EX-99.1 2 oscr-1q24xpressrelease.htm EX-99.1 Document

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Oscar Health, Inc.
ir.hioscar.com
News Release

Oscar Health Announces Results for First Quarter 2024

May 7, 2024
    
•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


New York, NY, May 7, 2024 - 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.






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News Release


Financial Results Summary
Three Months Ended March 31,
(in thousands)20242023
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)20242023
Total revenue$2,142,305 $1,469,685 
Medical Loss Ratio (MLR)74.2 %76.3 %
SG&A Expense Ratio18.4 %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 Offering20242023
Individual and Small Group1,386,980 948,431 
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.

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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.








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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.

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

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

Source: Oscar Health, Inc.




































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Oscar Health, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended March 31,
(in thousands, except per share amounts)20242023
Revenue
Premium$2,093,682 $1,428,626 
Investment income42,989 36,056 
Services and other5,634 5,003 
Total revenue2,142,305 1,469,685 
Operating Expenses
Medical1,554,774 1,091,592 
Selling, general, and administrative394,162 398,519 
Depreciation and amortization7,811 4,939 
Total operating expenses1,956,747 1,495,050 
Earnings (loss) from operations185,558 (25,365)
Interest expense5,902 6,136 
Other expenses1,178 6,106 
Earnings (loss) before income taxes178,478 (37,607)
Income tax expense996 2,021 
Net income (loss)177,482 (39,628)
Less: Net income attributable to noncontrolling interests114 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
Basic231,443 216,913 
Diluted293,796 216,913 
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Oscar Health, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share amounts)March 31, 2024December 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 receivable62,037 51,925 
Reinsurance recoverable242,935 241,194 
    Other current assets8,983 6,564 
Total current assets3,503,792 3,061,100 
Property, equipment, and capitalized software, net61,406 61,930 
Long-term investments736,624 365,309 
Restricted deposits29,814 29,870 
Other assets87,217 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 payable1,336,022 1,056,941 
Premium deficiency reserve4,332 5,776 
Unearned premiums65,541 65,918 
Accounts payable and other liabilities303,245 273,367 
Reinsurance payable61,938 61,024 
Total current liabilities3,019,425 2,429,012 
Long-term debt298,972 298,777 
Other liabilities66,169 67,574 
Total liabilities3,384,566 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 capital3,736,885 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' equity1,032,023 803,967 
Noncontrolling interests2,264 2,150 
Total stockholders' equity1,034,287 806,117 
Total liabilities and stockholders' equity$4,418,853 $3,601,480 
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Oscar Health, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
Three Months Ended March 31,
(in thousands)20242023
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 expense7,811 4,939 
Amortization of debt issuance costs194 194 
Stock-based compensation expense25,945 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 payable282,361 16,349 
Unearned premiums(376)(5,648)
Premium deficiency reserve(1,444)(14)
Accounts payable and other liabilities28,473 714 
Reinsurance payable914 (387,191)
Risk adjustment transfer payable279,081 292,662 
Net cash provided by operating activities634,363 414,715 
Cash Flows from Investing Activities:
Purchase of investments(556,693)(202,650)
Sale of investments— 15,052 
Maturity of investments261,428 330,486 
Purchase of property, equipment and capitalized software(5,950)(7,379)
Change in restricted deposits626 — 
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 options27,309 35 
Net cash provided by financing activities27,309 506 
Increase in cash, cash equivalents and restricted cash equivalents361,083 550,730 
Cash, cash equivalents, restricted cash and cash equivalents—beginning of period1,891,971 1,580,497 
Cash, cash equivalents, restricted cash and cash equivalents—end of period2,253,054 2,131,227 
Cash and cash equivalents2,230,799 2,109,571 
Restricted cash and cash equivalents included in restricted deposits22,255 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 

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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)20242023
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

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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)20242023
Net income (loss)$177,482 $(39,628)
Interest expense5,902 6,136 
Other expenses1,178 6,106 
Income tax expense996 2,021 
Depreciation and amortization7,811 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.



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Appendix

Oscar Health, Inc.
News Release


Reinsurance Impact

Three Months Ended March 31,
(in thousands)20242023
Quota share ceded premiums$(4,994)$12,360 
Quota share ceded claims1,055 (6,435)
Ceding commission, net of deposit accounting impact (1)
(12,172)(9,295)
Experience refund2,979 (5,705)
Net quota share impact$(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)20242023
Direct policy premiums$2,310,100 $1,663,474 
Assumed premiums57,612 55,935 
Risk adjustment(269,398)(293,147)
Premiums before ceded reinsurance2,098,314 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)20242023
Direct claims incurred$1,523,646 $1,048,058 
Ceded reinsurance claims(19,698)(3,624)
Assumed reinsurance claims50,826 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)20242023
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, 2024December 31, 2023
Reinsurance premium and claim recoverables$235,216 $224,837 
Reinsurance ceding commissions7,613 7,054 
Experience refunds on reinsurance agreements106 9,303 
Reinsurance recoverable$242,935 $241,194