Alignment Healthcare grows Q1 revenue to $927M, hires former MultiPlan CFO

Alignment Healthcare grows Q1 revenue to $927M, hires former MultiPlan CFO

Medicare Advantage (MA) insurtech Alignment Healthcare exceeded its high-end guidance for the first quarter, the company announced prior to a May 1 earnings call.

The company posted $926.9 million in revenue, up 47.5% year over year, and its membership grew to 217,500 enrollees. Adjusted gross profit came in at $107.2 million.

Alignment is still posting a net loss this quarter at $9.4 million. The insurer also had a net loss per share of five cents and a medical benefits ratio of 88.4%.

But in personnel moves, Thomas Freeman is stepping down as chief financial officer and transitioning to a new role as strategic advisor. He will be replaced by Jim Head, the former CFO for MultiPlan, which has rebranded to Claritev as the data analytics company tries to bat away lawsuits.

“I want to personally thank Thomas for his decade of tireless dedication and leadership, guiding us through our initial public offering and positioning us for long-term success,” said CEO John Kao in a statement. “His contributions helped guide Alignment’s financial growth from a local health plan to a nationally recognized leader in MA.

Freeman’s base salary will decrease from $580,000 to $290,000 starting in June, a 10-Q filing shows.

“At the same time, I am pleased to welcome Jim to the team,” said Kao. “His extensive experience and proven expertise in strategic finance, healthcare and business development make him the ideal leader to build on our strong foundation.

Head will receive a base salary of $600,000 and is eligible for a cash bonus and an annual equity grant with a target value of $2.5 million. He will also earn a one-time grant with a value of $2.5 million, with half restricted stock units and half performance share units.

The announcement follows the resignation of Chief Experience Officer Hakan Kardes this month. Kardes, whose last day is May 16, will be replaced by Aly Duzich. Arta Bakshandeh, M.D., was named president of AVA, the company's MA platform.

In January, Alignment sued the Centers for Medicare & Medicaid Services (CMS) over allegations the agency wrongly calculated its star ratings. CEO John Kao would not comment on the ongoing litigation

The company expects an adjusted EBITDA of $10 million to $18 million next quarter, and revenue of $950 million to $965 million. Alignment is expecting to see $38 million to $60 million adjusted EBITDA over the full year.

When asked about reports suggesting the CMS may limit the number of services subject to prior authorization, Freeman stressed the company’s motto is “more care, not less.”

“The way we look at it is, when we look at our auth and denial rates, we historically have been considerably below the national averages for MA,” he said.