Q3 2025 Clover Health Investments Corp Earnings Call
Speaker #1: Hello and welcome to Closer Health's third quarter 2025 earnings call . We ask that you please hold all questions until the completion of the formal remarks , at which time you'll be given instructions for the question and answer session .
Speaker #1: Also , as a reminder , this conference is being recorded today . If you have any objections , please disconnect at this time .
Speaker #1: Ryan , you may begin .
Speaker #2: Good afternoon everyone . Joining me on our call today to discuss the company's third quarter 2025 results are Andrew Toy . Clover Health Chief Executive Officer and Peter Kuipers .
Speaker #2: The company's chief officer . You can find today's press release and the accompanying supplemental slides , as well as the company's most recent investor deck in the investor events and Presentations section of our website at investors .
Speaker #2: Com . This webcast is being recorded and a replay will be available in the Investor Relations section of the Clover Health website . I'd also like to caution you that we may make forward looking statements during today's call that are subject to risks and financial future performance .
Speaker #2: Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings , including in the Risk Factors section of our most recent Annual Report on Form 10-K and other SEC filings .
Speaker #2: Information about non-GAAP financial measures referenced , including a reconciliation of those measures to GAAP measures , can be found in the earnings materials available on our website .
Speaker #2: With that , turn the call over to I'll now .
Speaker #2: Andrew
Speaker #3: Thank you . Ryan . And welcome everyone to Clover's third quarter earnings call . There are three main areas I want to focus on today .
Speaker #3: Firstly , that our growth engine is running well and we remain focused on growing sustainably and profitably . Secondly , taking everyone through the drivers of our lowered guidance for 2025 adjusted EBITDA profitability and what we're doing to address it .
Speaker #3: In short , we do see broad systemic utilization pressure . But this is also compounded by our growth . We feel we can address this , but it did hit us significantly in 2025 .
Speaker #3: Because of that growth . And thirdly , talking about our recently announced star ratings and how we intend to ensure we can grow profitably , whether at three and a half or four stars overall , I want to say this we missed our targets on both overall adjusted EBITDA and stars .
Speaker #3: While we will remain profitable and growing , these misses aren't at all acceptable to us . They do not capture our aspiration or bar for the company .
Speaker #3: We can and will make quick adjustments . The good news is that Clover Assistant remains incredibly strong as our core driver . Our managed returning cohorts improved year over year .
Speaker #3: CA also enabled Clover to be the top PPO in the country for the second year running . On core clinical quality scores . The bad news is that while we did plan for growth and utilization headwinds , we clearly didn't factor those in strongly enough or manage those tightly enough in the non CA , which definitionally includes the new members .
Speaker #3: So those areas are where we're going to intensely refocus going into 2026 , which I think is going to be a big year for Clover .
Speaker #3: Okay . Going into more detail for the third quarter , we've remained adjusted EBITDA profitable on a wide network while growing membership by 35% .
Speaker #3: And revenue by nearly 50% year over year . That does meet our goal of profitable growth . Other plans which grew this much on the PPO , have been pushed into retreat .
Speaker #3: That said , I want to note that we did originally enter this year intending to have higher overall adjusted EBITDA . Even with the growth .
Speaker #3: Ultimately , this adjusted EBITDA pressure came firstly from the higher than expected proportion of new members and the fact that we didn't bring them under management as quickly as we originally planned .
Speaker #3: And secondly , we saw increased utilization across both medical expenses and supplemental benefits , similar to others in the industry . I'm going to focus on the first .
Speaker #3: And Peter will discuss more on this second . On an adjusted EBITDA basis , our returning members continue to have a contribution profit , but this did not fully offset the dilution from our significantly larger than expected new member growth .
Speaker #3: While we had anticipated this pressure from returning to growth , we captured additional market share as competitors retreated with the market disruption effectively accelerating our growth .
Speaker #3: This has led to reduced adjusted EBITDA profitability as the cost profile of first year members , which we see as a combination of marketing commissions and first year med , puts pressure on our results for the full year 2025 .
Speaker #3: We now expect to add roughly 44,000 gross new members within an expected year end 2025 population of approximately 113,000 net members . This has had a meaningful impact on our 2025 adjusted EBITDA profitability .
Speaker #3: As we are scaling from a relatively smaller base and new members are generally loss making for us in the first year . That said , our cohort experience and strong historical retention demonstrates that this large new population will bring a larger contribution profit positive base of returning members in 2026 and beyond .
Speaker #3: We also expect 2025 to be the peak year for this kind of effect . In our modeling , with our latest cohort data , we expect that we will be able to continue growth and have meaningful adjusted EBITDA profitability starting in 2026 .
Speaker #3: That was our goal for 2025 , but we were extrapolating new member performance as this was our first year of significant growth . Now that we have that under our belt , we feel more confident in our views on 2026 and beyond .
Speaker #3: Ultimately , we believe the fundamentals of our business remain strong and the margin pressure we're seeing this year is driven by cohort dynamics .
Speaker #3: Each new member represents strong , long term value , but requires time to come under full Clover assisted management . While that dynamic compresses margins in the near term , it's exactly what we believe builds the foundation for margin expansion and accelerated growth in the years ahead , where we anticipate rapid improvement in outcomes and cost performance in our cohorts .
Speaker #3: Said differently , our returning Clover assistant managed members remain strongly profitable and are effectively funding this reinvestment in acquiring and developing new member cohorts .
Speaker #3: Our confidence in Clover's trajectory is rooted in a simple truth . We believe that our model delivers better Medicare Advantage results for more seniors .
Speaker #3: Clover , assistant is designed to identify and manage disease earlier , providing a multiyear improvement to total cost of care . When paired with our care delivery assets and the close partnership of Clover Assistant using network providers , we see consistent medical cost management year over year .
Speaker #3: We're continually focused on increasing physician adoption and remain on pace with increasing our Clover assistant coverage across the book . With more than half of our new members already having received a Clover assistant visit this year , which is consistent with our internal targets .
Speaker #3: The combination of strong retention , more members , more CA engaged physicians , early disease detection leads to strong returning member cohort performance and reinforces the strength of our model and our ability to help manage conditions .
Speaker #3: Earlier and better for our members . Next , I'd like to discuss the current annual enrollment period . While it's too early to provide an AEP update in detail , I would preliminarily note that we remain on track to once again deliver strong above market membership growth and retention within our priority markets .
Speaker #3: These markets are the ones where we have strong CA network coverage and existing membership base , and our home care capability . Our plan offerings reflect exactly what Clover stands for .
Speaker #3: Low out of pocket costs , physician choice , and real value for seniors . While most of the industry is pulling back and narrowing networks , we've doubled down on maintaining a comprehensive PPO portfolio that prioritizes open access with stable , predictable benefits .
Speaker #3: We believe seniors deserve choice , access and simplicity , and our 2026 plans deliver all three . Turning now to star ratings . We received a three and a half star rating for the 2026 ratings year .
Speaker #3: This does not represent our aspiration . We want a four star plan . That said , let me start by explaining how our model is built to perform well , even in three and a half star patient years .
Speaker #3: Firstly , we do not view the star rating as an inhibitor for growth . Medicare Eligibles are attracted to low out of pocket costs with wide physician choice , and based on our experience , we anticipate strong attraction to our plans on that basis , independent of star rating .
Speaker #3: We also don't perceive the star rating as a true measure of overall healthcare quality . Our focus remains on delivering meaningful improvements in care and outcomes for our members , and one way this commitment shows up is in our immediate results .
Speaker #3: Clover assistant once again powered Clover to the top of the industry for clinical quality , with a score of 4.72 for PPO plans , making us the highest performing PPO in the country .
Speaker #3: On fetus measures . This reflects the consistent data driven care delivered through our technology and physician partnerships , which continue to improve members health in measurable ways .
Speaker #3: So while our focus remains on driving better patient outcomes , we believe that the current star ratings framework does not fully reflect the clinical quality of care our members receive .
Speaker #3: We continue to actively engage with CMS to advance how quality is measured and remain committed to working constructively toward a methodology that better captures true performance .
Speaker #3: Ultimately , though , we want a four star plan . We are walking through all areas that we underperformed on and making sure that we have plans in place , plans that also incorporate the significant growth that we have had and will continue to have .
Speaker #3: For example , while we were the top rated PPO plan in the country on quality , we were greatly let down on our star scores because of very low one and two star on our pharmacy measures .
Speaker #3: We are very focused here , and our intent on improving our performance in this area going forward . Now I'll provide a counterpart health update .
Speaker #3: The new organization continues to make strong progress , expanding both the reach and capabilities of our technology . During Q3 , we've rolled out major new capabilities such as integrated scribing and generative AI tools that help physicians better prepare for visits , reduce administrative burden , and stay focused on patient care .
Speaker #3: Also powered by CA and as I mentioned earlier , we've achieved scores industry leading clinical quality results for the second year in a row , and we've made this capability available as part of counterparts new enterprise offering .
Speaker #3: And lastly , we're seeing good demand . And so we've expanded our go to market team and leadership to support new partnership opportunities with provider groups .
Speaker #3: Health systems and both regional and national payers . Together , these advancements further establish counterpart health as a leading technology partner for value based care .
Speaker #3: The key for counterpart is this . Since its launch last year , we have seen tremendous resonance with health plans because our technology provides a capability to them that they've never had before .
Speaker #3: This capability is to engage smaller , independent doctors who typically manage around 20 to 30% of a given planned book . These doctors are often great physicians , but do not have the infrastructure to be successful in value based care , and almost no plan has a strategy to successfully engage them .
Speaker #3: Counterpart deployments have now shown in multiple states , and for multiple customers that we can effectively serve this market . And we've heard that resonance with our target customers .
Speaker #3: We believe this remains a huge blue ocean opportunity for us . And provides us the opportunity to bring our technology far beyond the reach of our owned and operated plans .
Speaker #3: In overall summary , our long term trajectory is unchanged . Our technology is scaling as we aim to empower more and more physicians .
Speaker #3: With Clover Assistant , and we're focused on growing our profitable returning member cohorts . We anticipate having a large contribution profit positive base of returning members in 2026 , and beyond , which will fund future new member growth .
Speaker #3: This year is just the start of that arc , and while we have several areas we need to improve , I feel strongly we are on the right path .
Speaker #3: I'll now turn it over to Peter , who will walk through our financial performance in more detail and how we're positioning the business for adjusted EBITDA .
Speaker #3: Profitable growth in 2026 and beyond .
Speaker #4: Thank you . Andrew . Before getting into the financials , I want to reiterate Andrew's comments that we remain confident in our long term trajectory to achieve sustained growth and expanding profitability despite increased utilization and margin pressure from a higher than expected mix of new members , relative to our returning base .
Speaker #4: Our year to date underlying incurred medical cost trends , excluding pharmacy for our entire population , remain strong , with a 4% increase year over year .
Speaker #4: We are pleased with this strong cost management that this trend has run above our initial expectations , combined with 35% membership and 39% insurance revenue growth year to date .
Speaker #4: We have maintained positive year to date adjusted EBITDA and adjusted net income . As we move into 2026 . We expect to build on our profitability base with several clear tailwinds impacting our model , including strong member retention .
Speaker #4: Are anticipated larger , profitable , returning member cohort , financial benefit from our increased payment year 2026 , four star rating . Further enhanced and expanded Clover Assistant capabilities .
Speaker #4: Our ability to increase PCP user adoption of Clover Assistant and continued operating leverage gains as we scale. We also expect to benefit from a favorable CMS Part C rate update and an increased Part D direct subsidy.
Speaker #4: Taken altogether , we believe that Clover is well positioned for above market growth and increasing profitability through 2026 and beyond . Most importantly , we expect to benefit from the strength of Clover Assistant and our returning member cohort management .
Speaker #4: As this year's large group of new members mature into returning members in 2026 . Our data has shown meaningful improvements as members mature within our care model , with roughly a 700 basis point improvement in MCR between year one and year two cohorts and a 1400 basis point improvement by year three .
Speaker #4: On average . Notably , we deliver more contribution profit from our profitable returning member cohorts than our new member cohorts . Returning member cohorts .
Speaker #4: During the third quarter , year to date , 2025 period have generated approximately $217 of contribution profit per member per month . As compared to a negative contribution of $110 per member per month for the new member cohorts , respectively .
Speaker #4: For this reason , as MCR new members mature into returning cohorts and we get more members under Clover assistant Powered care , we are confident to deliver strong financial performance in the coming years .
Speaker #4: We also have conviction in our ability to deliver continued strong returning member retention in 2026 . First , due to the continued industry disruption from competitor pullbacks that Andrew discussed and secondly , we believe that our current 2025 retention rate remains industry leading above 90% , reflecting the success of last year's EP period and our ability to continually retain members .
Speaker #4: Both of these dynamics together reinforce our confidence to better manage next year's membership mix and continue improving profitability as our cohorts mature . Under Clover , Assistant Care Management .
Speaker #4: Furthermore , our model is designed to perform profitably even in three and a half star patient years , with four star years serving as upsides rather than a dependency .
Speaker #4: We continue to see strong member demand for a wide network PPO offerings with low out of pocket costs and our heat score of 4.72 demonstrates that Clover Assistant consistently drives top tier clinical quality and outcomes across an open access PPO network , taking in aggregate driven by Clover Assistant and our differentiated model .
Speaker #4: Our current view is that we expect to achieve full year positive GAAP net income in 2026 as our maturing returning member cohorts and our technology centered approach further enhance performance and expand margins .
Speaker #4: Now returning to the third quarter , financials , Clover's Medicare Advantage membership grew 35% year over year to over 109,000 members , delivering insurance revenue of $479 million .
Speaker #4: An increase of 49% year over year . Year to date , insurance revenue was $1.4 billion , up 39% year over year . Next , I will discuss the margin pressure we observed in the third quarter .
Speaker #4: Despite an elevated utilization trend and more new members compared to expectations . A year to date . Underlying incurred medical cost trends , excluding pharmacy for our entire population remain strong , with a 4% increase year over year .
Speaker #4: On an adjusted EBITDA basis , returning members continue to be accretive to contribution profit . Although this impact was partly offset by a negative contribution profit from our new member cohort impacting this trend is stronger than anticipated intra year new member growth as where our expecting to absorb more than 44,000 gross new members this year from a relatively smaller returning member base .
Speaker #4: The stronger growth was impacted by other plans dramatically shifting their offerings in 2025 by reducing benefits , shutting down commissions and fully exiting markets .
Speaker #4: Earlier this year , resulting in lower new member core performance than initial expectations . Specifically , medical costs in the third quarter were impacted from unfavorable claims .
Speaker #4: Development related to the first half of 2025 . Dates of service . We saw higher medical cost trends across inpatient and outpatient services related to a number of high cost claims , outpatient oncology and inpatient cardiac and surgical procedures .
Speaker #4: This is consistent with broader industry reports related to elevated hospital utilization in recent months . Importantly , we feel that we have adequately accounted for these trends , developments in our updated 2025 guidance .
Speaker #4: Turning now to part D comparing year over year performance is structurally difficult given the changes in the IRA . This year . That said , the continued part D pressures that we and others in the industry discussed last quarter are higher versus expectations .
Speaker #4: We feel that we've performed well on part D this year , but we expect it . And intend to do better in particular , we have seen pressure in branded and nonformulary pharmacy spend for this reason , we have launched ongoing initiatives around medication reconciliation , generic substitution and care coordination to optimize part D in 2026 , while maintaining access .
Speaker #4: And we feel confident that next year's higher Part D direct subsidy will also help normalize the pressures across the industry. Lastly, we've seen some abnormal activity within both dental and DME that we're actively addressing.
Speaker #4: And pursuing recovery and improvement activities for . We do not believe that this abnormal activity will persist into 2026 . On a reported basis , year to date .
Speaker #4: Burr was 89.4% . This is a year over year increase of 880 basis points compared to the prior year period . That said , I want to emphasize that after normalizing for prior year developments in both reporting periods , year to date , Burr increased by 400 basis points .
Speaker #4: Moving next to SG&A , we continue to execute well with cost discipline generating strong operating leverage . Third quarter adjusted SG&A totaled $71 million , or 14% of revenue , representing a 440 basis point improvement or reduction year over year .
Speaker #4: Year to date , adjusted SG&A was $237 million , or 17% of revenue , improving 370 basis points a year over year . As discussed previously , our ongoing Fender contract reviews and negotiations with a focus on improved SLAs and benefits from pricing at scale are continuing .
Speaker #4: Our progress highlights the operating leverage we are achieving even as we continue to invest in growth , technology and higher quality care management .
Speaker #4: Despite the aforementioned margin pressures , we have achieved both positive adjusted EBITDA and positive adjusted net income year to date . This underscores the resilience of our model and our ability to manage costs .
Speaker #4: Effectively while scaling the business . Both adjusted EBITDA and adjusted net income for the third quarter were $2 million each , down $70 million year over year .
Speaker #4: Year to date , adjusted EBITDA and adjusted net income remain positive at $45,000,044 million , respectively . Our year to date adjusted EBITDA profitability , despite the higher proportion of new members relative to returning members , underscores the scalability of our model and our disciplined execution in managing our strong returning cohorts .
Speaker #4: That said , we do expect the elevated trend we've experienced during the third quarter to continue in the fourth quarter , along with typical fourth quarter Medicare Advantage seasonality .
Speaker #4: Moving on to the balance sheet , we ended the third quarter with cash . Cash equivalents and investments totaling $396 million on a consolidated basis with $122 million at the unregulated subsidiary level .
Speaker #4: During the third quarter of 2025 , cash flow from operating activities was $12 million . We expect that our cash balances will remain strong for the remainder of 2025 , which will allow us to continue to operate from a position of strength as we invest in our growth model in 2026 and beyond .
Speaker #4: Importantly , we believe that we will continue to be self-funding as we execute on our growth strategy . Turning to guidance , we are revising our full year 2025 outlook to reflect the membership growth and utilization trends .
Speaker #4: We've seen year to date . We are increasing our Medicare Advantage membership guidance to now average between 106 and 108,000 members , reflecting 33% growth year over year at the midpoint and continued intra year growth this year .
Speaker #4: We are increasing our insurance revenue guidance to be between 1 billion and $850 million and $1,000,000,880 million , reflecting year over year growth of 39% at the midpoint of the range .
Speaker #4: We are improving our adjusted SG&A guidance to be between $325 million and $335 million . This represents adjusted SG&A as a percentage of total revenue of 17 to 18% , and is in approximate 400 basis point decrease or improvement year over year .
Speaker #4: At the midpoint of the range, this reflects our continued ability to gain operating leverage in our business as we grow. We are lowering both adjusted EBITDA and adjusted net income guidance to be between $15 million and $30 million.
Speaker #4: This primarily reflects pressures related to our greater proportion of new members relative to our returning member base , and higher utilization trends . Lastly , we are updating our insurance guidance to a range of 90% to 91% , which reflects the elevated utilization trends .
Speaker #4: We've seen this year , as well as the impact of our strong new membership growth . Our view of the long term trajectory of the business and our confidence in our ability to achieve sustainable and increasing profitability is unchanged .
Speaker #4: We expect a meaningful increase in profitability in 2026 , driven by multiple factors . First , we anticipate strong returning member retention , with continued improved cohort economics of our expected larger , profitable returning member cohorts , along with continued favorable performance from our year three and older cohorts .
Speaker #4: Second , a four star payment year for PPO plans creates meaningful financial tailwinds as approximately 97% of our members are enrolled in wide network PPO offerings .
Speaker #4: Third , continued focus on increasing Clover assistant coverage and PCP adoption , and further investing in enhancing the platform's capabilities . Fourth , a focus on more cost efficient growth channels .
Speaker #4: Fifth , a favorable impact from the part C CMS final rate notice announced earlier this year , as well as from the significantly higher part D direct subsidy .
Speaker #4: Lastly , we expect incremental efficiencies from continued SG&A leverage and optimization across variable fixed and growth expense categories . In summary , we continue to execute well against our long term strategy .
Speaker #4: We are growing membership and revenue at an above market pace while achieving adjusted EBITDA profitability year to date . Combined with a strong returning member cohort performance .
Speaker #4: Clover Assistant model differentiation and multiple tailwinds. We believe that Clover is positioned well for meaningful adjusted EBITDA expansion in 2026 and beyond.
Speaker #4: Now , I'll turn the call back to Andrew for closing comments .
Speaker #3: In closing , despite margin pressure , this year , we continue to deliver a stable underlying medical trend . High retention and strong returning profitable member cohorts .
Speaker #3: As such , we remain comfortable with our go forward medical cost trend heading into 2026 and feel confident to deliver continued profitability as our flywheel will spin even harder next year when we expect to have a larger returning member base managed by Clover , assistant .
Speaker #3: Importantly , Clover assistant continues to perform exactly as designed , helping physicians identify and manage disease . Earlier , improving outcomes , and lowering costs over time .
Speaker #3: I remain excited about the potential we see for AI to improve the care received by our Clover members , and all Medicare beneficiaries .
Speaker #3: I recently testified to Congress on AI in healthcare , where I emphasized that AI , when used properly , can be a powerful tool to drive clinical results and enhance members access to personalized care .
Speaker #3: You can see this in our results . We recently published another clinical white paper highlighting how Clover Assistant helps Pcp's provide better care for members in underserved communities .
Speaker #3: The analysis reveals more frequent identification of diabetes , CKD , COPD , and CHF among members from disadvantaged areas . Joining a Clover Ma plan from another Ma plan in the first year .
Speaker #3: Post-enrollment, we also see the diagnosis occur at earlier clinical stages of diabetes and CKD. The analysis also showed that members with any of these diseases of aging who were seeing capture had less frequent hospitalizations and readmissions.
Speaker #3: These results reinforce that Clover assistant not only helps improve outcomes across our plan , but also uniquely supports smaller resource constrained practices in both urban and rural underserved regions where better data and coordinated care can make the greatest difference .
Speaker #3: Taken together , our strong growth cohort management disciplined execution , and expanding technology capabilities give us confidence in our ability to continue to achieve profitability in 2026 and beyond .
Speaker #3: While growing above market, with that, let's open it up for questions.
Speaker #1: Thank you . At this time , if you'd like to ask a question , please click on the Raise Hand button , which can be found on the black bar at the bottom of your screen .
Speaker #1: When it's your turn , you'll receive a message on your screen from the host , allowing you to talk , and then you'll hear your name called .
Speaker #1: Please accept the unmute your audio and ask your question . After every two questions , we'll move on to the next panelist in the queue .
Speaker #1: Once we've gone through the initial round, anyone who would like to ask a follow-up question is welcome to re-enter the queue by raising their hand again.
Speaker #1: We'll wait for a moment to allow the queue to form . Our first question will come from Jonathan Young from UBS . Please unmute and ask your question .
Speaker #5: Hey, thanks. Can you guys hear me?
Speaker #3: Yep . Go ahead . Jonathan .
Speaker #6: Yeah .
Speaker #5: Okay . Okay . Thanks . Obviously you got the elevated utilization in the quarter . Last quarter , you had pharmacy and dental issues , and now it's inpatient .
Speaker #5: Outpatient alongside other supplemental benefits . I'm trying I'm trying to frame out how we should think about 2026 from a bigger perspective . Like , I understand that the stars will be better .
Speaker #5: These these cohorts will mature . But at the same time , you're also going to grow what seems to be fairly significant . And I'm fairly certain your benefits have gotten richer .
Speaker #5: So how do you plan on did . Is there a mispricing issue that that may have occurred for 2026 , given what's occurring here , or are you fairly confident that this is encapsulated in your bids and that you won't see a problem in 26 , given what you're kind of experiencing now with outsized growth ?
Speaker #5: And that seems to be the driver of the pressure here .
Speaker #4: Hey , Jonathan , it's Peter . Let me let me answer that question . So if you look at our earnings release and the prepared remarks on the normalized basis , excluding prior year PD to underlying incurred cost trends , excluding pharmacy is around 4% .
Speaker #4: So, given the higher utilization trend that we see, and also the higher mix of new members, we think that's a solid performance.
Speaker #4: Now we , like we said in the prepared remarks , we had expected to do better . So we'll work on that for next year .
Speaker #4: I would say that that cost trend roughly is baked into the into the bid as well . But that's just one part , right ?
Speaker #4: We have a number of other tailwinds, as well as the four-star payment year notice on Part C, and of course, the direct subsidy as well.
Speaker #4: On on part D plus then SG&A increased . That doesn't impact BR , of course , but so we feel that as baked in into our bid .
Speaker #4: And then also I would also say like we said in the past , we're nuclear precise of where we do our marketing and target our growth .
Speaker #4: We're focusing on so-called priority markets . That meet a couple of conditions . One , where we have a solid Clover member base already .
Speaker #4: We also have those priority markets . Could coverage from Clover system perspective and home care perspective as well . So we're targeting growing in the areas that we want to grow .
Speaker #4: And that should also help be our go forward .
Speaker #5: Okay . And then just just looking at your guidance here , I think if I were to just kind of putting the numbers together here , it looks like the BR does step up , but it if I look at kind of the core MCR basis , it almost seems to imply that it actually steps down .
Speaker #5: I'm just trying to understand is is the is there anything specific for how we should think about for Q or are you guys seeing anything specific that would seem to imply that it actually steps down , or maybe my math is wrong here .
Speaker #5: Thanks .
Speaker #4: Are you looking at three Q to four Q or looking at nine months ? To the fourth quarter ?
Speaker #5: 33Q to four Q because it looks like you did a 89.5 in 3 Q and it seems to imply steps out .
Speaker #6: Exactly . Yeah . I think the we can refer back to the .
Speaker #4: Prepared remarks in my section where we talked about essentially intra year PD from the second half impacting the third , the third quarter .
Speaker #4: So the real the way to look at is really averaging out the first three quarters to get to kind of like a baseline expectation for the fourth quarter .
Speaker #5: Okay . Thanks .
Speaker #4: Yeah .
Speaker #7: Thank you .
Speaker #1: Thank you . As a reminder , if you do have a question , you can use the raise hand button at the bottom of your zoom screen .
Speaker #1: I'll just wait for another moment to allow any further questions to form a Q . Okay . Well , there are no further questions on the webinar .
Speaker #1: I'll now turn the call back over to Andrew Toy for any closing remarks .
Speaker #3: All right , folks , thanks everyone for joining us today . Thank you , Jonathan , for the questions . We appreciate everyone's continued in Clover .
Speaker #3: And we look forward to updating you all on our progress in the quarters ahead as we go into 2026. Have a great evening, everyone.