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What changed in Alignment Healthcare, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Alignment Healthcare, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+106 added−444 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-27)

Top changes in Alignment Healthcare, Inc.'s 2024 10-K

106 paragraphs added · 444 removed · 76 edited across 2 sections

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−10 removed17 unchanged
Biggest changeIn the event of a cybersecurity incident, the CISO is equipped with a well-defined incident response plan. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. It em 2. Properties. Our corporate office is located in Orange, California at 1100 W.
Biggest changeIn the event of a cybersecurity incident, the CISO is equipped with a well-defined incident response plan. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
Our program is designed to include ongoing 64 assessment of our critical assets; detection and analysis of potential threats; timely management of identified security risks; and prompt remediation planning and implementation. To successfully operate and monitor our security readiness, we maintain a data security and privacy team with substantial real-world experience to detect and respond to cybersecurity threats.
Our program is designed to include ongoing assessment of our critical assets; detection and analysis of potential threats; timely management of identified security risks; and prompt remediation planning and implementation. To successfully operate and monitor our security readiness, we maintain a data security and privacy team with substantial real-world experience to detect and respond to cybersecurity threats.
MacLeod has served as our CISO since December 2022, has over 25 years of diverse leadership experience in the healthcare information space (including over 20 years as a certified information 65 systems security professional and chief information security officer) and holds advanced degrees in information technology management and computer science.
MacLeod has served as our CISO since December 2022, has over 26 years of diverse leadership experience in the healthcare information space (including over 20 years as a certified information systems security professional and chief information security officer) and holds advanced degrees in information technology management and computer science.
See “Risk Factors” beginning on page 27 of this Form 10-K. Engagement of Third Parties Our information security program is under nearly constant third-party review as part of Sarbanes-Oxley compliance and the HITRUST certification process, including independent third-party penetration testing of all information technology assets at least annually and assessment of our vulnerability to ransomware.
See “Risk Factors” beginning on page 13 of this Form 10-K. 47 Table of Contents Engagement of Third Parties Our information security program is under nearly constant third-party review as part of Sarbanes-Oxley compliance and the HITRUST certification process, including independent third-party penetration testing of all information technology assets at least annually and assessment of our vulnerability to ransomware.
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Town and Country Rd, Suite 1600, where we lease approximately 61,309 square feet of office space under a lease that terminates in July 2024 and March 2030. We subleased approximately 14,000 square feet of this space to a third party for a term ending in July 2024.
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We also have offices located in Raleigh, North Carolina; Las Vegas and Reno, Nevada; El Paso, Texas; Avondale, Sahuarita, and Tucson, Arizona; and Tampa and Venice, Florida. We also have small clinics located in Milpitas, Modesto and Downey, California; and Raleigh, North Carolina. We believe that our properties are generally suitable to meet our needs for the foreseeable future.
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In addition, to the extent we require additional space in the future, we believe that it would be readily available on commercially reasonable terms. Ite m 3. Legal Proceedings. We are from time to time subject to, and are presently involved in, litigation and other legal proceedings.
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We believe that there are no pending lawsuits or claims that, individually or in the aggregate, may have a material effect on our business, financial condition or operating results.
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The results of any future claims or proceedings cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and litigation costs, diversion of management resources, and other factors. It em 4. Mine Safety Disclosures. Not applicable. 66 PART II It em 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock has been traded under the symbol “ALHC” on the Nasdaq Global Select Market since our initial public offering on March 26, 2021. Prior to that time, there was no public market for our common stock.
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As of February 22, 2024, there were approximately 68 holders of record of our common stock. Dividend Policy We currently intend to retain all available funds and any future earnings to fund the development and growth of our business and to potentially repay any indebtedness and, therefore, we do not anticipate paying any cash dividends in the foreseeable future.
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Additionally, because we are a holding company, our ability to pay dividends on our common stock may be limited by restrictions on the ability of our subsidiaries to pay dividends or make distributions to us.
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Any future determination to pay dividends will be at the discretion of our Board, subject to compliance with covenants in current and future agreements governing our and our subsidiaries’ indebtedness, and will depend on our results of operations, financial condition, capital requirements and other factors that our Board may deem relevant.
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Our outstanding term loan restricts our ability to pay dividends. See the discussion of our term loan in “

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

72 edited+30 added−358 removed77 unchanged
Biggest changeAdjusted EBITDA is reconciled as follows: 73 Year Ended December 31, 2023 2022 (dollars in thousands) Net loss $ (148,173 ) $ (149,639 ) Less: Net loss attributable to noncontrolling interest 156 92 Adjustments: Interest expense 21,231 18,289 Depreciation and amortization 21,668 17,486 Income taxes (22 ) 339 Equity-based compensation (1) 66,835 81,718 Transaction-related expenses (2) — 579 Acquisition expenses (3) 977 1,614 Litigation costs and settlement (4) 2,298 — (Gain) loss on ROU assets (5) (289 ) 611 Loss on extinguishment of debt — 2,196 Adjusted EBITDA $ (35,319 ) $ (26,715 ) (1) Represents equity-based compensation related to grants made in the applicable year, as well as equity-based compensation related to the timing of the IPO, which includes previously issued stock appreciation rights ("SARs") liability awards, modifications related to transaction vesting units, and grants made in conjunction with the IPO.
Biggest changeAdjusted EBITDA is reconciled as follows: Year Ended December 31, 2024 2023 (dollars in thousands) Net loss $ (128,071) $ (148,173) Less: Net loss attributable to noncontrolling interest 36 156 Adjustments: Interest expense 23,547 21,231 Depreciation and amortization (1) 27,062 21,668 Income tax expense (benefit) 21 (22) Equity-based compensation (2) 71,132 66,835 Acquisition expenses (3) 26 977 Litigation costs (4) 2,069 2,298 (Gain) loss on ROU assets (5) 143 (289) Gain on sale of property and equipment (9) — Restructuring costs (6) 2,363 — Loss on extinguishment of debt 3,020 — Adjusted EBITDA $ 1,339 $ (35,319) (1) Includes $0.6 million in impairment expense related to intangible assets that were written off during the year (2) Represents equity-based compensation related to grants made in the applicable year, as well as equity-based compensation related to the timing of the IPO, which includes previously issued stock appreciation rights ("SARs") liability awards, modifications related to transaction vesting units, and grants made in conjunction with the IPO (3) Represents acquisition-related fees, such as legal and advisory fees, that are non-capitalizable (4) Represents certain litigation costs considered outside of the ordinary course of business based on the following considerations which we assess regularly: (i) the frequency of similar cases that have been brought to date, or are expected to be brought within two years, (ii) complexity of the case, (iii) nature of the remedies sought, (iv) litigation posture of the Company, (v) counterparty involved, and (vi) the Company's overall litigation strategy (5) Represents gains or losses related to ROU assets that were terminated or subleased in the respective period (6) Represents severance and related costs incurred as part of a corporate restructuring, that took place during 2024, designed to streamline our organizational structure and drive operational efficiencies Results of Operations We operate and manage our business as a single reporting and operating segment, which is to provide healthcare services to our seniors.
We may also provide enhanced benefits at our own expense. We recognize revenue for providing this insurance coverage in the month that members are entitled to receive healthcare services. Our CMS payment 74 related to Medicare Part D is subject to risk sharing through the Medicare Part D risk corridor provisions. See “— Critical Accounting Estimates — Revenue” below .
We may also provide enhanced benefits at our own expense. We recognize revenue for providing this insurance coverage in the month that members are entitled to receive healthcare services. Our CMS payment related to Medicare Part D is subject to risk sharing through the Medicare Part D risk corridor provisions. See “— Critical Accounting Estimates — Revenue” below .
We include in our IBNP an estimate for medical claims liability under moderately adverse conditions, which represents the risk of adverse deviation of the estimates in its actuarial method of reserving. 81 We believe that medical expenses payable is adequate to cover future claims payments required. However, such estimates are based on knowledge of current events and anticipated future events.
We include in our IBNP an estimate for medical claims liability under moderately adverse conditions, which represents the risk of adverse deviation of the estimates in its actuarial method of reserving. We believe that medical expenses payable is adequate to cover future claims payments required. However, such estimates are based on knowledge of current events and anticipated future events.
Pharmacy costs represent payments for members’ prescription drug benefits, net of rebates from drug manufacturers. Receivables for such pharmacy rebates are included in accounts receivable in the consolidated balance sheet. Selling, General and Administrative Expenses.
Pharmacy costs represent payments for members’ prescription drug benefits, net of rebates from drug manufacturers. Receivables for such manufacturer rebates are included in accounts receivable in the consolidated balance sheet. Selling, General and Administrative Expenses.
The amounts payable under this provision were immaterial at December 31, 2023 and December 31, 2022. The premiums we receive from CMS for our members are based on the annual bid that we submit to CMS. These payments represent revenues for providing healthcare coverage, including Medicare Part D benefits. Under the Medicare Part D program, members receive standard drug benefits.
The amounts payable under this provision were immaterial at December 31, 2024 and December 31, 2023. The premiums we receive from CMS for our members are based on the annual bid that we submit to CMS. These payments represent revenues for providing healthcare coverage, including Medicare Part D benefits. Under the Medicare Part D program, members receive standard drug benefits.
Other states in which our health plans or risk bearing entities operate have chosen not to adopt the RBC rules, but instead have designed and implemented their own rules regarding capital adequacy. As of December 31, 2023, our health plans or risk-bearing entities were in compliance with the minimum capital requirements.
Other states in which our health plans or risk bearing entities operate have chosen not to adopt the RBC rules, but instead have designed and implemented their own rules regarding capital adequacy. As of December 31, 2024, our health plans or risk-bearing entities were in compliance with the minimum capital requirements.
Management considers these accounting policies to be critical accounting policies. The estimates and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.
The estimates and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances. The significant accounting policies which we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described below.
In aggregate, more than 90% of our health plan members are enrolled in plans rated 4 stars and above, meaning the vast majority of members consistently receive a high-quality care experience, as defined under CMS star measurement criteria.
In aggregate, more than 98% of our health plan members are enrolled in plans rated 4 stars and above, meaning the vast majority of members consistently receive a high-quality care experience, as defined under CMS star measurement criteria.
We experience the largest portion of member growth during the first quarter, when plan enrollment selections made during the annual enrollment period ("AEP") from October 15th through December 7th of the prior year take effect. As a result, we expect to see a majority of our member growth occur on January 1 of a given calendar year.
We experience the largest portion of member growth during the first quarter, when plan enrollment selections made during the annual enrollment period ("AEP") from October 15th through December 7th of the prior year take effect. As a result, we expect to see a significant percentage of our member growth occur on January 1 of a given calendar year.
These incentives impact financial performance in the year following the CMS Rating Year (for example, CMS’s announcement of the 2024 Ratings occurred in the second half of 2023 and will impact our financial performance in 2025).
These incentives impact financial performance in the year following the CMS Rating Year (for example, CMS’s announcement of the 2025 Ratings occurred in the second half of 2024 and will impact our financial performance in 2026).
To combat the healthcare cost increases that typically result, we proactively look to (i) connect with our population early in their enrollment with Alignment to assess their care needs, (ii) develop care plans and engage those members with more chronic, complex health challenges in our clinical model, and (iii) continue to monitor and evaluate our healthier members in a preventative fashion over time.
To combat the healthcare cost increases that typically result, we proactively look to (i) connect with our population early in their enrollment with Alignment to assess 53 Table of Contents their care needs, (ii) develop care plans and engage those members with more chronic, complex health challenges in our clinical model, and (iii) continue to monitor and evaluate our healthier members in a preventative fashion over time.
For discussion of 2021 items and year-over-year comparisons between 2022 and 2021 that are not included in this Form 10-K, refer to Item 7.
For discussion of 2022 items and year-over-year comparisons between 2023 and 2022 that are not included in this Form 10-K, refer to Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" found in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on February 28, 2023. Overview Alignment is a next generation, consumer-centric platform designed to improve the healthcare experience for seniors.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" found in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 27, 2024. Overview Alignment is a next generation, consumer-centric platform designed to improve the healthcare experience for seniors.
Moderately adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of estimate. In many situations, the claims amount ultimately settled will be different than the estimate that satisfies the Actuarial Standards of Practice.
Moderately adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of estimate. 64 Table of Contents In many situations, the claims amount ultimately settled will be different than the estimate that satisfies the Actuarial Standards of Practice.
These expenses also include certain growth expenditures, including business development and various new market expansion activities. Our investments in our sales, marketing and other growth activities are an important component of our selling, general and administrative expenses in a typical year given our desire to continue to grow on an accelerated trajectory.
These expenses also include restructuring costs, as discussed above, and certain growth expenditures, including business development and various new market expansion activities. Our investments in our sales, marketing and other growth activities are an important component of our selling, general and administrative expenses in a typical year given our desire to continue to grow on an accelerated trajectory.
Pursuant to the Oxford Loan Agreement, the Borrower received an initial Term Loan of $165.0 million on the Effective Date and may borrow up to an additional $85.0 million of Term Loans at its option (such additional Term Loans, the “Delayed Draw Term Loans”).
Pursuant to the Oxford Loan Agreement, the Borrower received an initial Term Loan of $165.0 million on the Effective Date and had the option to borrow up to an additional $85.0 million of Term Loans (such additional Term Loans, the “Delayed Draw Term Loans”).
Medical expenses payable also includes an estimate for the costs necessary to process unpaid claims at the end of each period. We estimate the IBNR liability using actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice.
IBNR is estimated using an actuarial process that is consistently applied and centrally controlled. Medical expenses payable also includes an estimate for the costs necessary to process unpaid claims at the end of each period. We estimate IBNR liability using actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice.
Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net loss before interest expense, income taxes, depreciation and amortization expense, transaction-related expenses, acquisition expenses, certain litigation costs and settlements, gains or losses on right of use ("ROU") assets, equity-based compensation expense and loss on extinguishment of debt.
Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure that we define as net loss before interest expense, income taxes, depreciation and amortization expense, acquisition expenses, certain litigation costs, gains or losses on right of use ("ROU") assets, gains or losses on sale of property and equipment, restructuring costs, equity-based compensation expense and loss on extinguishment of debt.
Liquidity and Capital Resources General To date, we have financed our operations principally through our IPO, private placements of our equity securities, revenues, and certain term loans (described below). As of December 31, 2023, we had $318.8 million in cash, cash equivalents and short-term investments. We operate as a holding company in a highly regulated industry.
Liquidity and Capital Resources General To date, we have financed our operations principally through our IPO, private placements of our equity securities, revenues, certain term loans and convertible notes (described below). As of December 31, 2024, we had $470.7 million in cash, cash equivalents and short-term investments. We operate as a holding company in a highly regulated industry.
The following table illustrates the sensitivity of these factors and the estimated potential impact on our medical expenses payable estimates for the most recent two months as of December 31, 2023: Medical Cost PMPM Quarterly Trend Increase (Decrease) In Medical Expenses Payable Increase (Decrease) in Factors (in thousands) 3% $ 3,804 2 2,536 1 1,268 (1) (1,268 ) (2) (2,536 ) (3) (3,804 ) Each period, we re-examine previously established IBNR estimates based on actual claim submissions and other changes in facts and circumstances.
The following table illustrates the sensitivity of these factors and the estimated potential impact on our medical expenses payable estimates for the most recent two months as of December 31, 2024: Medical Cost PMPM Quarterly Trend Increase (Decrease) in Medical Expenses Payable Increase (Decrease) in Factors (in thousands) (3)% $ (6,300) (2) (4,200) (1) (2,100) 1 2,100 2 4,200 3 6,300 Each period, we re-examine previously established IBNR estimates based on actual claim submissions and other changes in facts and circumstances.
In accordance with these arrangements, we assume the responsibility for the outcomes and the economic risk of funding our members’ health care, supplemental benefits and related administration costs. We recognize premium revenue in the month that members are entitled to receive health care services, and premiums collected in advance are deferred.
In accordance with this arrangement, we assume the responsibility for the outcomes and the economic risk of funding our members’ healthcare, supplemental benefits and related administration costs. We recognize premium revenue in the month that members are entitled to receive healthcare services, and premiums collected in advance are deferred.
The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes, which appear elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion should be read in conjunction with the consolidated financial statements and accompanying notes, which appear elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties.
Medical Expenses Payable Medical expenses payable includes estimates of our obligations for medical care services that have been rendered on behalf of our members and the members of third-party payors, but for which claims have either not yet been received or processed, loss adjustment expense reserve for the expected costs of settling these claims, and for liabilities related to physician, hospital and other medical cost disputes.
Medical Expenses Payable Medical expenses payable includes estimates of our obligations for medical care services that have been rendered on behalf of our members and the members of third-party payors, but for which claims have either not yet been received or processed, loss adjustment expense reserve for the expected costs of settling these claims, and for liabilities related to physician, hospital and other medical cost disputes. 63 Table of Contents We develop estimates for medical expenses incurred but not yet paid (“IBNP”) which includes an estimate for claims incurred but not reported (“IBNR”) and a payable for adjudicated claims.
The adjustments are estimated by projecting the ultimate annual premium and are recognized ratably during the year, with adjustments in each period to the amount of revenue recognized to reflect changes in the estimated ultimate premium. Premiums are also recorded net of estimated uncollectible amounts and retroactive membership adjustments.
The adjustments are estimated by projecting the ultimate annual premium and are recognized ratably during the year, with adjustments in each period to the amount of revenue recognized to reflect changes in the estimated ultimate premium.
Due to the competitive nature of CMS’s bidding system, only those plans that are able to provide low cost and high-quality outcomes will be able to offer enhanced benefit options, which is critical to achieving sustainable membership and growth on a long-term basis.
Medicare Advantage plans are eligible to receive additional economic incentives based on their Star rating. 52 Table of Contents Due to the competitive nature of CMS’s bidding system, only those plans that are able to provide low cost and high-quality outcomes will be able to offer enhanced benefit options, which is critical to achieving sustainable membership and growth on a long-term basis.
Interest on the Term Loans is a variable rate equal to (i) the secured overnight financing rate administered by the Federal Reserve Bank of New York for a one-month tenor, subject to a floor of 1.00%, plus (ii) an applicable margin of 6.50%.
Interest on the Term Loans was a variable rate equal to (i) the secured overnight financing rate administered by the Federal Reserve Bank of New York for a one-month tenor, subject to a floor of 1.00%, plus (ii) an applicable margin of 6.50%. The interest rate applied during the year ended December 31, 2024 ranged from 11.35% to 11.84%.
The following table illustrates the sensitivity of these factors and the estimated potential impact on our medical expenses payable estimates for those periods as of December 31, 2023: Completion Factors Increase (Decrease) In Medical Expenses Payable (Decrease) Increase in Factors (in thousands) (3)% $ 14,616 (2) 9,744 (1) 4,872 1 (4,872 ) 2 (9,744 ) 3 (14,616 ) Medical Cost Per Member Per Month Trend Factors .
The following table illustrates the sensitivity of these factors and the estimated potential impact on our medical expenses payable estimates for those periods as of December 31, 2024: Completion Factors Increase (Decrease) in Medical Expenses Payable Increase (Decrease) in Factors (in thousands) (3)% $ 24,600 (2) 16,400 (1) 8,200 1 (8,200) 2 (16,400) 3 (24,600) Medical Cost Per Member Per Month Trend Factors .
CMS further measures Medicare Advantage beneficiaries’ clinical outcomes and experience with their health plans and the healthcare system through a Five Star Quality Rating System. Medicare Advantage plans are eligible to receive additional economic incentives based on their Star rating.
CMS further measures Medicare Advantage beneficiaries’ clinical outcomes and experience with their health plans and the healthcare system through a Five Star Quality Rating System.
Depreciation and amortization expenses are primarily attributable to our capital investment and consist of fixed asset depreciation, amortization of intangibles considered to have definite lives and amortization of capitalized internal-use software costs. Other Expense Interest Expense. Interest expense consists primarily of interest payments on our outstanding borrowings under our Term Loan (as defined below).
Depreciation and amortization expenses are primarily attributable to our capital investment and consist of fixed asset depreciation, amortization of intangibles considered to have definite lives and amortization of capitalized internal-use software costs. Other Expense Interest Expense.
In addition, we expect our corporate, general and administrative expenses to increase in absolute dollars for the foreseeable future to support our growth and because of additional costs of being a public company.
In addition, we expect our corporate, general and administrative expenses to increase in absolute dollars for the foreseeable future to support our growth.
There are a number of limitations related to the use of Adjusted EBITDA in lieu of net loss, which is the most directly comparable financial measure calculated in accordance with GAAP.
Adjusted EBITDA should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA in lieu of net loss, which is the most directly comparable financial measure calculated in accordance with GAAP.
Investing Activities For the year ended December 31, 2023, net cash used in investing activities was $147.3 million, an increase of $119.1 million compared to net cash used in investing activities of $28.2 million for the year ended December 31, 2022.
Investing Activities For the year ended December 31, 2024, net cash provided by investing activities was $39.2 million, an increase of $186.5 million compared to net cash used in investing activities of $147.3 million for the year ended December 31, 2023.
We have contracts with a network of hospitals, physicians, and other providers and compensate those providers and ancillary organizations based on contractual arrangements or CMS Medicare compensation guidelines.
Medical expenses also include clinical depreciation and restructuring costs, as discussed above. We have contracts with a network of hospitals, physicians, and other providers and compensate those providers and ancillary organizations based on contractual arrangements or CMS Medicare compensation guidelines.
Depreciation and amortization expense was $21.4 million and $17.3 million for the years ended December 31, 2023 and 2022, respectively, an increase of $4.1 million, or 24.0%. The increase was primarily due to the amount and timing of our capital expenditures and the associated depreciation relative to 2022. Other Expenses Interest expense.
Depreciation and amortization expense was $26.9 million and $21.4 million for the years ended December 31, 2024 and 2023, respectively, an increase of $5.5 million, or 25.5%. The increase was primarily due to the amount and timing of our capital expenditures and the associated depreciation relative to 2023.
Industry projections have forecasted a continued increase in the Medicare Advantage penetration rate from approximately 51% to approximately 62% by 2033. 69 Medicare Advantage allows one entity to influence the entirety of a senior’s healthcare through a singular, direct-to-consumer product.
In 2024, approximately 54% of the Medicare eligible population, or approximately 33 million seniors, were enrolled in a Medicare Advantage plan. Industry projections have forecasted a continued increase in the Medicare Advantage penetration rate from approximately 54% to approximately 64% by 2033. Medicare Advantage allows one entity to influence the entirety of a senior’s healthcare through a singular, direct-to-consumer product.
We recognize premium revenue in the month that members are entitled to receive healthcare services, and premiums collected in advance are deferred. The monthly premium that we receive under our contract with CMS includes a PMPM which is adjusted based on certain risk factors derived from medical diagnoses for our members.
The monthly premium that we receive under our contract with CMS includes a PMPM which is adjusted based on certain risk factors derived from medical diagnoses for our members.
Given our intent to continue to invest in our platform and the scalability of our business in the short to medium-term, we believe Adjusted EBITDA over the long term will be an important indicator of value creation. Adjusted EBITDA should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP.
Given our intent to continue to invest in our 55 Table of Contents platform and the scalability of our business in the short to medium-term, we believe Adjusted EBITDA over the long term will be an important indicator of value creation.
(2) Includes fixed, minimum and estimated payments under our existing contractual obligations that are legally enforceable and binding for goods and services. These obligations include agreements that are cancelable with the payment of an early termination penalty and other funding commitments that require fixed or minimum levels of service to be purchased with a specific timing established.
These obligations include agreements that are cancelable with the payment of an early termination penalty and other funding commitments that require fixed or minimum levels of service to be purchased with a specific timing established. Purchase obligations exclude agreements that are cancelable without penalty.
Year Ended December 31, (dollars in thousands) 2023 2022 Net cash used in operating activities $ (59,187 ) $ (45,427 ) Net cash used in investing activities (147,263 ) (28,217 ) Net cash provided by financing activities 105 16,593 Net change in cash (206,345 ) (57,051 ) Cash, cash equivalents and restricted cash at beginning of period 411,299 468,350 Cash, cash equivalents and restricted cash at end of period $ 204,954 $ 411,299 Operating Activities For the year ended December 31, 2023, net cash used in operating activities was $59.2 million, an increase of $13.8 million compared to net cash used in operating activities of $45.4 million for the year ended December 31, 2022.
Year Ended December 31, (dollars in thousands) 2024 2023 Net cash provided by (used in) operating activities $ 34,770 $ (59,187) Net cash provided by (used in) investing activities 39,191 (147,263) Net cash provided by financing activities 156,028 105 Net change in cash 229,989 (206,345) Cash, cash equivalents and restricted cash at beginning of period 204,954 411,299 Cash, cash equivalents and restricted cash at end of period $ 434,943 $ 204,954 Operating Activities For the year ended December 31, 2024, net cash provided by operating activities was $34.8 million, an increase of $94.0 million compared to net cash used in operating activities of $59.2 million for the year ended December 31, 2023.
As we grow, we continue to listen to and incorporate member feedback, and we are able to further enhance benefits and produce strong clinical outcomes. Our virtuous cycle, based on the principle of doing well by doing good, is highly repeatable and a core tenet of our ability to continue to expand in existing and new markets in the future.
Our virtuous cycle, based on the principle of doing well by doing good, is highly repeatable and a core tenet of our ability to continue to expand in existing and new markets in the future.
Our recognized premium revenue for the Alignment Health Plans is subject to a minimum annual medical loss ratio (“MLR”) of 85%. The MLR represents medical costs as a percentage of premium revenue.
Premiums are also recorded net of estimated uncollectible amounts and retroactive membership adjustments. 56 Table of Contents Our recognized premium revenue for the Alignment Health Plans is subject to a minimum annual medical loss ratio (“MLR”) of 85%. The MLR represents medical costs as a percentage of premium revenue.
In 2023, we expanded into 14 markets across our six existing states, and in 2024, we expanded into one new market in California. 70 • Provide Superior Service, Care and Consumer Satisfaction: We are highly focused on providing superior service and care to our members and on maintaining high levels of consumer satisfaction, which are key to our financial performance and growth.
Since 2020, we have expanded into 29 markets and four states. • Provide Superior Service, Care and Consumer Satisfaction: We are highly focused on providing superior service and care to our members and on maintaining high levels of consumer satisfaction, which are key to our financial performance and growth.
Our capitation revenue consists primarily of capitated fees for medical care services provided by us under arrangements with our third-party payors and from CMS related to our Direct Contracting Entity ("DCE").
Our capitation revenue consists primarily of capitated fees for medical care services provided by us under arrangements with our third-party payors and from CMS related to our ACO REACH entity. In 2024, we entered into a management services and risk management agreement with a third-party healthcare company.
Adjusted Gross Profit and Medical Benefits Ratio Adjusted gross profit is a non-GAAP financial measure that we define as net loss from operations before depreciation and amortization, clinical equity-based compensation expense, and selling, general, and administrative expenses.
It also excludes approximately 8,300 and 7,300 ACO REACH members as of December 31, 2024 and December 31, 2023, respectively. Adjusted Gross Profit and Medical Benefits Ratio Adjusted gross profit is a non-GAAP financial measure that we define as loss from operations before depreciation and amortization, clinical equity-based compensation expense, clinical restructuring costs and selling, general, and administrative expenses.
We may incur operating losses in the future due to the investments we intend to continue to make in expanding our operations and sales and marketing, in further developing our technology and due to the general and administrative costs we expect to incur in connection with continuing to operate as a public company.
As of December 31, 2024, our operating parent company (an indirect wholly owned subsidiary of our parent company) had $212.3 million in cash, cash equivalents and short-term investments. 60 Table of Contents We may incur operating losses in the future due to the investments we intend to continue to make in expanding our operations and sales and marketing, in further developing our technology and due to the general and administrative costs we expect to incur in connection with continuing to operate as a public company.
Financing Activities For the year ended December 31, 2023, net cash provided by financing activities was $0.1 million, a decrease of $16.5 million compared to net cash provided by financing activities of $16.6 million for the year ended December 31, 2022.
Financing Activities For the year ended December 31, 2024, net cash provided by financing activities was $156.0 million, an increase of $155.9 million compared to net cash provided by financing activities of $0.1 million for the year ended December 31, 2023.
Medical expenses were $1,622.6 million and $1,249.9 million for the years ended December 31, 2023 and 2022, respectively, an increase of $372.7 million, or 29.8%. The increase was driven primarily by the growth in Alignment Health Plan membership, as well as growth in ACO REACH membership.
Medical expenses were $2,406.9 million and $1,622.6 million for the years ended December 31, 2024 and 2023, respectively, an increase of $784.3 million, or 48.3%. The increase was driven primarily by the growth in Alignment Health Plan membership, which increased 58.6% between December 31, 2024 and December 31, 2023.
Other (income) expenses consist primarily of gains or losses on the disposition of assets. 75 The following table sets forth our consolidated statements of operations data for the periods indicated: Years Ended December 31, 2023 2022 (dollars in thousands) Revenues: Earned premiums $ 1,800,933 $ 1,431,550 Other 22,697 2,609 Total revenues 1,823,630 1,434,159 Expenses: Medical expenses 1,622,600 1,249,879 Selling, general, and administrative expenses 307,433 295,646 Depreciation and amortization 21,414 17,273 Total expenses 1,951,447 1,562,798 Loss from operations (127,817 ) (128,639 ) Other expenses: Interest expense 21,231 18,289 Other expenses (income) (853 ) 176 Loss on extinguishment of debt — 2,196 Total other expenses 20,378 20,661 Loss before income taxes (148,195 ) (149,300 ) Provision for income taxes (22 ) 339 Net loss $ (148,173 ) $ (149,639 ) Less: Net loss attributable to noncontrolling interest 156 92 Net loss attributable to Alignment Healthcare, Inc. $ (148,017 ) $ (149,547 ) The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenues for the periods indicated: Years Ended December 31, 2023 2022 (% of revenue) Revenues: Earned premiums 99 % 100 % Other 1 — Total revenues 100 100 Expenses: Medical expenses 89 87 Selling, general and administrative expenses 17 21 Depreciation and amortization 1 1 Total expenses 107 109 Loss from operations (7 ) (9 ) Other expenses: Interest expense 1 1 Other expenses (income) — — Loss on extinguishment of debt — — Total other expenses 1 1 Loss before income taxes (8 ) (10 ) Provision for income taxes — — Net loss (8 ) (10 )% Less: Net loss attributable to noncontrolling interest — — Net loss attributable to Alignment Healthcare, Inc.
Other (income) expenses consist primarily of gains or losses on the disposition of assets, as well as gains and losses related to subleased ROU assets. 57 Table of Contents The following table sets forth our consolidated statements of operations data for the periods indicated: Year Ended December 31, 2024 2023 (dollars in thousands) Revenues: Earned premiums $ 2,671,931 $ 1,800,933 Other 31,630 22,697 Total revenues 2,703,561 1,823,630 Expenses: Medical expenses 2,406,870 1,622,600 Selling, general, and administrative expenses 371,374 307,433 Depreciation and amortization 26,872 21,414 Total expenses 2,805,116 1,951,447 Loss from operations (101,555) (127,817) Other expenses: Interest expense 23,547 21,231 Other (income) expenses, net (72) (853) Loss on extinguishment of debt 3,020 — Total other expenses 26,495 20,378 Loss before income taxes (128,050) (148,195) Provision for income tax expense (benefit) 21 (22) Net loss $ (128,071) $ (148,173) Less: Net loss attributable to noncontrolling interest 36 156 Net loss attributable to Alignment Healthcare, Inc. $ (128,035) $ (148,017) 58 Table of Contents The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenues for the periods indicated: Year Ended December 31, 2024 2023 (% of revenue) Revenues: Earned premiums 99 % 99 % Other 1 1 Total revenues 100 100 Expenses: Medical expenses 89 89 Selling, general and administrative expenses 14 17 Depreciation and amortization 1 1 Total expenses 104 107 Loss from operations (4) (7) Other expenses: Interest expense 1 1 Other (income) expenses, net — — Loss on extinguishment of debt — — Total other expenses 1 1 Loss before income taxes (5) (8) Provision for income taxes — — Net loss (5) (8) Less: Net loss attributable to noncontrolling interest — — Net loss attributable to Alignment Healthcare, Inc.
We anticipate continuing to invest heavily in our growth efforts in the near future, which we believe will be an important driver of long-term value creation. We expect selling, general and administrative expenses to increase in absolute dollars as we incur costs associated with being a public company and growing our business. Depreciation and Amortization .
We anticipate continuing to invest heavily in our growth efforts in the near future, which we believe will be an important driver of long-term value creation. Depreciation and Amortization .
Additionally, there was a $0.6 million loss recorded on ROU assets for the year ended December 31, 2022. Loss on extinguishment of debt. During the year ended December 31, 2022 we recorded a $2.2 million loss on extinguishment of debt due to the write-off of debt issuance costs related to our debt refinance discussed below.
During the year ended December 31, 2024 we recorded a $3.0 million loss on extinguishment of debt due to the write-off of debt issuance costs related to the Oxford term loans repayment which is discussed below.
Overall, medical expenses for the year December 31, 2023 grew at a higher rate than earned premium revenues compared to the year ended December 31, 2022 primarily due to a mix shift of revenue growth with ACO REACH patients, richer member benefits, a smaller amount of favorable prior year development, and increases in unit costs. Selling, General and Administrative Expenses.
Overall, medical expenses for the year ended December 31, 2024 grew at a slightly higher rate than earned premium revenues compared to the year ended December 31, 2023, primarily due to 2024 having a higher percentage of new members relative to returning members, richer member benefits and increases in unit costs.
This metric excludes third party payor members with respect to which we are at-risk for managing their healthcare expenditures, which represented 400 members and 500 members as of December 31, 2023 and December 31, 2022, respectively.
We believe this is an important metric to assess growth of our underlying business, which is indicative of our ability to consistently offer a superior value proposition to seniors. This metric excludes third-party payor members with respect to which we are at-risk for managing their healthcare expenditures, which represented 400 members as of December 31, 2024 and December 31, 2023.
Year Ended December 31, (dollars in '000's, except percentages) 2023 2022 % Change Health plan membership (at period end) 119,200 98,400 21.1 % Medical benefits ratio 88.5 % 86.5 % 2.0 % Revenues $ 1,823,630 $ 1,434,159 27.2 % Loss from Operations $ (127,817 ) $ (128,639 ) NM (2) Net loss $ (148,173 ) $ (149,639 ) NM (2) Adjusted EBITDA (1) $ (35,319 ) $ (26,715 ) 32.2 % Adjusted gross profit (1) $ 208,825 $ 193,621 7.9 % (1) See "Adjusted EBITDA" and "Adjusted Gross Profit" below for reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.
Year Ended December 31, (dollars in '000's, except percentages) 2024 2023 % Change Health plan membership (at period end) 189,100 119,200 58.6 % Medical benefits ratio 88.8 % 88.5 % 0.3 % Revenues $ 2,703,561 $ 1,823,630 48.3 % Loss from Operations $ (101,555) $ (127,817) 20.5 % Net loss $ (128,071) $ (148,173) 13.6 % Adjusted EBITDA (1) $ 1,339 $ (35,319) 103.8 % Adjusted gross profit (1) $ 302,607 $ 208,825 44.9 % (1) See "Adjusted EBITDA" and "Adjusted Gross Profit" below for reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures. 54 Table of Contents Health Plan Membership We define Health Plan Membership as the number of members enrolled in our HMO and PPO contracts as of the end of a reporting period.
Earned premium revenues were $1,800.9 million and $1,431.6 million for the years ended December 31, 2023 and 2022, respectively, an increase of $369.4 million or 25.8%. The increase was driven by a combination of growth in our Health Plan membership and higher revenue per member per month in 2023 as compared to 2022.
Earned premium revenues were $2,671.9 million and $1,800.9 million for the years ended December 31, 2024 and 2023, respectively, an increase of $871.0 million or 48.4%. The increase was primarily driven by growth in our Health Plan membership, which increased 58.6% between December 31, 2024 and December 31, 2023.
All intercompany transactions have been eliminated in consolidation. Noncontrolling interest is presented within the equity section of our consolidated balance sheets. Certain accounting policies involve significant judgments and assumptions by management, which have a material impact on the carrying value of assets and liabilities and the recognition of income and expenses.
Certain accounting policies involve significant judgments and assumptions by management, which have a material impact on the carrying value of assets and liabilities and the recognition of income and expenses. Management considers these accounting policies to be critical accounting policies.
The increase is mainly attributable to an increase in the interest rate of our interest earning cash balances.
Other revenues increased $8.9 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase is mainly attributable to an increase in the interest rate of our interest earning cash balances.
Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP and include the accounts of our wholly owned subsidiaries and three variable interest entities (“VIEs”) in California and North Carolina that meet the consolidation requirements for accounting purposes.
GAAP and include the accounts of our wholly owned subsidiaries and three variable interest entities (“VIEs”) in California and North Carolina that meet the consolidation requirements for accounting purposes. All intercompany transactions have been eliminated in consolidation. Noncontrolling interest is presented within the equity section of our consolidated balance sheets.
Other (income) expenses were $(0.9) million and $0.2 million for the years ended December 31, 2023 and 2022, respectively, an increase of $1.1 million. The increase in income was primarily due to a gain related to ROU assets that 77 were terminated during the year ended December 31, 2023.
Other (income) expenses were $(0.1) million and $(0.9) million for the years ended December 31, 2024 and 2023, respectively, a decrease of $0.8 million. The decrease is primarily attributable to the timing of gains and losses related to ROU assets subleased during the respective periods. Loss on extinguishment of debt.
Recent Accounting Pronouncements See Note 2 to our audited consolidated financial statements “ Summary of Significant Accounting Policies—Recent Accounting Pronouncements Adopted ” for more information. Ite m 7A. Quantitative and Qualitative Disclosures About Market Risk. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.
Recent Accounting Pronouncements See Note 2 to our audited consolidated financial statements “ Summary of Significant Accounting Policies—Recent Accounting Pronouncements Adopted ” for more information.
Interest expense was $21.2 million and $18.3 million for the years ended December 31, 2023 and 2022, respectively, an increase of $2.9 million or 16.1%. The increase in interest expense was primarily due to a higher interest rate on our debt balance. Other (income) expenses .
Interest expense was $23.5 million and $21.2 million for the years ended December 31, 2024 and 2023, respectively, an increase of $2.3 million or 10.8%. The increase in interest expense was partially due to an increase in the debt balance as a result of the $50.0 million drawdown of the Oxford Delayed Draw term loan in June 2024.
As a result of this arrangement, we will act as an agent in controlling the services provided to its members and revenue will be recorded on a net basis. • Drive Growth and Consistent Outcomes Through New Market Expansion: We enter new markets with the goal of building brand awareness across our key stakeholders to achieve meaningful market share over time.
According to CMS data, our approximately 209,900 Health Plan Members represent only 5% market share of Medicare Advantage enrollees in our markets. • Drive Growth and Consistent Outcomes Through New Market Expansion: As part of our long-term growth strategy, we may enter new markets with the goal of building brand awareness across our key stakeholders to achieve meaningful market share over time.
Purchase obligations exclude agreements that are cancelable without penalty. Not included in the table above are our medical expenses payable which are included within current liabilities in our financial statements included in this Annual Report on Form 10-K.
Not included in the table above are our medical expenses payable which are included within current liabilities in our financial statements included in this Annual Report on Form 10-K. Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S.
The decrease in net cash provided by financing activities is mainly attributable to net cash received in connection with our long-term debt refinancing in 2022. Material cash requirements from known contractual and other obligations Our principal commitments consist of repayments of long-term debt, operating leases and certain purchase obligations.
This was offset by the repayment of $215.0 million related to the Oxford term loans, as discussed above. 62 Table of Contents Material cash requirements from known contractual and other obligations Our principal commitments consist of repayments of long-term debt, operating leases and certain purchase obligations.
The increase primarily relates to the purchase of short-term treasury securities during the year ended December 31, 2023, as well as an increase in capital expenditures. This increase was offset by a decrease in cash paid for business combinations.
The increase primarily relates to purchases of short-term treasury securities which were $379.1 million during the year ended December 31, 2023 compared to $82.2 million during the year ended December 31, 2024, a decrease of 296.9 million. The increase was partially offset by a decrease in maturities of short-term investments.
The following table summarizes our contractual and other obligations as of December 31, 2023: 79 Payments due by Period Total Less than 1 year 1-3 years 3-5 years More than 5 years (dollars in thousands) (in thousands) Long term debt obligations (1) $ 165,000 $ — $ 3,300 $ 161,700 $ — Operating lease obligations 10,571 1,597 4,668 4,306 — Purchase obligations (2) 13,381 6,523 5,988 870 — Other obligations 120 120 — — — Total $ 189,072 $ 8,240 $ 13,956 $ 166,876 $ — (1) Represents the estimated full cash repayment to Oxford Finance upon maturity of the Term Loan in September 2027.
The following table summarizes our contractual and other obligations as of December 31, 2024: Payments due by Period Total Less than 1 year 1-3 year 3-5 years More than 5 years (dollars in thousands) Long term debt obligations (1) $ 330,000 $ — $ — $ 330,000 $ — Operating lease obligations 9,047 1,212 3,525 4,310 — Purchase obligations (2) 50,069 14,695 19,536 13,533 2,305 Other obligations — — — — — Total $ 389,116 $ 15,907 $ 23,061 $ 347,843 $ 2,305 (1) Represents the estimated full cash repayment upon maturity of the Convertible Senior Notes in November 2029.
There are approximately 4.6 million Medicare-eligible individuals enrolled in Medicare Advantage plans in our existing 53 counties, of which our approximately 155,500 Health Plan Members represents only 3% market share. We believe that there are still significant opportunities for future growth even in our most mature markets where we have a 10-30% market share.
We routinely take market share from large established players in highly competitive markets, a key source of our health plan membership growth in excess of the industry average. We believe that there are still significant opportunities for future growth even in our most mature markets where we have a 10-30% market share.
Our use of the term adjusted gross profit may vary from the use of similar terms by other companies in our industry and accordingly may not be comparable to similarly titled measures used by other companies. 72 Adjusted gross profit is reconciled as follows: Year Ended December 31, 2023 2022 (dollars in thousands) Loss from operations $ (127,817 ) $ (128,639 ) Add back: Equity-based compensation (medical expenses) 7,541 9,128 Depreciation (medical expenses) 254 213 Depreciation and amortization 21,414 17,273 Selling, general, and administrative expenses 307,433 295,646 Total add back 336,642 322,260 Adjusted gross profit $ 208,825 $ 193,621 We calculate our MBR by dividing total medical expenses, excluding depreciation and equity-based compensation, by total revenues in a given period.
Adjusted gross profit is reconciled as follows: Year Ended December 31, 2024 2023 (dollars in thousands) Loss from operations $ (101,555) $ (127,817) Add back: Equity-based compensation (medical expenses) 4,930 7,541 Depreciation (medical expenses) 190 254 Restructuring costs (medical expenses) (1) 796 — Depreciation and amortization (2) 26,872 21,414 Selling, general, and administrative expenses 371,374 307,433 Total add back 404,162 336,642 Adjusted gross profit $ 302,607 $ 208,825 (1) Represents severance and related costs incurred as part of a corporate restructuring, that took place during 2024, designed to streamline our organizational structure and drive operational efficiencies (2) Includes $0.6 million in impairment expense related to intangible assets that were written off during the year We calculate our MBR by dividing total medical expenses, excluding depreciation, equity-based compensation and clinical restructuring costs, by total revenues in a given period.
(8 )% (10 )% 76 Revenues Year Ended December 31, Change 2023 2022 $ % (dollars in thousands) Revenues: Earned premiums $ 1,800,933 $ 1,431,550 $ 369,383 25.8 % Other 22,697 2,609 20,088 770.0 % Total revenues $ 1,823,630 $ 1,434,159 $ 389,471 27.2 % Revenues.
(5) % (8) % Revenues Year Ended December 31, Change 2024 2023 $ % (dollars in thousands) Revenues: Earned premiums $ 2,671,931 $ 1,800,933 $ 870,998 48.4 % Other 31,630 22,697 8,933 39.4 % Total revenues $ 2,703,561 $ 1,823,630 $ 879,931 48.3 % Earned Premiums.
The following tables provide information about incurred and paid claims development as of December 31, 2023: Cumulative Incurred Claims, net of reinsurance for the Years Ended December 31, Claims Incurred Year 2021 2022 2023 2021 327,224 312,739 311,519 2022 400,939 387,604 2023 492,315 Total $ 1,191,438 Cumulative Claims paid, net of reinsurance for the Years Ended December 31, Cumulative Number of Paid Claims Claims Incurred Year 2021 2022 2023 2021 251,629 309,850 310,103 279,243 2022 315,187 385,378 386,055 2023 400,465 469,288 Total $ 1,095,946 Substantially all of the claims incurred but not paid balance as of December 31, 2023 relate to the current year.
The following tables provide information about incurred and paid claims development as of December 31, 2024: Cumulative Incurred Claims, net of reinsurance for the Years Ended December 31, 2022 2023 2024 Claims Incurred Year (in thousands) 2022 400,939 385,746 383,865 2023 492,315 484,951 2024 832,819 Total $ 1,701,635 Cumulative Claims paid, net of reinsurance for the Years Ended December 31, Cumulative Number of Paid Claims (1) 2022 2023 2024 Claims Incurred Year (in thousands) 2022 315,187 383,419 382,467 389,689 2023 400,465 481,827 537,129 2024 670,471 909,451 Total $ 1,534,765 (1) Cumulative number of paid claims are presented in whole amounts Substantially all of the claims incurred but not paid balance as of December 31, 2024 relate to the current year.
Results of Operations We operate and manage our business as a single reporting and operating segment, which is to provide healthcare services to our seniors. The components of our results of operations are as follows: Revenues Our revenue is comprised of earned premiums and other revenue.
The components of our results of operations are as follows: Revenues Our revenue is comprised of earned premiums and other revenue. We receive and record premium revenue on a monthly basis from the federal government based on our contract with CMS.
Additionally, ACO REACH revenue, also included in earned premiums, increased $73.0 million, or 143.3% for the year ended December 31, 2023 compared to the year ended December 31, 2022. Other revenues increased $20.1 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, an increase of 770%.
The increase was offset by a decrease in ACO REACH revenue due to the change from gross to net revenue treatment. ACO REACH revenue decreased $125.2 million, or 101.0%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. Other Revenues.
(2) Not meaningful Health Plan Membership We define Health Plan Membership as the number of members enrolled in the our HMO and PPO contracts as of the end of a reporting period.
The five-year compounded growth rate through December 31, 2024 of revenue and the number of members enrolled in our HMO and PPO contracts ("Health Plan Membership") is 29% and 31% respectively.
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources .” Securities Authorized for Issuance Under Equity Compensation Plans For information regarding securities authorized for issuance under our equity compensation plans, see Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” Performance Graph This performance graph below shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into this Annual Report on Form 10-K or any other filing of Alignment Healthcare, Inc. under the Exchange Act or the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent that we specifically incorporate this information by reference therein.
Added
Our model is based on a flywheel concept, referred to as our “virtuous cycle,” which reflects our unique ability to manage healthcare expenditures while maintaining quality and member satisfaction — a distinct and sustainable competitive advantage. To execute upon this concept, we start by ingesting medical and demographic data through our proprietary AVA technology platform.
Removed
The graph set forth below compares the cumulative total stockholder return on our common stock between March 26, 2021 (the date our common stock commenced trading on the Nasdaq Global Select Market) and December 31, 2023, with the cumulative total return of (a) the Nasdaq Healthcare Index and (b) the S&P 500, over the same period.
Added
AVA’s predictive algorithms provide unique insights into each member and identify those most at risk of an acute event. Our information-enabled care model is then combined with clinical engagement by our employed clinical teams known as Care Anywhere to improve healthcare outcomes for our members.
Removed
This graph assumes the investment of $100 on March 26, 2021 in our common stock, the Nasdaq Healthcare Index, and the Nasdaq S&P 500 and assumes the reinvestment of dividends, if any.
Added
For example, our high-touch clinical model proactively manages chronic conditions and assists with post-discharge care navigation to reduce unnecessary hospital admissions and readmissions, which in turn improves health outcomes and quality while lowering overall costs. We then reinvest medical cost savings into richer coverage and benefits, which propels growth in revenue and membership while maintaining margin discipline.
Removed
The graph assumes our closing sales price on March 26, 2021 of $17.31 per share as the initial value of our common stock and not the initial offering price to the public of $18.00 per share. The comparisons shown in the graph below are based upon historical data.
Added
The strength of our model is further reinforced by delivering a premium member experience. Our concierge and a clinical service hotline is available 24/7 at no additional cost to our members and our state-of-the-art in-house call centers provide us with more consistency and control over member-facing functions.

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