Bright Health Group Reports Fourth Quarter and Full Year 2021 Results
Bright Health Group reported significant growth in 2021, achieving $4 billion in revenue, a 233.7% increase from 2020. However, it faced challenges, resulting in a GAAP net loss of $1.18 billion and an adjusted EBITDA loss of $1.08 billion. For 2022, the company expects revenue between $6.8 billion and $7.1 billion with a Medical Cost Ratio between 90% and 94%. Bright Health is serving over 1 million lives and aims to improve performance moving forward.
- Revenue growth of 233.7% year-over-year, reaching $4 billion in 2021.
- Projected revenue for 2022 expected to increase by 174% year-over-year.
- Served over 1 million health plan lives as of January 1, 2022.
- GAAP net loss of $1.18 billion for the full year 2021.
- Adjusted EBITDA loss of $1.08 billion in 2021.
- Medical Cost Ratio of 101.3%, indicating higher costs relative to revenue.
Fourth Quarter 2021
Revenue of
Adjusted EBITDA loss of
Full Year 2021
Revenue of
Medical Cost Ratio (“MCR”) of
Adjusted EBITDA loss of
Specific actions taken to improve performance in 2022
Full Year 2022 Guidance
Serving over 1 million lives as of
Revenue of
Adjusted EBITDA loss of
“Bright Health Group achieved substantial growth in 2021, delivering
Key Metrics |
|||
|
As of |
||
|
2021 |
|
2020 |
Consumer and Patient Metrics |
|
|
|
Bright HealthCare Commercial Consumers |
611,078 |
|
145,459 |
Bright HealthCare Medicare Advantage Consumers |
116,621 |
|
61,663 |
NeueHealth Value-Based Patients |
175,587 |
|
21,126 |
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
($ in thousands) |
|
|
|
||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Financial Metrics |
|
|
|
|
|
|
|
||||||||
Revenue |
$ |
962,334 |
|
|
$ |
359,778 |
|
|
$ |
4,029,389 |
|
|
$ |
1,207,320 |
|
Medical Cost Ratio(1) |
|
134.1 |
% |
|
|
105.4 |
% |
|
|
101.3 |
% |
|
|
88.7 |
% |
Operating Cost Ratio |
|
47.7 |
% |
|
|
41.3 |
% |
|
|
30.7 |
% |
|
|
33.9 |
% |
GAAP Net Loss (2) |
$ |
(813,375 |
) |
|
$ |
(163,832 |
) |
|
$ |
(1,178,365 |
) |
|
$ |
(248,442 |
) |
Adjusted EBITDA (non-GAAP) (2) |
$ |
(790,149 |
) |
|
$ |
(157,724 |
) |
|
$ |
(1,080,906 |
) |
|
$ |
(238,912 |
) |
(1) |
Medical Cost Ratio for the three months ended |
|
|
|
|
(2) |
GAAP Net Loss and Adjusted EBITDA (non-GAAP) include |
See the table at the end of this release for additional information and a reconciliation of the non-GAAP measure used in the table above.
Financial Outlook
For full year 2022,
-
Bright Health Group’s total Revenue is expected to be
to$6.8 billion with an expected enterprise Medical Cost Ratio between$7.1 billion 90% and94% . -
On a segment basis,
Bright HealthCare end-of-year membership is expected to be approximately 1,000,000, while NeueHealth Revenue is expected to be approximately .$2.3 billion -
Intercompany Revenue elimination, comprised of payments from
Bright HealthCare to NeueHealth for managing patient care and for network services, is expected to be approximately to$1.2 .$1.4 billion -
Adjusted EBITDA for 2022 is expected to be a loss of between
and$500.0 †.$800.0 million
Earnings Conference Call
As previously announced,
About
Notes
† A reconciliation of the projected Adjusted EBITDA, which is a forward-looking non-GAAP financial measure, to the most directly comparable GAAP financial measures, is not provided because the Company is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty predicting the occurrence, the financial impact and the periods in which the non-GAAP adjustments may be recognized. These GAAP measures may include the impact of such items as interest expense, income tax expense, depreciation and amortization, share-based compensation expense; transaction costs, changes in the fair value of contingent consideration, contract termination costs; and the tax effect of all such items. Historically, the Company has excluded these items from non-GAAP financial measures. The Company currently expects to continue to exclude these items in future disclosures of non-GAAP financial measures and may also exclude other items that may arise (collectively, “non-GAAP adjustments”). The decisions and events that typically lead to the recognition of non-GAAP adjustments, such as a decision to exit part of the business, are inherently unpredictable as to if or when they may occur. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
Forward-Looking Statements
Statements made in this release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as “anticipate,” “expect,” “plan,” “believe,” “intend,” “project,” “forecast,” “estimates,” “projections,” and other similar expressions. These forward-looking statements include any statements regarding our plans and expectations with respect to
Condensed Consolidated Balance Sheets (in thousands, except share and per share data) (Unaudited) |
|||||||
|
|
|
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
1,061,179 |
|
|
$ |
488,371 |
|
Short-term investments |
|
193,835 |
|
|
|
499,928 |
|
Accounts receivable, net of allowance of |
|
113,474 |
|
|
|
60,522 |
|
Prepaids and other current assets |
|
291,712 |
|
|
|
130,986 |
|
Total current assets |
|
1,660,200 |
|
|
|
1,179,807 |
|
Other assets: |
|
|
|
||||
Long-term investments |
|
675,192 |
|
|
|
175,176 |
|
Property, equipment and capitalized software, net |
|
38,344 |
|
|
|
12,264 |
|
|
|
835,140 |
|
|
|
263,035 |
|
Intangible assets, net |
|
343,860 |
|
|
|
152,211 |
|
Other non-current assets |
|
45,603 |
|
|
|
28,309 |
|
Total other assets |
|
1,938,139 |
|
|
|
630,995 |
|
Total assets |
$ |
3,598,339 |
|
|
$ |
1,810,802 |
|
Liabilities, Redeemable Noncontrolling Interest, Redeemable Preferred Stock and Shareholders’ Equity (Deficit) |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Medical costs payable |
$ |
817,975 |
|
|
$ |
249,777 |
|
Accounts payable |
|
118,140 |
|
|
|
57,252 |
|
Unearned revenue |
|
53,295 |
|
|
|
34,628 |
|
Risk adjustment payable |
|
931,170 |
|
|
|
187,777 |
|
Short-term borrowings |
|
155,000 |
|
|
|
— |
|
Other current liabilities |
|
207,238 |
|
|
|
35,847 |
|
Total current liabilities |
|
2,282,818 |
|
|
|
565,281 |
|
Other liabilities |
|
41,994 |
|
|
|
28,578 |
|
Total liabilities |
|
2,324,812 |
|
|
|
593,859 |
|
Redeemable noncontrolling interests |
|
128,407 |
|
|
|
39,600 |
|
Redeemable preferred stock, |
|
— |
|
|
|
1,681,015 |
|
Shareholders’ equity (deficit): |
|
|
|
||||
Common stock, |
|
63 |
|
|
|
14 |
|
Additional paid-in capital |
|
2,861,243 |
|
|
|
9,877 |
|
Accumulated deficit |
|
(1,700,851 |
) |
|
|
(515,989 |
) |
Accumulated other comprehensive (loss) income |
|
(3,335 |
) |
|
|
2,426 |
|
|
|
(12,000 |
) |
|
|
— |
|
Total shareholders’ equity (deficit) |
|
1,145,120 |
|
|
|
(503,672 |
) |
Total liabilities, redeemable noncontrolling interests, redeemable preferred stock and shareholders’ equity (deficit) |
$ |
3,598,339 |
|
|
$ |
1,810,802 |
|
Condensed Consolidated Statements of Income (Loss) (in thousands, except share and per share data) (Unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenue: |
|
|
|
|
|
|
|
||||||||
Premium revenue |
$ |
979,764 |
|
|
$ |
353,203 |
|
|
$ |
3,902,714 |
|
|
$ |
1,180,338 |
|
Service revenue |
|
11,099 |
|
|
|
5,170 |
|
|
|
42,701 |
|
|
|
18,514 |
|
Investment income |
|
(28,529 |
) |
|
|
1,405 |
|
|
|
83,974 |
|
|
|
8,468 |
|
Total revenue |
|
962,334 |
|
|
|
359,778 |
|
|
|
4,029,389 |
|
|
|
1,207,320 |
|
Operating expenses: |
|
|
|
|
|
— |
|
|
|
— |
|
||||
Medical costs |
|
1,313,531 |
|
|
|
372,186 |
|
|
|
3,953,674 |
|
|
|
1,047,300 |
|
Operating costs |
|
459,297 |
|
|
|
148,684 |
|
|
|
1,238,387 |
|
|
|
409,334 |
|
Depreciation and amortization |
|
9,503 |
|
|
|
2,739 |
|
|
|
35,484 |
|
|
|
8,289 |
|
Total operating expenses |
|
1,782,331 |
|
|
|
523,609 |
|
|
|
5,227,545 |
|
|
|
1,464,923 |
|
Operating loss |
|
(819,997 |
) |
|
|
(163,831 |
) |
|
|
(1,198,156 |
) |
|
|
(257,603 |
) |
Interest expense |
|
1,674 |
|
|
|
— |
|
|
|
7,956 |
|
|
|
— |
|
Other income |
|
— |
|
— |
|
— |
|
— |
|
(1,226 |
) |
— |
|
— |
|
Loss before income taxes |
|
(821,671 |
) |
|
|
(163,831 |
) |
|
|
(1,204,886 |
) |
|
|
(257,603 |
) |
Income tax (benefit) expense |
|
(8,296 |
) |
|
|
1 |
|
|
|
(26,521 |
) |
|
|
(9,161 |
) |
Net loss |
|
(813,375 |
) |
|
|
(163,832 |
) |
|
|
(1,178,365 |
) |
|
|
(248,442 |
) |
Net earnings attributable to noncontrolling interests |
|
(1,143 |
) |
|
|
— |
|
|
|
(6,497 |
) |
|
|
— |
|
Net loss attributable to |
$ |
(814,518 |
) |
|
$ |
(163,832 |
) |
|
$ |
(1,184,862 |
) |
|
$ |
(248,442 |
) |
Basic and diluted loss per share attributable to |
$ |
(1.29 |
) |
|
$ |
(1.20 |
) |
|
$ |
(3.02 |
) |
|
$ |
(1.82 |
) |
Basic and diluted weighted-average common shares outstanding |
|
629,485 |
|
|
|
136,968 |
|
|
|
392,243 |
|
|
|
136,193 |
|
Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited) |
|||||||
|
Twelve Months Ended |
||||||
|
|
2021 |
|
|
|
2020 |
|
Cash flows from operating activities: |
|
|
|
||||
Net loss |
$ |
(1,184,862 |
) |
|
$ |
(248,442 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
||||
Depreciation and amortization |
|
35,484 |
|
|
|
8,289 |
|
Share-based compensation |
|
68,423 |
|
|
|
5,452 |
|
Deferred income taxes |
|
(25,654 |
) |
|
|
— |
|
Unrealized gains on equity securities |
|
(80,231 |
) |
|
|
— |
|
Other, net |
|
20,254 |
|
|
|
2,667 |
|
Changes in assets and liabilities, net of acquired assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(32,941 |
) |
|
|
24,631 |
|
Other assets |
|
(143,463 |
) |
|
|
(44,061 |
) |
Medical cost payable |
|
475,461 |
|
|
|
78,591 |
|
Risk adjustment payable |
|
742,075 |
|
|
|
100,974 |
|
Accounts payable and other liabilities |
|
192,611 |
|
|
|
(3,962 |
) |
Unearned revenue |
|
14,902 |
|
|
|
18,623 |
|
Net cash provided by (used in) operating activities |
|
82,059 |
|
|
|
(57,238 |
) |
Cash flows from investing activities: |
|
|
|
||||
Purchases of investments |
|
(1,017,588 |
) |
|
|
(916,823 |
) |
Proceeds from sales, paydown, and maturities of investments |
|
926,901 |
|
|
|
463,887 |
|
Purchases of property and equipment |
|
(30,414 |
) |
|
|
(6,474 |
) |
Business acquisitions, net of cash acquired |
|
(431,791 |
) |
|
|
(230,332 |
) |
Net cash used in investing activities |
|
(552,892 |
) |
|
|
(689,742 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds from issuance of preferred stock |
|
— |
|
|
|
711,200 |
|
Proceeds from issuance of common stock |
|
11,390 |
|
|
|
1,241 |
|
Net proceeds from short-term borrowings |
|
155,000 |
|
|
|
— |
|
Payments for debt issuance costs |
|
(3,391 |
) |
|
|
— |
|
Proceeds from IPO |
|
887,328 |
|
|
|
— |
|
Payments for IPO offering costs |
|
(6,686 |
) |
|
|
— |
|
Net cash provided by financing activities |
|
1,043,641 |
|
|
|
712,441 |
|
Net increase (decrease) in cash and cash equivalents |
|
572,808 |
|
|
|
(34,539 |
) |
Cash and cash equivalents – beginning of year |
|
488,371 |
|
|
|
522,910 |
|
Cash and cash equivalents – end of year |
$ |
1,061,179 |
|
|
$ |
488,371 |
|
Segment Information (in thousands) (Unaudited) |
|||||||||||||||
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
(in thousands) |
|
|
|
||||||||||||
Statements of income (loss) and operating data: |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Commercial premium revenue |
$ |
581,699 |
|
|
$ |
181,518 |
|
|
$ |
2,512,624 |
|
|
$ |
692,433 |
|
Medicare Advantage premium revenue |
|
367,899 |
|
|
|
169,842 |
|
|
|
1,297,273 |
|
|
|
480,112 |
|
Investment income |
|
248 |
|
|
|
1,405 |
|
|
|
3,739 |
|
|
|
8,468 |
|
Total revenue |
|
949,846 |
|
|
|
352,765 |
|
|
|
3,813,636 |
|
|
|
1,181,013 |
|
Operating expenses |
|
|
|
|
|
|
|
— |
|
||||||
Medical costs |
|
1,178,701 |
|
|
|
372,186 |
|
|
|
3,766,897 |
|
|
|
1,047,300 |
|
Operating costs |
|
433,322 |
|
|
|
138,785 |
|
|
|
1,140,842 |
|
|
|
376,215 |
|
Depreciation and amortization |
|
5,544 |
|
|
|
2,263 |
|
|
|
17,068 |
|
|
|
6,394 |
|
Total operating expenses |
|
1,617,567 |
|
|
|
513,234 |
|
|
|
4,924,807 |
|
|
|
1,429,909 |
|
Operating loss |
$ |
(667,721 |
) |
|
$ |
(160,469 |
) |
|
$ |
(1,111,171 |
) |
|
$ |
(248,896 |
) |
|
|
|
|
|
|
|
|
||||||||
Medical Cost Ratio (MCR) |
|
124.1 |
% |
|
|
105.9 |
% |
|
|
98.9 |
% |
|
|
89.3 |
% |
NeueHealth |
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
($ in thousands) |
|
|
|
||||||||||||
Statements of income (loss) data: |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
||||||||
NeueHealth: |
|
|
|
|
|
|
|
||||||||
Revenue: |
|
|
|
|
|
|
|
||||||||
Premium revenue |
$ |
116,418 |
|
|
$ |
1,843 |
|
|
$ |
338,254 |
|
|
$ |
7,793 |
|
Service revenue |
|
19,881 |
|
|
|
7,834 |
|
|
|
74,690 |
|
|
|
29,354 |
|
Investment income |
|
(28,777 |
) |
|
|
— |
|
|
|
80,235 |
|
|
|
— |
|
Total revenue |
|
107,522 |
|
|
|
9,677 |
|
|
|
493,179 |
|
|
|
37,147 |
|
Operating expenses: |
|
|
|
|
|
— |
|
|
|
— |
|
||||
Medical costs |
|
221,142 |
|
|
|
— |
|
|
|
432,318 |
|
|
|
— |
|
Operating costs |
|
34,697 |
|
|
|
12,563 |
|
|
|
129,430 |
|
|
|
43,959 |
|
Depreciation and amortization |
|
3,959 |
|
|
|
476 |
|
|
|
18,416 |
|
|
|
1,895 |
|
Total operating expenses |
|
259,798 |
|
|
|
13,039 |
|
|
|
580,164 |
|
|
|
45,854 |
|
Operating loss |
$ |
(152,276 |
) |
|
$ |
(3,362 |
) |
|
$ |
(86,985 |
) |
|
$ |
(8,707 |
) |
|
|
|
|
|
|
|
|
||||||||
Medical Cost Ratio (MCR) |
|
190.0 |
% |
|
|
— |
% |
|
|
127.8 |
% |
|
|
— |
% |
Non-GAAP Financial Measures
We use the non-GAAP financial measure Adjusted EBITDA. We define Adjusted EBITDA as Net Loss excluding Interest Expense, Income Taxes, Depreciation and Amortization, adjusted for the impact of acquisition and financing-related transaction costs, share-based compensation and changes in the fair value of contingent consideration. This non-GAAP measure has been presented in this quarterly Earnings Release as a supplemental measure of financial performance that is not required by or presented in accordance with GAAP because we believe it assists management and investors in comparing our operating performance across reporting periods on a consistent basis by excluding and including items that we do not believe are indicative of our core operating performance. Management believes this measure is useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses Adjusted EBITDA to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish discretionary annual incentive compensation and to compare our performance against that of other peer companies using similar measures. Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone.
Adjusted EBITDA is not a recognized term under GAAP and should not be considered as an alternative to Net Income (Loss) as a measure of financial performance or any other performance measure derived in accordance with GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of free cash flow available for management’s discretionary use as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. The presentation of Adjusted EBITDA has limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentation of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company.
The following table provides a reconciliation of net loss to Adjusted EBITDA for the periods presented:
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
($ in thousands) |
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Net loss |
$ |
(813,375 |
) |
|
$ |
(163,832 |
) |
|
$ |
(1,178,365 |
) |
|
$ |
(248,442 |
) |
Interest expense |
|
1,674 |
|
|
|
— |
|
|
|
7,956 |
|
|
|
— |
|
Income tax (benefit) expense |
|
(8,296 |
) |
|
|
1 |
|
|
|
(26,521 |
) |
|
|
(9,161 |
) |
Depreciation and amortization |
|
9,503 |
|
|
|
2,739 |
|
|
|
35,484 |
|
|
|
8,289 |
|
Transaction costs (a) |
|
740 |
|
|
|
1,638 |
|
|
|
6,338 |
|
|
|
4,950 |
|
Share-based compensation expense (b) |
|
25,189 |
|
|
|
1,730 |
|
|
|
68,423 |
|
|
|
5,452 |
|
Change in fair value of contingent consideration (c) |
|
(5,584 |
) |
|
|
— |
|
|
|
(4,221 |
) |
|
|
— |
|
Contract termination costs (d) |
|
— |
|
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
(790,149 |
) |
|
$ |
(157,724 |
) |
|
$ |
(1,080,906 |
) |
|
$ |
(238,912 |
) |
(a) |
Transaction costs include accounting, tax, valuation, consulting, legal and investment banking fees directly relating to business combinations and certain costs associated with our initial public offering. These costs can vary from period to period and impact comparability, and we do not believe such transaction costs reflect the ongoing performance of our business. |
|
(b) |
Represents non-cash compensation expense related to stock option and restricted stock award grants, which can vary from period to period based on a number of factors, including the timing, quantity and grant date fair value of the awards. |
|
(c) |
Represents the non-cash change in fair value of contingent consideration from business combinations, which is remeasured at fair value each reporting period. There was no material activity for periods prior to the first quarter of 2021. |
|
(d) |
Represents amount paid for early termination of an existing vendor contract. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220302005279/en/
Investor Contact:
IR@brighthealthgroup.com
Media Contact:
Kris.Patrow@padillaco.com
Source:
FAQ
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