On November 9, 2023, CareMax Inc (CMAX, Financial), a leading technology-enabled value-based care delivery system, announced its financial results for the third quarter ended September 30, 2023. The company reported a significant increase in Medicare Advantage membership and total revenue, while also facing a substantial net loss primarily due to a non-cash goodwill impairment charge.
Financial Performance and Challenges
CareMax Inc (CMAX, Financial) experienced a robust growth in its Medicare Advantage membership, which surged by 171% compared to the same period last year, reaching 107,000 members. The company's total revenue also saw a healthy increase, climbing 28% year-over-year to $201.8 million. However, the company reported a net loss of $103.1 million for the quarter, which included an $80.0 million non-cash goodwill impairment. This compares to a net loss of $22.1 million for the third quarter of 2022.
The company's Adjusted EBITDA for the quarter was $2.1 million, a decrease from the $4.4 million reported in the third quarter of the previous year. The Medical Expense Ratio also increased to 88.0%, up from 75.2% in Q3 2022. De novo pre-opening costs and post-opening losses for the quarter amounted to $5.8 million.
Financial Outlook for Full Year 2023
CareMax is reaffirming its full year 2023 revenue guidance, anticipating total revenue to be between $750 million to $800 million, marking an increase of 19% to 27% year-over-year. The company expects de novo pre-opening costs and post-opening losses to be approximately $25 million for the year.
However, the company has updated its guidance for year-end Medicare Advantage membership, now expecting approximately 110,000 members, which represents an 18% increase year-over-year. Adjusted EBITDA guidance has also been updated to a range of $15 million to $25 million, compared to $19.1 million for the year ended December 31, 2022.
Balance Sheet and Cash Flow Highlights
As of September 30, 2023, CareMax reported cash and cash equivalents of $32.3 million, a decrease from $41.6 million at the end of 2022. The company's total assets stood at $1.06 billion, while total liabilities were $533.5 million. The net loss for the nine months ended September 30, 2023, was $217.6 million, and the net cash used in operating activities was $62.4 million.
CareMax's CEO, Carlos de Solo, commented on the company's performance, stating,
“With significant progress made in many of those initiatives, we have increased confidence in our ability to effectively manage our members on their glidepath to risk and operate toward more consistent financial outcomes.”He also expressed optimism about the company's positioning to navigate the evolving utilization environment and execute on the embedded value in their platform.
For a detailed discussion of the risk factors that could affect CareMax's actual results, please refer to the risk factors identified in the company's reports filed with the SEC.
Investors and interested parties can access the conference call details and related presentation materials on the “Events & Presentations” section of CareMax’s investor relations website at ir.caremax.com.
For more information about CareMax and its financial results, visit www.caremax.com.
Explore the complete 8-K earnings release (here) from CareMax Inc for further details.
