Clover Health Investments (NASDAQ:CLOV) raised the lower end of its 2026 financial guidance after reporting a third-quarter profit, and said it expects to achieve its first full year of GAAP net income profitability.
The Medicare Advantage insurer reported third-quarter revenue of $759 million, up 53% from a year earlier, and net income of $6 million, compared with a $24 million loss in the prior-year period. Adjusted EBITDA rose to $16 million from $2 million, while consolidated gross profit increased 77% to $130 million.
Full-Year Outlook Narrows
Clover raised the low end of each full-year guidance range while leaving the upper end unchanged. Its updated 2026 outlook calls for:
- Average Medicare Advantage membership of 157,000 to 158,000.
- Revenue of $2.97 billion to $3 billion.
- Consolidated gross profit of $540 million to $555 million.
- Adjusted EBITDA of $75 million to $85 million.
- GAAP net income of $25 million to $35 million.
Thornton said the company still expects a seasonal adjusted EBITDA loss in the fourth quarter, reflecting lower gross profit from normal medical cost seasonality and higher selling, general and administrative expenses as annual enrollment investments increase.
For the first nine months of 2026, average Medicare Advantage membership rose 49% year over year to approximately 157,000. Revenue climbed 57% to approximately $2.3 billion, and net income increased by $98 million to $62 million. Adjusted EBITDA more than doubled to $97 million.
Thornton said inpatient utilization continued to trend favorably year over year, while outpatient utilization was elevated but in line with the company’s initial outlook. Part D performance was better than anticipated, he added.
Growth and Member Economics
Clover did not provide formal guidance for 2027 or 2028, but executives said early activity during the annual enrollment period supported expectations for another strong year of membership growth. The company is focused on expanding in its core markets of New Jersey and Georgia.
Thornton said Clover anticipated plan exits in New Jersey when designing its 2027 offerings. He described Braven’s exit as involving a low-40,000 range of Medicare Advantage members, while noting that Devoted is entering the state and large national insurers are pulling back from $0 premium PPOs.
Management expects earnings growth to come not only from new members, but also from improving economics as existing members spend more time with Clover and its physician-support technology, Clover Assistant. Thornton said historical insurance gross profit per member per month has been approximately $70 higher in year two than in year one, and approximately $85 higher in year three than in year two.
The 2025 and 2026 cohorts together represent approximately half of current membership, Thornton said. He added that Clover Assistant coverage was tracking ahead of the prior year across cohorts and geographies. The company’s materials cite average coverage of about two-thirds over the past several years; Thornton said the current trend was moving toward that level.
New members could create a near-term drag on 2027 earnings, Thornton acknowledged. He said Clover is confident it can absorb the growth and engage new members in its care model. The company did not specify how much of the expected benefit from maturing cohorts would be retained in earnings versus reinvested.
Star Ratings and AI Investments
Chief Executive Officer Andrew Toy said Clover’s flagship PPO received five Stars for payment year 2028, while its HMO received 4.5 Stars. He said all Clover members are enrolled in plans rated at least 4.5 Stars for that payment year.
Thornton said the company’s 4.5-Star payment rating for 2027 and five-Star rating for 2028 carry the same payment dynamics. The higher rating supports competitive plan designs and member retention as cohorts mature, he said.
Asked about a pending government appeal, Toy said Clover felt good about its position and believed the original court decision was well decided. He declined to detail potential outcomes, saying the company would address an unfavorable result if it occurred.
Toy also said Clover is applying artificial intelligence to health plan operations and member service, including welcome calls for new members and chat-based scheduling. Thornton said the company expects to improve operating leverage by spreading fixed costs across a larger business and reducing variable administrative expenses over time.
Clover ended the quarter with approximately $513 million in cash, equivalents and investments and no debt outstanding, Thornton said. Operating cash flow totaled $203 million through September.
About Clover Health Investments (NASDAQ:CLOV)
Clover Health Investments, Corp. is a health insurance technology company focused on providing Medicare Advantage plans to eligible seniors in the United States. Its plans combine hospital, medical and prescription drug coverage with additional benefits that may vary by plan and location.
The company uses its Clover Assistant technology platform to provide physicians with data-driven insights intended to support clinical decision-making and care coordination. The platform aggregates member health information and helps participating providers identify care opportunities, manage chronic conditions and engage with patients.
Clover Health was founded in 2012 and became a publicly traded company in 2021 through a merger with a special purpose acquisition company.
