Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NeueHealth Inc (NEUE, Financial) delivered its strongest financial performance to date in the third quarter of 2024, with an adjusted EBITDA of $9.4 million.
- The company served approximately 509,000 consumers across its NeueCare and NeueSolutions segments, exceeding its full-year guidance range.
- NeueHealth Inc (NEUE) is focused on diversifying and growing its consumer base across various product categories, including the ACA marketplace, Medicare, and Medicaid.
- The company expanded its footprint in Central Florida, leveraging strong relationships with payer partners to grow the number of consumers served.
- NeueHealth Inc (NEUE) acquired full ownership of Centrum Health, simplifying its corporate structure and streamlining operations to support its value-driven care model.
Negative Points
- NeueHealth Inc (NEUE) reported an operating loss of $5.8 million in its NeueSolutions segment for the third quarter.
- The wind down of the ACA insurance business is ongoing, with remaining liabilities and obligations still being addressed.
- The company's NeueSolutions segment faced moderately lower medical costs, impacting overall financial performance.
- Despite strong performance, the company is still in the process of retrieving capital from discontinued entities.
- NeueHealth Inc (NEUE) faces risks and uncertainties that could cause actual results to differ materially from expectations, as highlighted in their forward-looking statements.
Q & A Highlights
Q: Can you provide more details on the strategic growth areas NeueHealth is focusing on for 2025?
A: G. Mike Mikan, President and CEO, explained that NeueHealth is concentrating on diversifying and growing its consumer base across all product categories, including the ACA marketplace, Medicare, and Medicaid. The company aims to leverage its ability to serve all populations in performance-based arrangements, which allows it to pursue various growth channels while minimizing adverse impacts from market dynamics. Additionally, NeueHealth plans to drive capital-efficient growth in existing and new markets by leveraging strong relationships with payer partners and expanding its footprint, as seen in Central Florida. The company is also focused on growing relationships with diverse providers and tailoring its population health tools to meet their unique needs.
Q: How did NeueHealth perform financially in the third quarter of 2024?
A: Jay Matushak, CFO, reported that NeueHealth achieved its strongest financial performance to date in the third quarter, with consolidated revenue of $232.9 million and a gross margin of $50.2 million. The company generated $9.4 million in adjusted EBITDA, exceeding expectations and contributing to a total of $17 million in adjusted EBITDA for the first three quarters of 2024. This performance places NeueHealth within its full-year guidance range of $15 million to $25 million.
Q: What is the status of NeueHealth's ACA insurance business wind-down?
A: Jay Matushak, CFO, stated that the wind-down of the ACA insurance business is proceeding as planned. At the end of the third quarter, the business had approximately $123 million in cash to fund remaining medical costs and other wind-down expenses, excluding risk adjustment obligations. The remaining liability associated with the ACA insurance business continues to decline, positioning NeueHealth to focus on its care delivery and provider enablement businesses in 2025 and beyond.
Q: Can you elaborate on the recent acquisition of Centrum Health?
A: G. Mike Mikan, President and CEO, mentioned that NeueHealth acquired full ownership of Centrum Health, one of its value-driven clinic brands, on October 30th. This acquisition simplifies the corporate structure and streamlines operations, supporting the company's focus on advancing its value-driven, consumer-centric care model. The transaction underscores NeueHealth's belief in its Centrum Health clinics and its ability to create a seamless, coordinated healthcare experience for consumers.
Q: What are NeueHealth's expectations for the remainder of 2024?
A: Jay Matushak, CFO, confirmed that NeueHealth expects enterprise adjusted EBITDA to be between $15 million and $25 million for 2024, with consolidated revenue of approximately $950 million. The company anticipates serving between 475,000 and 500,000 consumers across its NeueCare and NeueSolutions segments, expecting to end the year at or above the high end of this range. NeueHealth also projects an adjusted operating cost ratio of 15% to 16%, excluding corporate costs, and expects to be at the low end of this range by year-end.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
