CLOV

MKT CAP —P/E —DIV YIELD —FCF YIELD —REV TTM $2.5B +54.0%NET INCOME −$18.4MNET CASH $58.3M52W 1.70 – 5.41NEXT EARNINGS Nov 4SEC XBRL · TTM TO Invalid Date

How CLOV rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

85%

of sentences unchanged

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new sentences

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Length

+350

words, now 29,143

New in FY2025

We have incurred net losses of $85.5 million, $46.3 million, and $210.1 million for the years ended December 31, 2025, 2024, and 2023, respectively, and as of December 31, 2025 we had an accumulated deficit of approximately $2.3 billion.
Our cash flows from operations were negative for the years ended December 31, 2025 and 2023 and positive for the year ended December 31, 2024, and we may not generate positive cash flow from operations in any given period.
See the risk factor entitled " We may require additional capital to support business growth, and this capital might not be available on acceptable terms, or at all." If we are unable to successfully address these risks and challenges as we encounter them, our business may be harmed, which could negatively affect the value of our common stock.
Our long-term success depends on maintaining and continuing to improve CA, and the expansion of CA to external partners, as such, our past results may not be indicative of future performance.
See the risk factor entitled " Our launch of Counterpart Assistant as a Software-as-a-Service (“SaaS”) product for external payors and providers serving the Medicare eligible population may not be successful, and, as a result, our business may be adversely affected." Our launch of Counterpart Assistant as a Software-as-a-Service (“SaaS”) product for external payors and providers serving the Medicare eligible population may not be successful, and, as a result, our business may be adversely affected.
See the risk factors entitled " Our failure to protect our sites, networks, and systems against security breaches, or otherwise to protect our confidential or health information or the confidential or health information of our members, providers, or other third parties, could damage our reputation and brands, and substantially harm our business and results of operations" and " Our use and disclosure of personally identifiable information, including health information, is subject to federal and state privacy and security regulations.
See the risk factor entitled "If we fail to estimate, price for and manage medical expenses in an effective manner, the profitability of our business could decline, which could materially and adversely affect our results of operations, financial condition, and cash flows." Our future performance also depends on utilizing our clinical care capabilities to improve the quality of care for our members so that they remain members.
For example, Clover Assistant is now available to external payors and providers serving the Medicare eligible population under the brand name Counterpart Assistant, which is housed in our subsidiary Counterpart Health.
A number of factors could potentially negatively affect provider adoption and use of Clover Assistant, including, but not limited to: • difficulties convincing providers of the value, benefits, and usefulness of Clover Assistant, and continued physician participation in the Clover Assistant program, particularly in markets where we have fewer members; • our failure to integrate with EHR systems; • our failure to attract, effectively train and retain effective sales and marketing personnel; • our failure to market, sell and deploy Counterpart Assistant; • our failure to develop or expand relationships with strategic partners; • our failure to capitalize on co-branding opportunities; • experiencing unfavorable shifts in perception of Clover Assistant; • delays in implementation of CMS interoperability requirements; • difficulties in scheduling meetings with providers, and providing demonstrations and trainings related to Clover Assistant; • our failure to compete effectively against alternative products or services, including overcoming perceptions that existing systems, including EHR systems, are similar and adequate, or that Clover Assistant will increase administrative burdens; • technical or other problems impacting availability or reliability of the platform and frustrating the experience of members or providers, including limited broadband access in certain rural areas; • difficulties for members in accessing their providers and a corresponding decrease in the number of primary care visits; • privacy and communication, safety, security or other similar concerns; • adverse changes in our platform that are mandated by, or that we elect to make, to address legislation, regulatory authorities or litigation; • poor user experiences; and • lack of brand recognition.
CMS's risk adjustment payment system makes our revenues and profitability difficult to predict and could result in material retroactive adjustments to our results of operations.
CMS has implemented a risk adjustment payment system for Medicare health plans to improve the accuracy of payments and establish appropriate compensation for Medicare plans that enroll and treat less healthy Medicare members.
CMS's risk adjustment model bases a portion of the total CMS reimbursement payments on various clinical and demographic factors, including hospital inpatient diagnoses, diagnosis data from hospital outpatient facilities and provider visits, gender, age, and Medicaid eligibility.
Our ability to obtain additional capital will depend on our development efforts, business plans, investor demand, operating performance, the condition of the credit markets and capital markets, other volatility or disruptions impacting financial markets, and other factors.
Additionally, the number of l ives under Clover management is critical to our success, and we are continually executing several growth initiatives, strategies, and operating plans designed to maintain or increase the number of l ives under Clover management.
We may not be able to successfully execute on these initiatives, strategies, and operating plans, and even if we are able to successfully execute on these initiatives, we may not fully realize the expected potential benefits, including achieving cost savings, better plan economics and more affordable healthcare.
See the risk factor entitled " If we fail to estimate, price for and manage medical expenses in an effective manner, the profitability of our business could decline, which could materially and adversely affect our results of operations, financial condition, and cash flows.
" We may not be able to successfully maintain our current growth or achieve future growth for a number of reasons.
Our ability to attract and retain members may be impacted by several factors, including, without limitation: • lack of brand recognition for our MA plans; • difficulties developing strategic co-marketing relationships; • general lack of shopping for plans by MA eligible members; • shifting consumer preferences, including a preference by members to enroll with an MA plan sponsored by the insurer of the commercial plan in which they enrolled before they became eligible for Medicare, and a preference by members to enroll in various special needs plans, which we do not offer; • a failure to effectively compete and offer low cost and high value plans; • difficulties establishing an attractive network in new markets; • regulatory changes affecting the overall pool of MA eligible members; and • difficulties growing our provider networks and contracting with providers and medical facilities on competitive terms.
Failure to effectively manage our growth could also lead us to over-invest or under-invest in development and operations, result in weaknesses in our infrastructure, systems or controls, give rise to operational mistakes, financial losses, loss of productivity or business opportunities and result in loss of employees and reduced productivity of remaining employees.
If our management is unable to effectively manage our growth, our revenue may not increase (including sufficiently to offset our expenses) or may grow more slowly than expected, and we may be unable to implement our business strategy.
At December 31, 2025, approximately 87% of our members, most of whom were in two metropolitan areas, were residents of New Jersey.
We compete in certain segments within the healthcare market, including MA plans as well as other healthcare technology platforms and the fee-for-service market.
Our competitors generally include large, national insurers, such as United Health, Aetna, Humana, Centene, and Elevance Health that provide MA plans, as well as regional-based companies or health plans that provide MA plans, including Blue Cross Blue Shield affiliates, Alignment Health, Devoted Health, Oscar Health, hospital systems and provider-based organizations.
Competition from these and other new entrants may intensify as the fee-for-service market develops and business models evolve to address it.
As a result, our current and potential competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or client requirements.
Further, even if our product or service offerings are more effective than the product or service offerings of our competitors, current or potential provider users and members might select competitive products and services in lieu of purchasing our product or service offerings.
Our competitors may also provide more desirable products or services or take better care of their members.
New competitors or alliances may emerge that have greater market share, a larger member base, a stronger and larger provider network, more widely adopted proprietary technologies, greater ability to care for their members, greater marketing expertise, or greater financial resources and larger sales forces than we have, which could put us at a competitive disadvantage.
Low-income cost subsidies represent payments from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income members.
The promotion of our brands, including in Counterpart Assistant, may require us to make substantial investments, and we anticipate that, as our market becomes increasingly competitive, these marketing initiatives may become increasingly difficult and expensive.
In addition, continued growth in our member and provider base could place additional demands on our Clover Assistant platform and our technical operations infrastructure and could cause or exacerbate slowdowns or interrupt the availability of our platform and operations.
We use machine learning and AI technologies as part of our Clover Assistant platform, and we are making investments in expanding our AI capabilities in our products, services, and tools, including ongoing deployment and improvement of existing machine learning and AI technologies, as well as developing new product features using AI technologies, including, for example, generative AI.
Our business, results of operations, and financial condition may fluctuate on a quarterly and annual basis and could fall below the expectations of investors and securities analysts due to a number of factors, many of which are beyond our control, resulting either in volatility or a decline in the price of the shares of our Class A common stock.
Factors that may contribute to the variability of our operating results include: • the timing of the enrollment periods and related sales and marketing expenses; • the timing of risk adjustments; • the addition or loss of large hospital and healthcare systems in our provider network, including due to acquisitions or consolidations of such systems; • the timing of recognition of revenues, including possible delays in the recognition of revenues; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure; • our ability to effectively manage the size and composition of our clinical programs relative to the level of demand for services from our members; • the timing and success of introductions of new products and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, hospital and healthcare systems, or strategic partners; • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; • the timing and/or delays in rolling out technology or platform updates; • technical difficulties or interruptions in Clover Assistant; • our ability to increase provider adoption of Clover Assistant; • our ability to market, sell and deploy Counterpart Assistant through our subsidiary Counterpart Health; • breaches of information security or privacy, and any associated fines or penalties or damage to our reputation; • our ability to hire and retain qualified personnel; • changes in the structure of healthcare provider and payment systems; • changes in the legislative or regulatory environment, including with respect to healthcare, telehealth, privacy, or data protection, AI, or enforcement by government regulators, including fines, orders, sanctions, or consent decrees; • the cost and potential outcomes of ongoing or future regulatory audits, investigations, or litigation; • changes in our and our competitors' pricing policies; and • changes in business or macroeconomic conditions.
Our business may be affected by conditions and trends in the financial markets and general economic and political conditions, including the current presidential administration and Congress.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, higher cost of human capital, geopolitical uncertainty and instability, including inflation, fluctuations in interest rates, changes in tax and trade policies and uncertainty about economic stability.
Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the current presidential administration and Congress, and what challenges budget reductions, if any, will present for our business and our industry generally.
While DOGE was officially disbanded as a governmental organization in 2025, many of its functions and personnel were absorbed into various federal agencies, and its principles and agenda to cut waste and modernize operations may continue in other forms.
With respect to Clover Care Services (Clover's in-home care offering), the direct provision of healthcare services by certain of our subsidiaries involves risks arising from medical malpractice claims relating to the delivery of healthcare and related services.
A significant portion of our software research and development is performed internationally, by internal resources and a variety of offshore vendors in locations such as Hong Kong and elsewhere.

and 31 more.

Gone since FY2024

We have incurred net losses of $46.3 million, $210.1 million, and $254.6 million for the years ended December 31, 2024, 2023, and 2022, respectively, and as of December 31, 2024 we had an accumulated deficit of approximately $2.2 billion.
Our cash flow from operations was negative for the years ended December 31, 2023, and 2022, and we may not generate positive cash flow from operations in any given period.
See the section entitled "— We may require additional capital to support business growth, and this capital might not be available on acceptable terms, or at all." If we are unable to successfully address these risks and challenges as we encounter them, our business may be harmed, which could negatively affect the value of our common stock.
Our long-term success depends on maintaining and continuing to improve Clover Assistant, and our past results may not be indicative of future performance.
Our launch of Counterpart Assistant as a Software-as-a-Service (“SaaS”) product for external payors and providers serving the Medicare eligible population may not be successful, and, as a result, our business may be adversely affected.
See the sections entitled “— Our failure to protect our sites, networks, and systems against security breaches, or otherwise to protect our confidential or health information or the confidential or health information of our members, providers, or other third parties, could damage our reputation and brands, and substantially harm our business and results of operations ” and —" Our use and disclosure of personally identifiable information, including health information, is subject to federal and state privacy and security regulations.
See the section entitled "—If we fail to estimate, price for and manage medical expenses in an effective manner, the profitability of our business could decline, which could materially and adversely affect our results of operations, financial condition, and cash flows." Our future performance also depends on utilizing our clinical care capabilities to improve the quality of care for our members so that they remain members.
On May 29, 2024, we announced that Clover Assistant would be made available to external payors and providers serving the Medicare eligible population under the brand name Counterpart Assistant, which is housed in our subsidiary Counterpart Health.
A number of factors could potentially negatively affect provider adoption and use of Clover Assistant, including, but not limited to: • difficulties convincing providers of the value, benefits, and usefulness of Clover Assistant, and continued physician participation in the Clover Assistant program, particularly in markets where we have fewer members; • our failure to integrate with EHR systems; • our failure to attract, effectively train and retain effective sales and marketing personnel; • our failure to market, sell and deploy Counterpart Assistant; • our failure to develop or expand relationships with strategic partners; • our failure to capitalize on co-branding opportunities; • delays in implementation of CMS interoperability requirements; • difficulties in scheduling meetings with providers, and providing demonstrations and trainings related to Clover Assistant; • our failure to compete effectively against alternative products or services, including overcoming perceptions that existing systems, including EHR systems, are similar and adequate, or that Clover Assistant will increase administrative burdens; • technical or other problems impacting availability or reliability of the platform, including limited broadband access in certain rural areas; • difficulties for members in accessing their providers and a corresponding decrease in the number of primary care visits; • privacy and communication, safety, security or other similar concerns; • adverse changes in our platform that are mandated by, or that we elect to make, to address legislation, regulatory authorities or litigation; • poor user experiences; and • the lack of brand recognition.
CMS' risk adjustment payment system makes our revenues and profitability difficult to predict and could result in material retroactive adjustments to our results of operations.
CMS has implemented a risk adjustment payment system for Medicare health plans to improve the accuracy of payments and establish appropriate compensation for Medicare plans that enroll and treat less healthy Medicare beneficiaries.
CMS' risk adjustment model bases a portion of the total CMS reimbursement payments on various clinical and demographic factors, including hospital inpatient diagnoses, diagnosis data from hospital outpatient facilities and provider visits, gender, age, and Medicaid eligibility.
Our ability to obtain additional capital will depend on our development efforts, business plans, investor demand, operating performance, the condition of the credit markets and capital markets, and other volatility or disruptions impacting financial markets, and other factors.
Additionally, the number of l ives under Clover management is critical to our success, and we are continually executing several growth initiatives, strategies, and operating plans designed to maintain or increase the number of Lives under Clover Management.
We may not be able to successfully execute on these initiatives, strategies, and operating plans even if we are able to successfully execute on these initiatives, we may not fully realize the expected potential benefits, including achieving cost savings, better plan economics and more affordable healthcare.
See the section entitled " —If we fail to estimate, price for and manage medical expenses in an effective manner, the profitability of our business could decline, which could materially and adversely affect our results of operations, financial condition, and cash flows.
" While we intend to continue to maintain or grow our membership by increasing our share in existing service areas and entering into new service areas, we may not be able to successfully maintain our current growth or achieve future growth for a number of reasons.
Our ability to attract and retain members may be impacted by several factors, including, without limitation: • lack of brand recognition for our MA plans; • difficulties developing strategic co-marketing relationships; • general lack of shopping for plans by MA eligible beneficiaries; • shifting consumer preferences, including a preference by members to enroll with an MA plan sponsored by the insurer of the commercial plan in which they enrolled before they became eligible for Medicare, and a preference by members to enroll in various special needs plans, which we do not offer; • a failure to effectively compete and offer low cost and high value plans; • difficulties establishing an attractive network in new markets; • regulatory changes affecting the overall pool of MA eligible beneficiaries; and • difficulties growing our provider networks and contracting with providers and medical facilities on competitive terms.
At December 31, 2024, approximately 91% of our members, most of whom were in two metropolitan areas, were residents of New Jersey.
We compete in certain segments within the healthcare market, including MA plans as well as other healthcare technology platforms and the FFS market.
Our competitors generally include large, national insurers, such as United Health, Aetna, Humana, Cigna, Centene, and Elevance Health that provide MA plans, as well as regional-based companies or health plans that provide MA plans, including Blue Cross Blue Shield affiliates, Alignment Health, Devoted Health, Oscar Health, hospital systems and provider-based organizations.
Competition from these and other new entrants may intensify as the FFS market develops and business models evolve to address it.
Our competitors may also provide more desirable products or services or take better care of their beneficiaries.
New competitors or alliances may emerge that have greater market share, a larger member base, a stronger and larger provider network, more widely adopted proprietary technologies, greater ability to care for their beneficiaries, greater marketing expertise, or greater financial resources and larger sales forces than we have, which could put us at a competitive disadvantage.
Low-income cost subsidies represent payments from CMS for all or a portion of the deductible, the coinsurance and co-payment amounts above the out-of-pocket threshold for low-income beneficiaries.
The promotion of our brands, including in our relatively new brand of Counterpart Assistant, may require us to make substantial investments, and we anticipate that, as our market becomes increasingly competitive, these marketing initiatives may become increasingly difficult and expensive.
In addition, continued growth in our beneficiary and provider base could place additional demands on our Clover Assistant platform and our technical operations infrastructure and could cause or exacerbate slowdowns or interrupt the availability of our platform and operations.
We use machine learning and artificial intelligence technologies as part of our Clover Assistant platform, and we are making investments in expanding our artificial intelligence capabilities in our products, services, and tools, including ongoing deployment and improvement of existing machine learning and AI technologies, as well as developing new product features using AI technologies, including, for example, generative AI.
Our business, results of operations, and financial condition may fluctuate on a quarterly and annual basis and could fall below the expectations of investors and securities analysts due to a number of factors, some of which are beyond our control, resulting either in volatility or a decline in the price of the shares of our Class A common stock.
Factors that may contribute to the variability of our operating results include: • the timing of the enrollment periods and related sales and marketing expenses; • the timing of risk adjustments; • the addition or loss of large hospital and healthcare systems in our provider network, including due to acquisitions or consolidations of such systems; • the timing of recognition of revenues, including possible delays in the recognition of revenues; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure; • our ability to effectively manage the size and composition of our clinical programs relative to the level of demand for services from our members; • the timing and success of introductions of new products and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, hospital and healthcare systems, or strategic partners; • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill from acquired companies; • the timing and/or delays in rolling out technology or platform updates; • technical difficulties or interruptions in Clover Assistant; • our ability to increase provider adoption of Clover Assistant; • our ability to market, sell and deploy Counterpart Assistant through our subsidiary Counterpart Health; • breaches of information security or privacy, and any associated fines or penalties or damage to our reputation; • our ability to hire and retain qualified personnel; • changes in the structure of healthcare provider and payment systems; • the incoming presidential administration, and changes in the legislative or regulatory environment, including with respect to healthcare, telehealth, privacy, or data protection, artificial intelligence, or enforcement by government regulators, including fines, orders, sanctions, or consent decrees; • the cost and potential outcomes of ongoing or future regulatory audits, investigations, or litigation; • changes in our and our competitors' pricing policies; and • changes in business or macroeconomic conditions.
Our business may be affected by conditions and trends in the financial markets and general economic and political conditions, including the new presidential administration and Congress.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions, higher cost of human capital, geopolitical uncertainty and instability, including heightened rates of inflation, higher interest rates, changes in tax and trade policies and uncertainty about economic stability.
Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new presidential administration and Congress, and what challenges budget reductions, if any, will present for our business and our industry generally.
With respect to Clover Home Care, the direct provision of healthcare services by certain of our subsidiaries involves risks arising from medical malpractice claims relating to the delivery of healthcare and related services.
Substantially all of our software research and development is performed internationally, by internal resources and a variety of offshore vendors in locations such as Hong Kong and elsewhere.
For example, in 2024, one of our vendors, UnitedHealth Group’s Change Healthcare, experienced a security breach, which compromised certain of our members’ personal information (including protected health information).
In addition, acquisitions of our partners by our competitors could result in a decrease in the number of our members and provider users, as our partners may no longer facilitate the enrollment of Medicare-eligible beneficiaries into, or the effective and efficient operations of, our business or the adoption of Clover Assistant by providers.
Even if we are successful, there can be no assurance that these relationships will result in increased revenues or an increase in the number of beneficiaries or provider users of Clover Assistant.
See the section entitled "— Our business activities are highly regulated, and new and proposed government regulation or legislative reforms could increase our cost of doing business and reduce our number of members, profitability, and liquidity." Litigation and audits, investigations or reviews by governmental authorities or regulators may result in substantial costs and may divert management's attention and resources, which may substantially harm our business, financial condition, and results of operations.
On June 14, 2024, the Company announced that CMS had recalculated the Company's 2024 Star ratings for its PPO Medicare Advantage plans for the 2025 payment year, and had increased such plans’ rating by 0.5 Star, to a revised rating of 3.5 Stars.

and 23 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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