NeueHealth, Inc. (NYSE:NEUE) Q4 2024 Earnings Call Transcript March 20, 2025
NeueHealth, Inc. misses on earnings expectations. Reported EPS is $-7.41 EPS, expectations were $-2.29.
Operator: Good morning, and thank you for joining us for the NeueHealth Q4 2024 Earnings Conference Call. My name is Carlin. I’ll be coordinating the call today. And I’d like to hand over to your host, Emily Lombardi. The floor is yours.
Emily Lombardi: Good morning, and welcome to NeueHealth’s Fourth Quarter 2024 Earnings Conference Call. As a reminder, this call is being recorded. Leading the call today are NeueHealth’s President and CEO, Mike Mikan, and CFO, Jay Matushak. Before we begin, we want to remind you that this call may contain forward-looking statements under U.S. federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from historical experience or present expectations. A description of some of the risks and uncertainties can be found in the reports that we file with the Securities and Exchange Commission, including the risk factors in our current and periodic reports we file with the SEC.
Except as required by law, we undertake no obligation to revise or update any forward-looking statements or information. This call will also reference non-GAAP amounts and measures. A reconciliation of the non-GAAP to GAAP measures is available in the company’s fourth quarter earnings release available on the company’s Investor Relations page at investors.neuehealth.com. Information presented on this call is contained in such earnings release that we issued this morning in our Form 8-K dated March 20, 2025, and in the related presentation, each of which may be accessed from the Investor Relations page of the company’s website. With that, I will now turn the conference over to NeueHealth’s Chief Executive Officer, Mike Mikan.
Mike Mikan : Good morning, everyone, and thank you for joining NeueHealth’s Fourth Quarter 2024 Earnings Call. Today, we are pleased to report that we delivered our strongest year of financial performance to date in 2024, providing a solid foundation for NeueHealth to continue to grow the consumers we serve, expand the relationships we’ve built with payer and provider partners and advance our care model in 2025 and beyond. Since NeueHealth was founded in 2020, we have maintained a relentless focus on making high-quality health care accessible and affordable for all populations. With this focus, we believe we have created and refined a care model that aligns with the industry’s continued shift towards value-based care. Our model is compelling.
We believe it’s a strong alternative to episodic transactional care that has defined the health care industry for decades. In contrast, our model is grounded in the power of long-standing trusted relationships in the local communities we serve. Through our relationship-based approach, we prioritized a few fundamental elements that we believe create a truly personalized and coordinated health care experience that serves consumers throughout their lifetime. First, we are committed to placing the consumer at the center of everything we do, developing a holistic and deep understanding of every person we serve and becoming their ongoing trusted partner in care throughout their lifetime. Second, we focus on proactively managing care through key consumer engagement and care management initiatives to drive better health outcomes and importantly, empower consumers to take an active role in their health.
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Finally, through our relationship-based approach, we developed strong partnerships with providers and payers across the industry with a focus on aligning interest to create a better health care experience for all. In 2024, we served 483,000 consumers, representing a compound annual growth rate of 123% in our NeueCare and NeueSolutions segments since 2020. We are building on this momentum and have already generated significant growth to start 2025, serving 717,000 consumers. Compared to 2024, we have grown the consumers we serve through our existing payer relationships by 31%. And in our recently expanded markets, we have grown the consumers we serve by 97%. In addition, to start the year, we have secured new payer partnerships and expanded into new product verticals, including MSSP.
We believe that this growth demonstrates the momentum we are driving to start the year and positions us for continued success in 2025 and beyond. On December 23, 2024, we announced that we entered into a definitive agreement to be acquired by an affiliate of one of our largest investors, NEA. Upon completion of this transaction, NeueHealth will become a privately held company. We believe that this transaction places NeueHealth in a strong position for continued growth, providing the company with the flexibility and resources to build on our success as a leader in value-based care. We anticipate the transaction closing in the second quarter of 2025, assuming satisfaction of the necessary closing conditions. For additional information regarding the proposed transaction, please consult our filings with the SEC.
I’ll now hand it over to Jay to provide additional details on our fourth quarter and full year performance.
Jay Matushak : Thank you, Mike, and good morning, everyone. I’ll now discuss our fourth quarter performance and full year results for our continuing consolidated NeueHealth business as well as each of our continuing NeueCare and NeueSolutions segments, then I will view our balance sheet. GAAP financials are included in our press release and will be included in our 10-K once it is filed and contain results that include our discontinued operations. NeueHealth consolidated revenue for the fourth quarter was $232.6 million. Full year consolidated revenue was $936.7 million. Our fourth quarter gross margin was $47.7 million and $194.5 million for the full year. For the fourth consecutive quarter in 2024, we achieved adjusted EBITDA profitability, driving $5.5 million of adjusted EBITDA in the fourth quarter and $22.5 million of adjusted EBITDA for the full year.
As Mike mentioned, in 2024, we continued to grow the number of consumers we serve across our NeueCare and NeueSolutions segments, serving 483,000 consumers across the ACA Marketplace, Medicare and Medicaid, and we continue to see strong strategic growth opportunities in 2025. In our NeueCare segment, revenue was $79.3 million in the fourth quarter and $313.7 million for the full year. Fourth quarter operating income was $9.2 million with full year operating income of $29.6 million. Through our clinics in 2024, we served 318,000 value-based consumers. As you recall, we expanded our operations in Central Florida earlier this year, leveraging existing relationships to grow our footprint and the consumers we serve. We are continuing to evaluate similar market expansion opportunities in 2025 and beyond.
Turning now to our NeueSolutions segment. In 2024, we continue to drive growth through our provider enablement business, which includes our suite of population health tools and capabilities as well as our ACO REACH business. NeueSolutions revenue was $157.1 million in the fourth quarter and $635.1 million for the full year. The NeueSolutions segment operating income was $3.1 million for the fourth quarter with operating loss of $5.3 million for the full year. In our provider enablement business, we grew the consumers we serve to 123,000 in 2024, reflecting the strong relationships we have established with provider groups and our ability to help them succeed in performance-based arrangements. In 2025, we are building on our experience participating in innovative government programs.
In addition to ACO REACH, we will also be participating in MSSP this year. Now looking at our balance sheet. As of December 31, 2024, we had $202.8 million in total cash and investments, including amounts in our regulated entities. Our nonregulated cash and short-term investments were $93.2 million at the end of the fourth quarter, including $36.3 million of restricted cash and investments. I’ll now turn it over to Mike for some closing comments.
Mike Mikan : Thank you, Jay. 2024 was a transformative year for NeueHealth. We devoted our full focus on where we have proven to have the greatest impact, our care delivery and provider enablement business segments. We advanced and grew our value-driven consumer-centric care model to serve 483,000 consumers. And we delivered $22.5 million of adjusted EBITDA, our strongest financial performance to date. In 2025, we are focused on continuing to create a better health care experience for all as we look to drive strategic growth across our business, prioritizing a few key areas. First, we will look to continue to bring high-quality affordable health care to more consumers with a focus on diversifying the populations we serve across product categories.
Second, we expect to continue to deepen our presence in the local communities we serve as well as expand into new geographies, bringing our care model and local approach to more growing markets. Third, we will look to continue to grow alongside our payer partners through the strong trusted relationships we have built in addition to prioritizing growth with new payer groups. And finally, we intend to continue to build on our strong partnerships with providers, meeting them where they are on their path to participating in performance-based arrangements and enabling them to deliver the highest quality personalized care. Overall, we feel our relationship-based approach and the trusted partnerships we have established with consumers, providers and payers across the industry gives us a strong platform to drive long-term sustainable growth this year and beyond.
I’m excited for our future, and I believe we are entering 2025 in a very strong position. I’ve never been more confident in our ability to drive change across the health care industry and create an experience that is seamless and more coordinated for consumers, providers and payers alike. Thank you to the entire NeueHealth team for your continued commitment to making the health care experience better for all. I’m looking forward to all we will achieve together in 2025 and beyond. That concludes today’s call. Thank you for joining and for your interest in NeueHealth.
Operator:
