on a per visit basis from a revenue model perspective. And we believe that we can help address providers and payers improve their cost ratio or MCR by over 1,000 basis points. So we have a strong and compelling pipeline, and we continue to build momentum there. We’re certainly busy here.

Now looking at our opportunity, membership and revenue, we believe, will continue to grow. In our prepared remarks for earnings last week, we believe that membership growth and revenue growth will accelerate from this year actually. Same accounts for profitability also. I’ll talk in a minute about what we believe and see for 2026 profitability. We’ll continue to execute, of course, on the quality side, counterpart, the third party software offering to third parties has great momentum, and we’ll expand that also.

And then we’ll continue to build on our Clover system technology. Again, here is the strategic flywheel. Because we grow membership, because we get more usage of Clover system technology, we deliver better outcomes from a clinical perspective, better health outcomes that reduces total cost of care, and that then again enables us to reinvest in member benefits From a 25% perspective, from a guide perspective, we reconfirmed the guidance ranges for membership and revenue and EBITDA and adjusted net income as well. From a 2026 tailwind perspective, again, we believe that we will grow at the same rate from a membership perspective as this year or potentially higher.

We’re also going from a three and a half payment year to a four star payment year next year, which is significant from a financial perspective. We also have a compounding impact of the CMS final rate notice of around 9%, increased from 24 to 25. Also, the new members this year, that cohort will be a year two cohort next year, and it will also have additional leverage, from our cost efficiency initiatives, that we’ve implemented. And then lastly, from a GAAP perspective, we issued an eight ks yesterday pointing out that our stock based comp expense, more than half of the expense from January 21 to January 26 is really consisting of founder based awards from the IPO that are expensed over that period, and that expense will stop after January 26. And therefore, we expect 2026 to have significantly lower stock based comp expense.

So very important from a GAAP perspective. You’re right. Yeah.

Richard Close, Analyst, Canaccord: Great. So Peter, maybe just hitting on the second quarter update last week. The stock, you know, did take a hit on the results. You’ve done a great job over the last two years versus every other managed care company in terms of controlling medical costs, benefit costs. Could you talk a little bit about the adjustment that you made on the benefit cost trend, the reason for it and maybe why you’re not concerned about that as you’re thinking about ’26?

Peter Coopers, CFO, Clover Health: I think the second quarter results came in beat expectations of the markets, both on revenue and profitability. We pointed out some higher utilization in Part D, which is a known unknown, if you will, because it’s new for the industry. We’re managing that from a perspective that we are investing and we have additional capabilities in in Clover Assistant as well to manage medications, if you will, met reconciliation, and then, of course, identification of possibilities for generic mets as well. Another point on a Part D is that the direct subsidy from CMS will increase by 40% to next year. So we’re working towards that, if you will, while we’re executing to maintain and reduce the cost during ’25.

Important to note Part d, the catastrophic reimbursement by government is off So it’s new for for a lot of the MA plans. So we believe we can work through that as well. Yeah. So we’re really looking forward to, kinda continuing the trend to ’26.

On your question on the cost trends, at the core part c, cohorts, dynamics as far as cost reductions and MCR, perspective, they are trending in line, to our expectations.

Richard Close, Analyst, Canaccord: Okay. And then anything to add on the supplemental because you guys called that out as well. Do you make changes in terms of, you know, what you’ve put in for the benefits for the next, you know, benefit year 2026?

Peter Coopers, CFO, Clover Health: Yeah. We really can’t talk about the benefits quite yet because AEP is coming up. But I would say for dental, it’s we’ve seen more more utilization there, which is actually good for members that are used. Of course, we’re looking at, investing there as well and also deploying Clover assistant technology also at dentists. Right?

So holistic approach from a technology perspective, and they’re also looking more at network management also.

Richard Close, Analyst, Canaccord: Okay. And then with respect to next year, you know, you did say that, you know, potential for membership growth in in the next AEP. How do you balance the growth with what’s going on in the overall market in managed care with people exiting, various markets? And just talk about that a little bit.

Peter Coopers, CFO, Clover Health: Yeah. And that’s a great question. From a from a go to market and growth perspective, we’re laser focused on growing. We have a strategy by county, where we have the network of physicians using the software, and we also have a membership base, if you will, that coincides. So we’re aiming to grow there and expand it.

So think about it that way. And we wanna be really precise in growth like we’ve shown last AEP, and we believe we continue, and we can repeat that as well for this AEP.

Richard Close, Analyst, Canaccord: Is there anything different in the dynamics in New Jersey, what you’ve been able to do in New Jersey versus Georgia or Texas or South Carolina? Do you see those states, you know, eventually getting to the size of New Jersey?

Peter Coopers, CFO, Clover Health: Yeah. New Jersey is certainly where we started, and that has, of course, the largest, membership base and the largest PCP base using Clover system as well. And we see Georgia following after that, if you will, growing also to that maturity as far as network and members.

Richard Close, Analyst, Canaccord: And one thing is, obviously, with the medical cost trend, performance that you’ve had over the last several years, introducing counterpart health as an avenue to bring that technology, I guess I would characterize it, to the masses, let’s say. Do you ever envision breaking out the revenue from that just so we can see the performance of that? Obviously, it would be much smaller because I assume it’s a, you know, SaaS license technology versus managed care. But can you just talk about how you think about that?

Peter Coopers, CFO, Clover Health: Well, first of all, we’re excited about the progress in in counterpart. Certainly, the the heat is aspect to the quality aspect that we talked about earlier resonates really well with both the risk bearing providers and with payers, both regional and and national. So certainly, we’re certainly busy. It’s a significant opportunity. We’ve got a strong pipeline.

At some point, we will break out revenue and provide some more metrics.

Richard Close, Analyst, Canaccord: Okay. And then maybe just really to wrap up here over the last couple questions. The performance has been good while others have really stumbled. There’s been a lot of changes with respect to managed care V28. Maybe just go into a little bit deeper.

Is it just the technology that has differentiated the company or enabled it to, you know, perform as you know, or, quote, unquote, buck the trend over the last couple years compared to everyone else?

Peter Coopers, CFO, Clover Health: Yeah. I think I think two things there. So that, one, the technology is at its core, Clover system technology, like we talked about earlier, combining all available medical data, synthesizing that to information, to actionable insights, to earlier diagnose and earlier treat, diseases for better health outcomes and lower total cost of care. That certainly is the main driver there. And then I think secondly, on FEED twenty eight, our focus our founders have always focused on clinical care first, which means that from a prescribing perspective, we generally our physicians don’t necessarily, have used descriptions that are now not applicable anymore for V28, like a mild depression, I believe, in bruising.

We believe that in our plan, that is a much lower occurrence. And therefore, we think that any headwinds are really de minimis from a V28 perspective. And I believe we’re in year two or year three now.

Richard Close, Analyst, Canaccord: We

Peter Coopers, CFO, Clover Health: don’t see any impact from that.

Richard Close, Analyst, Canaccord: And then if we could slip one final one, you did mention going to four stars for next year. And how do we think about that in terms of does that like just drop down in terms of profit? Or, you know, how do how do we think about that?

Peter Coopers, CFO, Clover Health: Yeah. So the economics on a on a high level perspective, moving up from a three and a half star payment year in 2025 to a four star payment year in 2026, adds around 5% in premium fee of bonus on the top line. Now we haven’t disclosed and we haven’t disclosed the kind of benefits yet, so there might be some reinvestment in benefits as well. But certainly, it’s a strong tailwind.

Richard Close, Analyst, Canaccord: Well, good. Thanks for your time. I appreciate it.

Peter Coopers, CFO, Clover Health: Appreciate it. Good to see you. Thanks for having us.

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