Oscar Health, Inc. ((OSCR)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Oscar Health’s recent earnings call for 2024 painted a picture of resilience and advancement, showcasing a strong overall performance marked by record revenue, profitability, and membership growth. Despite encountering some challenges with the medical loss ratio and fourth-quarter losses, the company’s strategic investments in technology and operational efficiencies position it favorably for 2025.
Record Financial Performance
Oscar Health reported its strongest financial performance to date, achieving a total company adjusted EBITDA of $199 million, a significant $245 million improvement from the previous year. The company also turned a corner to net income profitability, posting a $25 million net income, highlighting a remarkable $296 million increase over the prior year.
Significant Revenue Growth
The company experienced a substantial 57% year-over-year increase in total revenue, reaching $9.2 billion. This growth was primarily fueled by record-high membership levels and strong retention rates.
Improved SG&A Ratio
Oscar Health successfully improved its SG&A ratio by more than 500 basis points year-over-year to 19.1%. This improvement was achieved through a combination of operating leverage and disciplined expense management.
Membership Growth
Oscar’s membership base expanded impressively by 37%, significantly outpacing the market growth of 13%. As of February 1, 2025, Oscar boasts 1.8 million members.
Technology and AI Advancements
Oscar’s advancements in technology and AI integration have enhanced operational efficiency, member engagement, and affordability. These innovations have notably reduced provider tasks and implementation time, contributing to overall company efficiency.
Increased Medical Loss Ratio (MLR)
The company’s medical loss ratio saw a slight increase of 10 basis points year-over-year to 81.7%. The fourth quarter, however, experienced a more pronounced increase of 170 basis points.
Fourth Quarter Adjusted EBITDA Loss
For the fourth quarter, Oscar Health reported an adjusted EBITDA loss of approximately $113 million, which remained flat year-over-year. This indicates ongoing challenges in achieving quarterly profitability.
Forward-Looking Guidance
Looking ahead, Oscar Health projects continued financial growth with estimated total revenues for 2025 ranging between $11.2 billion and $11.3 billion. The company expects a medical loss ratio improvement of 50 basis points at the midpoint and an SG&A ratio improvement by approximately 125 basis points. Oscar aims for earnings from operations to fall between $225 million and $275 million, with a positive net income anticipated for 2025. The company is committed to achieving a 20% revenue CAGR and a 5% operating margin by 2027.
Oscar Health’s earnings call underscores a robust fiscal trajectory with record-breaking financial metrics and strategic advancements. Despite some hurdles, the company remains on a positive path, with significant growth and profitability expected in the coming years. Oscar’s dedication to leveraging technology and operational improvements further solidifies its standing in the competitive health insurance market.
