Clover Health Raises Full-Year Guidance as Q2 Medicare Advantage Membership Jumps 48%
Clover Health Investments (NASDAQ:CLOV) delivered a second-quarter earnings report that underscored the company's push toward sustainable profitability, with Medicare Advantage membership climbing 48% and revenue rising 56%. The results also led management to lift its full-year 2026 outlook, citing improved medical cost trends and continued adoption of its Clover Assistant clinical platform.
Chief Executive Officer Andrew Toy said Clover Assistant remains the foundation of the company's clinical and financial strategy. The platform aggregates patient data to help physicians identify diseases earlier and manage chronic conditions more consistently, a model Clover believes can reduce hospitalizations and drive better outcomes over time.
For the quarter ended June 30, 2026, Clover said average Medicare Advantage membership reached 157,000, up 48% from a year earlier. Revenue increased to $743 million from roughly $477 million in the prior-year quarter. Adjusted selling, general and administrative expenses were $112 million, or 15% of revenue, an improvement of about 220 basis points.
The company reported adjusted EBITDA of $41 million for the quarter and GAAP net income of $28 million. Through the first six months of the year, adjusted EBITDA reached $81 million and GAAP net income was $55 million. Total first-half revenue rose by more than $550 million to $1.5 billion, while consolidated gross profit improved by $104 million.
Clover ended the quarter with $443 million in cash and investments and no outstanding debt. Cash flow from operations totaled $133 million for the first half, which Interim Chief Financial Officer Clay Thornton said gives the company ample capacity to self-fund future growth.
Based on the first-half performance, Clover raised its full-year 2026 guidance. Thornton said the updated outlook reflects confidence in the underlying business after six months of execution, though management remains disciplined because a large share of members are early in their care cycle and additional claims experience is likely to emerge during the year.
Management also laid out the expected quarterly shape of earnings. Gross profit should be stronger in the third quarter than in the fourth, in line with typical Medicare Advantage seasonality, while fourth-quarter investments are expected to rise, including spending related to the annual enrollment period. Adjusted EBITDA is projected to stay positive in the third quarter before returning to a seasonally typical loss in the fourth quarter.
A central theme of the analyst call was the improving economics of older membership cohorts. Toy said Clover has historically seen gross profit improve by about $70 per member per month as cohorts move from their first to second year. The 2025 membership cohort, representing roughly 21% of current members, is now in its second year and showing stronger results than in year one. Members who joined in 2026, about 28% of the total, are following the expected early-stage pattern, Thornton said.
With the 2025 cohort entering its third year in 2027 and the 2026 cohort moving into year two, Thornton said management's confidence in 2027 continues to build, even though the company has not issued formal guidance for that year.
Medical cost trends also came in better than expected. Inpatient utilization remained favorable, including among first-year members, while outpatient utilization peaked in March and moderated during the second quarter. Outpatient use remains elevated relative to prior years but is within the company's expectations. Clover also reported improved dental cost performance after changes to out-of-network dental claims management, along with better-than-expected Part D results in the first half.
On the regulatory front, Toy said that after a court order and a CMS recalculation, all of Clover's Medicare Advantage members are enrolled in plans rated 4.5 stars for payment year 2027. CMS has said it intends to appeal the district court decision. Toy said the higher rating gives Clover additional flexibility to reinvest in members and support growth, but he stressed that the rating does not create the company's underlying economics, which he attributes to Clover Assistant-driven cohort maturation.
Clover said it bid for 2027 based on the 4.5-star payment year and expects to be paid at that rating next year. Thornton said the company's bidding approach for 2027 remains consistent with the prior two years: offering a product it believes can grow profitably. Management also said it continues to assume competitive disruption in its core New Jersey and Georgia markets.
Looking further ahead, Toy said Clover is expanding its use of artificial intelligence beyond clinical decision support into insurance operations. The company believes AI can improve claims-processing speed and accuracy, support members, and lower administrative overhead over time.
Clover Health is a technology-driven healthcare company specializing in Medicare Advantage plans for seniors. Its proprietary Clover Assistant platform aggregates clinical and claims data from multiple sources to provide real-time insights for physicians and care teams, helping to personalize care pathways and support preventive interventions.
This article originally appeared on MarketBeat.