• For the quarter ended March 31, 2024:
    • Total Revenue of $2.1 billion, a 46% increase YoY
    • Medical Loss Ratio of 74.2%, a 210 bps improvement YoY
    • SG&A Expense Ratio of 18.4%, an 870 bps improvement YoY
    • Net Income attributable to Oscar of $177.4 million, or $0.62 of diluted earnings per share, a $217.1 million improvement YoY
    • Adjusted EBITDA of $219.3 million, a $168.2 million improvement YoY

Oscar Health, Inc. (“Oscar” or the “Company”) (NYSE: OSCR), a leading healthcare technology company, today announced its financial results for the first quarter ended March 31, 2024.

“Oscar reported strong first quarter results, showing year-over-year improvement across all core metrics and achieving positive net income,” said Mark Bertolini, CEO of Oscar Health. “Our performance lays a solid foundation for 2024, and gives us a clear line of sight into Total Company Adjusted EBITDA profitability this year. We remain on a path to sustainable growth and look forward to sharing details on our long-term strategic plan at our Investor Day in June.”

Total Revenue was $2.1 billion in the quarter, up 46% year-over-year (“YoY”), driven primarily by higher membership, rate increases, and lower risk adjustment as a percentage of premiums.

The Medical Loss Ratio improved 210 bps YoY to 74.2%, due to our disciplined pricing strategy and total cost of care initiatives. The SG&A Expense Ratio significantly improved 870 bps YoY to 18.4%, driven by lower SG&A expenses, as well as variable cost efficiencies, improved fixed cost leverage, and lower risk adjustment as a percentage of premiums.

Adjusted EBITDA of $219.3 million significantly improved by $168.2 million YoY, and Net income attributable to Oscar of $177.4 million also significantly improved by $217.1 million YoY.

Oscar is reaffirming its full year 2024 outlook across all metrics as provided in its financial results press release dated February 7, 2024.

Financial Results Summary

 

 

 

 

 

Three Months Ended March 31,

(in thousands)

2024

 

2023

Premium

$

2,093,682

 

$

1,428,626

 

Total revenue

$

2,142,305

 

$

1,469,685

 

Total operating expenses

$

1,956,747

 

$

1,495,050

 

Net income (loss) attributable to Oscar Health, Inc.

$

177,368

 

$

(39,772

)

Key Metrics and Non-GAAP Financial Metrics

 

 

 

 

 

Three Months Ended March 31,

(in thousands, except percentages)

2024

 

2023

Total revenue

$

2,142,305

 

 

$

1,469,685

 

Medical Loss Ratio (MLR)

 

74.2

%

 

 

76.3

%

SG&A Expense Ratio

 

18.4

%

 

 

27.1

%

Adjusted EBITDA(1)

$

219,314

 

 

$

51,068

 

(1)

Adjusted EBITDA is a non-GAAP measure. See “Key Operating and Non-GAAP Financial Metrics - Adjusted EBITDA” in this release for a reconciliation to net loss, the most directly comparable GAAP measure, and for information regarding Oscar’s use of Adjusted EBITDA.

 

As of March 31,

Membership by Offering

2024

 

2023

Individual and Small Group

1,386,980

 

948,431

Medicare Advantage

 

1,793

Cigna + Oscar (1)

61,428

 

67,108

Total Members (2)

1,448,408

 

1,017,332

(1)

Represents total membership for Oscar’s co-branded partnership with Cigna.

(2)

A member covered under more than one of our health plans counts as a single member for the purposes of this metric.

Quarterly Conference Call Details

Oscar will host a conference call to discuss the financial results today, May 7, 2024, at 8:00 a.m. (ET). A live audio webcast will be available via the Investor Relations page of Oscar’s website at ir.hioscar.com. A replay of the webcast will be available for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

Non-GAAP Financial Information

This release presents Adjusted EBITDA, a non-GAAP financial metric, which is provided as a complement to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of historical non-GAAP financial information to the most directly comparable GAAP financial measure is provided in the accompanying tables found at the end of this release. For more information regarding Adjusted EBITDA, please see “Key Operating and Non-GAAP Financial Metrics” below.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained herein are forward-looking statements. These statements include, but are not limited to, statements about our financial outlook and estimates, including Total revenue, Medical Loss Ratio, SG&A Expense Ratio and Adjusted EBITDA and other financial performance metrics, and the related underlying assumptions, our business and financial prospects, and our management’s plans and objectives for future operations, expectations and business strategy. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other similar expressions. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, and uncertainties that are difficult to predict and generally beyond our control.

Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, there are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: our ability to execute our strategy and manage our growth effectively; our ability to retain and expand our member base; heightened competition in the markets in which we participate; our ability to accurately estimate our incurred medical expenses or effectively manage our medical costs or related administrative costs; our ability to achieve or maintain profitability in the future; changes in federal or state laws or regulations, including changes with respect to the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, as amended (collectively, the “ACA”) and any regulations enacted thereunder; our ability to comply with ongoing regulatory requirements, including capital reserve and surplus requirements and applicable performance standards; changes or developments in the health insurance markets in the United States, including passage and implementation of a law to create a single-payer or government-run health insurance program; our, or any of our vendors’, ability to comply with laws, regulations, and standards related to the handling of information about individuals or applicable consumer protection laws; our ability to arrange for the delivery of quality care and maintain good relations with the physicians, hospitals, and other providers within and outside our provider networks; unanticipated results of, or changes to, risk adjustment programs; our ability to utilize quota share reinsurance to meet our capital and surplus requirements and protect against downside risk on medical claims; unfavorable or otherwise costly outcomes of lawsuits, audits, investigations, and claims that arise from the extensive laws and regulations to which we are subject; incurrence of data security breaches of our and our partners’ information and technology systems; our ability to detect and prevent material weaknesses or significant control deficiencies in our internal controls over financial reporting or other failure to maintain an effective system of internal controls; adverse publicity or other adverse consequences related to our dual class structure or “controlled company” status; and the other factors set forth under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (“SEC”), and our other filings with the SEC, including our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024, to be filed with the SEC.

You are cautioned not to place undue reliance on any forward-looking statements made in this press release. Any forward-looking statement speaks only as of the date as of which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New factors emerge from time to time, and it is not possible for us to predict which will arise.

About Oscar Health

Oscar Health, Inc. (“Oscar”) is the first health insurance company built around a full stack technology platform and a relentless focus on serving its members. At Oscar, our mission is to make a healthier life accessible and affordable for all. Headquartered in New York City, Oscar has been challenging the healthcare system's status quo since our founding in 2012. The company’s member-first philosophy and innovative approach to care has earned us the trust of over 1.4 million members, as of March 31, 2024. We offer Individual & Family and Small Group plans, and +Oscar, our full stack technology platform, to others within the provider and payor space. Our vision is to refactor healthcare to make good care cost less. Refactor is a term used in software engineering that means to improve the design, structure, and implementation of the software, while preserving its functionality. At Oscar, we take this definition a step further. We improve our members’ experience by building trust through deep engagement, personalized guidance, and rapid iteration.

Oscar Health, Inc.

Condensed Consolidated Statements of Operations

(unaudited)

 

 

Three Months Ended March 31,

(in thousands, except per share amounts)

2024

 

2023

Revenue

 

 

 

Premium

$

2,093,682

 

$

1,428,626

 

Investment income

 

42,989

 

 

36,056

 

Services and other

 

5,634

 

 

5,003

 

Total revenue

 

2,142,305

 

 

1,469,685

 

 

 

 

 

Operating Expenses

 

 

 

Medical

 

1,554,774

 

 

1,091,592

 

Selling, general, and administrative

 

394,162

 

 

398,519

 

Depreciation and amortization

 

7,811

 

 

4,939

 

Total operating expenses

 

1,956,747

 

 

1,495,050

 

Earnings (loss) from operations

 

185,558

 

 

(25,365

)

Interest expense

 

5,902

 

 

6,136

 

Other expenses

 

1,178

 

 

6,106

 

Earnings (loss) before income taxes

 

178,478

 

 

(37,607

)

Income tax expense

 

996

 

 

2,021

 

Net income (loss)

 

177,482

 

 

(39,628

)

Less: Net income attributable to noncontrolling interests

 

114

 

 

144

 

Net income (loss) attributable to Oscar Health, Inc.

$

177,368

 

$

(39,772

)

 

 

 

 

Earnings (Loss) per Share

 

 

 

Basic

$

0.77

 

$

(0.18

)

Diluted

$

0.62

 

$

(0.18

)

Weighted Average Common Shares Outstanding

 

 

 

Basic

 

231,443

 

 

216,913

 

Diluted

 

293,796

 

 

216,913

 

 

Oscar Health, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

 

(in thousands, except share amounts)

March 31, 2024

 

December 31, 2023

Assets

 

 

 

Current Assets:

 

 

 

Cash and cash equivalents

$

2,230,799

 

 

$

1,870,315

 

Short-term investments

 

616,134

 

 

 

689,833

 

Premiums and accounts receivable (net of allowance for credit losses of $30,600 and $31,600)

 

342,904

 

 

 

201,269

 

Risk adjustment transfer receivable

 

62,037

 

 

 

51,925

 

Reinsurance recoverable

 

242,935

 

 

 

241,194

 

Other current assets

 

8,983

 

 

 

6,564

 

Total current assets

 

3,503,792

 

 

 

3,061,100

 

Property, equipment, and capitalized software, net

 

61,406

 

 

 

61,930

 

Long-term investments

 

736,624

 

 

 

365,309

 

Restricted deposits

 

29,814

 

 

 

29,870

 

Other assets

 

87,217

 

 

 

83,271

 

Total assets

$

4,418,853

 

 

$

3,601,480

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current Liabilities:

 

 

 

Benefits payable

$

1,248,347

 

 

$

965,986

 

Risk adjustment transfer payable

 

1,336,022

 

 

 

1,056,941

 

Premium deficiency reserve

 

4,332

 

 

 

5,776

 

Unearned premiums

 

65,541

 

 

 

65,918

 

Accounts payable and other liabilities

 

303,245

 

 

 

273,367

 

Reinsurance payable

 

61,938

 

 

 

61,024

 

Total current liabilities

 

3,019,425

 

 

 

2,429,012

 

Long-term debt

 

298,972

 

 

 

298,777

 

Other liabilities

 

66,169

 

 

 

67,574

 

Total liabilities

 

3,384,566

 

 

 

2,795,363

 

Commitments and contingencies

 

 

 

Stockholders' Equity

 

 

 

Class A common stock ($0.00001 par value; 825,000 thousand shares authorized, 200,497 thousand and 193,875 thousand shares outstanding as of March 31, 2024 and December 31, 2023, respectively)

 

2

 

 

 

2

 

Class B common stock ($0.00001 par value; 82,500 thousand shares authorized, 35,514 thousand and 35,514 thousand shares outstanding as of March 31, 2024 and December 31, 2023, respectively)

 

 

 

 

 

Treasury stock (315 thousand shares as of March 31, 2024 and December 31, 2023)

 

(2,923

)

 

 

(2,923

)

Additional paid-in capital

 

3,736,885

 

 

 

3,682,294

 

Accumulated deficit

 

(2,699,347

)

 

 

(2,876,715

)

Accumulated other comprehensive income (loss)

 

(2,594

)

 

 

1,309

 

Total Oscar Health, Inc. stockholders' equity

 

1,032,023

 

 

 

803,967

 

Noncontrolling interests

 

2,264

 

 

 

2,150

 

Total stockholders' equity

 

1,034,287

 

 

 

806,117

 

Total liabilities and stockholders' equity

$

4,418,853

 

 

$

3,601,480

 

 

Oscar Health, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

 

 

Three Months Ended March 31,

(in thousands)

2024

 

2023

Cash Flows from Operating Activities:

 

 

 

Net income (loss)

$

177,482

 

 

$

(39,628

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Deferred taxes

 

(79

)

 

 

(183

)

Net realized loss on sale of financial instruments

 

 

 

 

43

 

Depreciation and amortization expense

 

7,811

 

 

 

4,939

 

Amortization of debt issuance costs

 

194

 

 

 

194

 

Stock-based compensation expense

 

25,945

 

 

 

71,494

 

Net accretion of investments

 

(6,226

)

 

 

(7,322

)

Change in provision for credit losses

 

(1,000

)

 

 

8,491

 

Changes in assets and liabilities:

 

 

 

(Increase) / decrease in:

 

 

 

Premiums and accounts receivable

 

(140,635

)

 

 

21,949

 

Risk adjustment transfer receivable

 

(10,112

)

 

 

1,740

 

Reinsurance recoverable

 

(1,741

)

 

 

440,652

 

Other assets

 

(6,285

)

 

 

(4,526

)

Increase / (decrease) in:

 

 

 

Benefits payable

 

282,361

 

 

 

16,349

 

Unearned premiums

 

(376

)

 

 

(5,648

)

Premium deficiency reserve

 

(1,444

)

 

 

(14

)

Accounts payable and other liabilities

 

28,473

 

 

 

714

 

Reinsurance payable

 

914

 

 

 

(387,191

)

Risk adjustment transfer payable

 

279,081

 

 

 

292,662

 

Net cash provided by operating activities

 

634,363

 

 

 

414,715

 

Cash Flows from Investing Activities:

 

 

 

Purchase of investments

 

(556,693

)

 

 

(202,650

)

Sale of investments

 

 

 

 

15,052

 

Maturity of investments

 

261,428

 

 

 

330,486

 

Purchase of property, equipment and capitalized software

 

(5,950

)

 

 

(7,379

)

Change in restricted deposits

 

626

 

 

 

 

Net cash (used in) provided by investing activities

 

(300,589

)

 

 

135,509

 

Cash Flows from Financing Activities:

 

 

 

Proceeds from joint venture contribution

 

 

 

 

471

 

Proceeds from exercise of stock options

 

27,309

 

 

 

35

 

Net cash provided by financing activities

 

27,309

 

 

 

506

 

Increase in cash, cash equivalents and restricted cash equivalents

 

361,083

 

 

 

550,730

 

Cash, cash equivalents, restricted cash and cash equivalents—beginning of period

 

1,891,971

 

 

 

1,580,497

 

Cash, cash equivalents, restricted cash and cash equivalents—end of period

 

2,253,054

 

 

 

2,131,227

 

Cash and cash equivalents

 

2,230,799

 

 

 

2,109,571

 

Restricted cash and cash equivalents included in restricted deposits

 

22,255

 

 

 

21,656

 

Total cash, cash equivalents and restricted cash and cash equivalents

$

2,253,054

 

 

$

2,131,227

 

Supplemental Disclosures:

 

 

 

Interest payments

$

11,118

 

 

$

11,319

 

Key Operating and Non-GAAP Financial Metrics

We regularly review the following key operating and Non-GAAP financial metrics to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, and make strategic decisions. We believe these operational and financial measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP.

Members

Members are defined as any individual covered by a health plan that we offer directly or through a co-branded arrangement. We view the number of members enrolled in our health plans as an important metric to help evaluate and estimate revenue and market share. Additionally, the more members we enroll, the more data we have, which allows us to improve the functionality of our platform.

Medical Loss Ratio

Medical Loss Ratio is a metric used to calculate medical expenses as a percentage of net premiums before ceded quota share reinsurance. Medical expenses are the total expenses incurred by members in order to utilize health care services less any member cost sharing. These services include inpatient, outpatient, pharmacy, and physician costs. Medical claims also include fee-for-service claims, pharmacy benefits, capitation payments to providers, provider disputed claims, risk sharing arrangements with certain of our providers, and various other medical-related costs. The impact of the federal risk adjustment program is included in the denominator of our MLR. We believe MLR is an important metric to demonstrate the ratio of our costs to pay for healthcare of our members to the net premium before ceded reinsurance. MLR in our existing products are subject to various federal and state minimum requirements.

 

Three Months Ended March 31,

(in thousands, except percentages)

2024

 

2023

Medical

$

1,554,774

 

 

$

1,091,592

 

Less: Ceded quota share reinsurance claims (1)

 

(1,055

)

 

 

6,435

 

Net claims before ceded quota share reinsurance (A)

$

1,555,829

 

 

$

1,085,157

 

 

 

 

 

Premium

$

2,093,682

 

 

$

1,428,626

 

Less: Ceded quota share reinsurance premiums (2)

 

(2,016

)

 

 

6,655

 

Net premiums before ceded quota share reinsurance (B)

$

2,095,698

 

 

$

1,421,971

 

Medical Loss Ratio (A divided by B)

 

74.2

%

 

 

76.3

%

(1)

Represents prior period development for claims ceded to reinsurers pursuant to quota share treaties, which are accounted for under reinsurance accounting and are in runoff.

(2)

Represents prior period development for premiums ceded to reinsurers pursuant to quota share treaties, which are accounted for under reinsurance accounting and are in runoff.

SG&A Expense Ratio

The SG&A Expense Ratio reflects the Company’s selling, general and administrative ("SG&A") expenses, as a percentage of Total revenue. Selling, general and administrative expenses primarily include wages, benefits, costs of software and hardware, and administrative costs for our corporate and technology functions, the impact of quota share reinsurance, and stock-based compensation. We believe the SG&A Expense Ratio is useful to evaluate our ability to manage our overall selling, general, and administrative cost base.

Adjusted EBITDA

Adjusted EBITDA is defined as Net income (loss) for the Company and its consolidated subsidiaries before interest expense, income tax expense (benefit), and depreciation and amortization, as further adjusted for stock-based compensation, and other items that are considered unusual or not representative of underlying trends of our business, where applicable for the period presented. We present Adjusted EBITDA because we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Adjusted EBITDA is a non-GAAP measure. Management believes that investors’ understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing our ongoing results of operations.

We caution investors that amounts presented in accordance with our definition of Adjusted EBITDA may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate Adjusted EBITDA in the same manner.

By providing this non-GAAP financial measure, together with a reconciliation to the most comparable U.S. GAAP measure, Net income (loss), we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for Net income (loss) or other financial statement data presented in our Condensed Consolidated Financial Statements as indicators of financial performance.

 

Three Months Ended March 31,

(in thousands)

2024

 

2023

Net income (loss)

$

177,482

 

$

(39,628

)

Interest expense

 

5,902

 

 

6,136

 

Other expenses

 

1,178

 

 

6,106

 

Income tax expense

 

996

 

 

2,021

 

Depreciation and amortization

 

7,811

 

 

4,939

 

Stock-based compensation(1)

 

25,945

 

 

71,494

 

Adjusted EBITDA

$

219,314

 

$

51,068

 

(1)

Represents non-cash expenses related to equity-based compensation programs, which vary from period to period depending on various factors including the timing, number, and the valuation of awards. The three months ended March 31, 2023 includes a non-recurring charge of $46.3 million related to accelerated stock-based compensation expense recognized as a result of the cancellation of the Founders Awards previously granted to Mario Schlosser and Joshua Kushner.

Appendix

Reinsurance Impact

 

Three Months Ended March 31,

(in thousands)

2024

 

2023

Quota share ceded premiums

$

(4,994

)

 

$

12,360

 

Quota share ceded claims

 

1,055

 

 

 

(6,435

)

Ceding commission, net of deposit accounting impact (1)

 

(12,172

)

 

 

(9,295

)

Experience refund

 

2,979

 

 

 

(5,705

)

Net quota share impact

$

(13,132

)

 

$

(9,075

)

(1)

Includes ceding commissions received from reinsurers, net of the impact of deposit accounting of $(12,706) and $(7,759) for the three months ended March 31, 2024 and 2023, respectively.

The Company records Premium revenue net of reinsurance. The following table reconciles total reinsurance premiums ceded and reinsurance premiums assumed, which are included as components of total Premium revenue in the condensed consolidated statement of operations.

 

Three Months Ended March 31,

(in thousands)

2024

 

2023

Direct policy premiums

$

2,310,100

 

 

$

1,663,474

 

Assumed premiums

 

57,612

 

 

 

55,935

 

Risk adjustment

 

(269,398

)

 

 

(293,147

)

Premiums before ceded reinsurance

 

2,098,314

 

 

 

1,426,262

 

Reinsurance premiums ceded

 

(4,632

)

 

 

2,364

 

Premium

$

2,093,682

 

 

$

1,428,626

 

The Company records Medical expenses net of reinsurance recoveries. The following table reconciles total Medical expenses to the amount presented in the condensed consolidated statement of operations:

 

Three Months Ended March 31,

(in thousands)

2024

 

2023

Direct claims incurred

$

1,523,646

 

 

$

1,048,058

 

Ceded reinsurance claims

 

(19,698

)

 

 

(3,624

)

Assumed reinsurance claims

 

50,826

 

 

 

47,158

 

Medical expenses

$

1,554,774

 

 

$

1,091,592

 

The Company records Selling, general and administrative ("SG&A") expenses net of reinsurance ceding commissions and assumed SG&A expenses. The following table reconciles total Selling, general and administrative expenses to the amount presented in the condensed consolidated statement of operations:

 

Three Months Ended March 31,

(in thousands)

2024

 

2023

Selling, general and administrative expenses, gross

$

394,696

 

 

$

396,984

Reinsurance ceding commissions

 

(534

)

 

 

1,535

Selling, general and administrative expenses

$

394,162

 

 

$

398,519

The Company classifies Reinsurance recoverable within current assets on its condensed consolidated balance sheets. The composition of the Reinsurance recoverable balance is as follows:

(in thousands)

March 31, 2024

 

December 31, 2023

Reinsurance premium and claim recoverables

$

235,216

 

$

224,837

Reinsurance ceding commissions

 

7,613

 

 

7,054

Experience refunds on reinsurance agreements

 

106

 

 

9,303

Reinsurance recoverable

$

242,935

 

$

241,194

 

Investor Contact: Chris Potochar VP of Investor Relations ir@hioscar.com

Media Contact: Kristen Prestano VP of Communications press@hioscar.com

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