Clover Health Investments (NASDAQ: CLOV) delivered its second consecutive profitable quarter tonight, beating earnings expectations and extending a streak of operational improvement that has quietly reshaped the Medicare Advantage insurer’s narrative.
Yet the stock’s initial reaction suggested investors remained skeptical about the durability of that turnaround. Revenue climbed to $478.0M, topping estimates of $468.3M, while the company posted adjusted net income of $17M and adjusted EBITDA of $17M. The real story, though, sits deeper: management is proving it can grow membership aggressively while maintaining profitability, a combination that has eluded many peers navigating a challenging reimbursement environment.
The Membership Engine Fires
Medicare Advantage enrollment jumped 32% year over year to 106,323 members, the clearest sign that Clover’s technology-first model is resonating with both brokers and beneficiaries. Revenue growth of 34% from the prior year quarter underscores how scale is driving top-line expansion. What matters here is that the company achieved this growth during what management called a “3.5 star payment year,” meaning reimbursement rates were compressed. That’s a meaningful distinction. Peers struggling with margin pressure often cut back on member acquisition. Clover accelerated it. Gross profit of $99.6M reflects the operating leverage embedded in the model, and I’d keep an eye on that metric. It’s the clearest indicator of whether the Clover Assistant technology platform is actually reducing claims and improving care outcomes at scale, or if membership gains are simply volume plays masking underlying cost creep.
Profitability Comes With Caveats
The adjusted EBITDA profit of $17M is real, but context matters. Operating loss of $10.6M shows the company is still burning cash on an operating basis before adjustments. SG&A expenses of $109.8M remain elevated relative to revenue, though management narrowed guidance to $335M to $345M for full-year 2025, a tightening from prior expectations. The GAAP net loss of $11M is a reminder that under strict accounting, profitability remains fragile. Management acknowledged “elevated cost trends” and uncertainty around Part D reimbursement changes as headwinds for the second half of 2025. That’s the caveat investors should absorb: near-term profitability is real, but industry-wide cost pressures could compress margins if the company can’t offset them with further operational efficiency.
Numbers Tell the Story
Key Figures
Revenue: $478.0M (vs. $468.3M expected); up 34% year over year
Adjusted Net Income: $17M (vs. loss expected)
Adjusted EBITDA: $17M (profitable)
GAAP Net Loss: $11M
Medicare Advantage Membership: 106,323 (up 32% year over year)
Gross Profit: $99.6M
Operating Loss: $10.6M
SG&A: $109.8M
The five-quarter earnings beat streak matters more than any single number. Clover has now exceeded expectations in Q2 FY25 by $0.0516 per share, following a $0.051 beat in Q1. That consistency signals execution, not luck. The company moved from a full-year 2024 loss of $0.10 per share to year-to-date profitability of $0.0839 in 2025. That’s a fundamental inflection.
Management Signals Confidence, With Caveats
CEO Andrew Toy framed the results as validation of the technology model. “We are proving that we can achieve sustained adjusted EBITDA profitability amid meaningful membership and revenue growth,” he said on the earnings call. Management also highlighted a clinical white paper on chronic obstructive pulmonary disease showing that Clover Assistant providers were correlated with 15% fewer hospitalizations and 18% fewer readmissions. That’s the differentiator management wants you to focus on: the Clover Assistant isn’t just a cost-cutting tool; it’s a clinical asset.
But Toy also acknowledged the Part D direct subsidy rate is “materially higher for 2026 than for 2025,” signaling the industry underestimated costs. That’s a warning, not a win.
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