Alignment Healthcare, Inc. ((ALHC)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The latest earnings call from Alignment Healthcare, Inc. was marked by a positive sentiment, highlighting robust growth in membership, revenue, and profitability metrics. The company also reported improvements in star ratings and strategic investments aimed at future growth. However, the call also acknowledged industry disruptions and seasonal challenges, suggesting a need for cautious optimism moving forward.
Strong Health Plan Membership Growth
Alignment Healthcare reported a significant increase in health plan membership, which grew to 229,600 members, marking a 26% year-over-year rise. This growth is indicative of the company’s successful strategies in expanding its market presence and attracting new members.
Revenue and Profit Growth
The company achieved impressive financial results with total revenue for the third quarter of 2025 reaching $994 million, a 44% increase compared to the previous year. Additionally, adjusted gross profit saw a substantial 58% year-over-year increase, reaching $127 million, showcasing the company’s strong financial performance.
Improved Medical Benefit Ratio (MBR)
Alignment Healthcare’s consolidated MBR improved to 87.2%, reflecting a 120 basis point improvement over the prior year. This improvement underscores the company’s effective management of medical costs and operational efficiencies.
Adjusted EBITDA Performance
The company’s adjusted EBITDA was reported at $32 million, surpassing the high end of the adjusted EBITDA guidance. This performance highlights the company’s ability to exceed financial expectations and deliver strong operational results.
High Star Ratings for Health Plans
All of Alignment Healthcare’s health plan members are now in plans rated 4 stars or above for the rating year 2026. The company achieved notable performance in California and secured new 5-star contracts in North Carolina and Nevada, reflecting its commitment to quality and customer satisfaction.
Cash and Investments Position
The company ended the third quarter with a robust cash position, holding $644 million in cash, cash equivalents, and investments. This strong financial position provides the company with the flexibility to invest in growth opportunities and navigate industry challenges.
Increased Year-End Guidance
Alignment Healthcare raised its full-year revenue guidance to nearly $4 billion, with adjusted EBITDA guidance increased to between $90 million and $98 million. This upward revision reflects the company’s confidence in its continued growth and profitability.
Seasonal and Operational Challenges
The company anticipates higher utilization due to the seasonal impact of the flu and increased operating expenses in the fourth quarter. These challenges highlight the need for strategic planning to mitigate potential impacts on financial performance.
Potential Industry Disruption
Alignment Healthcare acknowledged significant disruption in the Medicare Advantage industry, necessitating a cautious approach to growth and profitability. This acknowledgment underscores the company’s awareness of external factors that could impact its operations.
Forward-Looking Guidance
During the third quarter of 2025, Alignment Healthcare exceeded the high end of all its guidance metrics, demonstrating strong performance and effective risk management. The company reported a 26% year-over-year growth in health plan membership, contributing to a 44% increase in total revenue. With an improved MBR and adjusted EBITDA significantly exceeding expectations, the company raised its full-year guidance, highlighting its ability to deliver strong results in the Medicare Advantage space.
In conclusion, Alignment Healthcare’s earnings call conveyed a positive sentiment with strong growth across key metrics. The company demonstrated robust financial performance and strategic investments for future growth. While acknowledging industry disruptions and seasonal challenges, Alignment Healthcare remains optimistic about its ability to navigate these hurdles and continue delivering value to its stakeholders.