Alignment Healthcare, Inc.

Previous wording

We have grown Health Plan Membership, which we define as members enrolled in our health maintenance organization ("HMO") and preferred provider organization ("PPO") contracts (the "Alignment Health Plan"), from approximately 13,000 members at inception to 284,800 members as of March 31, 2026, representing a 30% compound annual growth rate. Our ultimate goal is to bring this differentiated, advocacy-driven healthcare experience to millions of senior consumers in the United States and to become the most trusted senior healthcare brand in the country.

Current wording

We have grown Health Plan Membership, which we define as members enrolled in our health maintenance organization ("HMO") and preferred provider organization ("PPO") contracts (the "Alignment Health Plan"), from approximately 13,000 members at inception to 294,100 members as of June 30, 2026, representing a 30% compound annual growth rate. Our ultimate goal is to bring this differentiated, advocacy-driven healthcare experience to millions of senior consumers in the United States and to become the most trusted senior healthcare brand in the country.

Previous wording

For the 2026 plan year, Alignment offers plans in 45 markets across California (22 markets), North Carolina (16 markets), Nevada (2 markets), Arizona (3 markets) and Texas (2 markets). There are approximately 8.4 million Medicare-eligible seniors in our current markets.

Current wording

For the 2026 plan year, Alignment offers plans in 45 markets across California (22 markets), North Carolina (16 markets), Nevada (2 markets), Arizona (3 markets) and Texas (2 markets). There are approximately 8.5 million Medicare-eligible seniors in our current markets.

Previous wording

•Capitalize on Our Existing Market Growth Opportunity: Our ability to attract and retain members to grow in our existing markets depends on our ability to offer a superior value proposition. We routinely take market share from large established players in highly competitive markets, a key source of our health plan membership growth in excess of the industry average. We believe that there are still significant opportunities for future growth even in some of our most mature markets where we have approximately 10-30% market share. As of March 31, 2026, we have approximately 284,800 Health Plan Members, which, according to CMS data, represent only 6% market share of Medicare Advantage enrollees in our markets.

Current wording

•Capitalize on Our Existing Market Growth Opportunity: Our ability to attract and retain members to grow in our existing markets depends on our ability to offer a superior value proposition. We routinely take market share from large established players in highly competitive markets, a key source of our health plan membership growth in excess of the industry average. We believe that there are still significant opportunities for future growth even in some of our most mature markets where we have approximately 10-30% market share. As of June 30, 2026, we have approximately 294,100 Health Plan Members, which, according to CMS data, represent only 6% market share of Medicare Advantage enrollees in our markets.

Previous wording

(1)Amortization expense for the three months ended March 31, 2025 includes $0.6 million in impairment expense related to the remeasurement of goodwill associated with one of our subsidiaries.

Current wording

(1)Amortization expense for the six months ended June 30, 2025 includes $0.6 million in impairment expense related to the remeasurement of goodwill associated with one of our subsidiaries. There was no impairment expense for the three months ended June 30, 2025.

Previous wording

Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) before interest expense, income taxes, depreciation and amortization expense, certain litigation costs, and equity-based compensation expense. Adjusted EBITDA is a key measure used by our management and our Board to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operating plans. In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA provides useful measures for period-to-period comparisons of our business, as we do not consider the excluded items to be part of our ongoing results of operations. Given our intent to continue to invest in our platform and the scalability of our business in the short to medium-term, we believe Adjusted EBITDA over the long term will be an important indicator of value creation.

Current wording

Adjusted EBITDA is a non-GAAP financial measure that we define as net income (loss) before interest expense, income taxes, depreciation and amortization expense, certain litigation costs, gains or losses on sale of property and equipment, and equity-based compensation expense. Adjusted EBITDA is a key measure used by our management and our Board to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operating plans. In particular, we believe that the exclusion of the amounts eliminated in calculating Adjusted EBITDA provides useful measures for period-to-period comparisons of our business, as we do not consider the excluded items to be part of our ongoing results of operations. Given our intent to continue to invest in our platform and the scalability of our business in the short to medium-term, we believe Adjusted EBITDA over the long term will be an important indicator of value creation.

Previous wording

(1)Amortization expense for the three months ended March 31, 2025 includes $0.6 million in impairment expense related to the remeasurement of goodwill associated with one of our subsidiaries.

Current wording

(1)Amortization expense for the six months ended June 30, 2025 includes $0.6 million in impairment expense related to the remeasurement of goodwill associated with one of our subsidiaries. There was no impairment expense for the three months ended June 30, 2025.

Previous wording

Earned Premiums. Earned premium revenues were $1,226.6 million and $918.0 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $308.5 million or 33.6%. The increase was primarily driven by growth in our Health Plan membership, which increased 30.9% between March 31, 2025 and March 31, 2026. The increase in revenue per member per month is attributable to 2026 increases in the CMS benchmark rates and Part D direct subsidy.

Current wording

32.7%. The increase was primarily driven by growth in our Health Plan membership, which increased 31.5% between June 30, 2025 and June 30, 2026.

Previous wording

Other Revenue. Other revenue decreased $0.3 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, a decrease of 2.9%. The decrease is mainly attributable to the Company no longer participating in the ACO Reach program and a decrease in revenue from services provided to third-party providers. This decrease was offset by an increase in our average interest earning cash balances and current investments. Cash and cash equivalents, and other current investments were $726.3 million as of March 31, 2026 compared to $479.5 million as of March 31, 2025.

Current wording

Other Revenue. Other revenue decreased $0.1 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, a decrease of 0.8%. Other revenue decreased $0.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, a decrease of 1.9%. The decrease is mainly attributable to the Company no longer participating in the ACO Reach program and a decrease in revenue from services provided to third-party providers. This decrease was offset by an increase in our average interest earning cash balances and current investments. Cash and cash equivalents, and other current investments were $701.7 million as of June 30, 2026 compared to $503.7 million as of June 30, 2025.

Previous wording

Medical Expenses. Medical expenses were $1,090.7 million and $820.9 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $269.8 million, or 32.9%. The increase was driven primarily by the growth in Alignment’s Health Plan membership, which increased 30.9% between March 31, 2025 and March 31, 2026. The increase was also due to higher benefits for members in certain plans and an increase in unit costs.

Current wording

Medical Expenses Medical expenses were $1,154.7 million and $881.7 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $272.9 million, or 31.0%. Medical expenses were $2,245.4 million and $1,702.6 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $542.8 million, or 31.9%. The increase was driven primarily by the growth in Alignment’s Health Plan membership, which increased 31.5% between June 30, 2025 and June 30, 2026 The increase was also due to higher benefits for members in certain plans and an increase in unit costs.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $121.1 million and $103.8 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $17.3 million, or 16.7%. The increase was primarily due to an increase in ongoing investments and expenditures in operations, technology, network development, and sales and marketing to drive the growth of Alignment's Health Plan membership. Selling, general, and administrative expenses as a percentage of revenue decreased from 11% to 10% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due to economies of scale gained from Alignment's membership growth and a reduction in equity-based compensation.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $131.0 million and $103.8 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $27.2 million, or 26.2%. Selling, general and administrative expenses were $252.1 million and $207.6 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $44.5 million, or 21.4%. The increase was primarily due to an increase in ongoing investments and expenditures in operations, technology, network development, and sales and marketing to drive the growth of Alignment's Health Plan membership. Selling, general, and administrative expenses as a percentage of revenue decreased from 10.2% to 9.8% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, and from 10.7% to 9.8% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease as a percentage of revenues is mainly attributable to economies of scale gained from Alignment's membership growth.

Previous wording

Depreciation and Amortization. Depreciation and amortization expense was $7.8 million and $7.6 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $0.2 million, or 3.2%. The increase was primarily due to the amount and timing of our capital expenditures and the associated depreciation relative to 2025. The increase was offset by a decrease in amortization expense. For the three months ended March 31, 2025, we recorded impairment expense of $0.6 million related to the remeasurement of goodwill associated with one of our subsidiaries. The goodwill impairment was recorded to amortization expense.

Current wording

Depreciation and Amortization. Depreciation and amortization expense was $7.9 million and $7.0 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $0.9 million, or 12.2%. Depreciation and amortization expense was $15.7 million and $14.6 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $1.1 million, or 7.5%. The increase was primarily due to the amount and timing of our capital expenditures and the associated depreciation relative to 2025. The six month increase was offset by a decrease in amortization expense. For the six months ended June 30, 2025, we recorded impairment expense of $0.6 million related to the remeasurement of goodwill associated with one of our subsidiaries. The goodwill impairment was recorded to amortization expense.

Previous wording

Interest expense. Interest expense was $4.1 million and $4.0 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $0.1 million or 2.5%. The increase in interest expense was mainly attributable to an increase in debt issuance cost amortization related to the Revolving Credit Facility that was entered into in February 2026.

Current wording

Interest expense. Interest expense was $4.3 million and $4.0 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $0.3 million or 7.5%. Interest expense was $8.3 million and $7.9 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $0.4 million or 5.1%. The increase in interest expense was mainly attributable to an increase in debt issuance cost amortization related to the Revolving Credit Facility that was entered into in February 2026.

Previous wording

Other income, net. Other income was $0.0 million for the three months ended March 31, 2026 and 2025.

Current wording

Other income, net. Other income was $0.0 million and $0.1 million for the three months ended June 30, 2026 and 2025, respectively. Other income was $0.0 million and $0.1 million for the six months ended June 30, 2026 and 2025, respectively. The decrease was mainly attributable to gains on the sale of property and equipment during the three and six months ended June 30, 2025 that did not recur in 2026.

Previous wording

To date, we have financed our operations principally through our IPO, private placements of our equity securities, revenues, and convertible notes (described below). As of March 31, 2026, we had $726.3 million in cash, cash equivalents and short-term investments.

Current wording

To date, we have financed our operations principally through our IPO, private placements of our equity securities, revenues, and convertible notes (described below). As of June 30, 2026, we had $701.7 million in cash, cash equivalents and short-term investments.

Previous wording

We operate as a holding company in a highly regulated industry. Alignment Healthcare, Inc., the parent company, is dependent upon dividends and administrative expense reimbursements from our subsidiaries, most of which are subject to regulatory restrictions. We maintain significant levels of aggregate excess statutory capital and surplus in our state-regulated operating subsidiaries. As of March 31, 2026, the operating parent company (an indirect wholly owned subsidiary of the parent company) had $135.8 million in cash, cash equivalents and short-term investments.

Current wording

We operate as a holding company in a highly regulated industry. Alignment Healthcare, Inc., the parent company, is dependent upon dividends and administrative expense reimbursements from our subsidiaries, most of which are subject to regulatory restrictions. We maintain significant levels of aggregate excess statutory capital and surplus in our state-regulated operating subsidiaries. As of June 30, 2026, the operating parent company (an indirect wholly owned subsidiary of the parent company) had $135.4 million in cash, cash equivalents and short-term investments.

Previous wording

We believe that our liquid assets will be sufficient to fund our operating and organic capital needs for at least the next 12 months. Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties. Our actual results could vary because of, and our future capital requirements will depend on, many factors, including our growth rate, the timing and extent of spending to expand our presence in existing markets, expand into new markets, increase our sales and marketing activities and develop our technology. Additionally, in the future we may enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights, which may also substantially increase our capital needs.

Current wording

We believe that our cash flows from operations and liquid assets will be sufficient to fund our operating and organic capital needs for at least the next 12 months. Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties. Our actual results could vary because of, and our future capital requirements will depend on, many factors, including our growth rate, the timing and extent of spending to expand our presence in existing markets, expand into new markets, increase our sales and marketing activities and develop our technology. Additionally, in the future we may enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights, which may also substantially increase our capital needs.

Previous wording

The Notes have an initial conversion rate of approximately 62.4 shares of Company common stock per $1 principal amount of the Notes. The conversion rate will be subject to adjustment in certain events, including adjustment in the event of certain significant corporate transactions. This represents an initial conversion price of approximately $16.04 per share. The initial conversion price of the Notes represents a premium of approximately 25% to the closing price of the Company's common stock on November 14, 2024. The Company has used the proceeds from the sale of the Notes to repay in full the

Current wording

The Notes have an initial conversion rate of approximately 62.4 shares of Company common stock per $1 principal amount of the Notes. The conversion rate will be subject to adjustment in certain events, including adjustment in the event of certain significant corporate transactions. This represents an initial conversion price of approximately $16.04 per share. The initial conversion price of the Notes represents a premium of approximately 25% to the closing price of the Company's common stock on November 14, 2024. The Company has used the proceeds from the sale of the Notes to repay in full the $215.0 million aggregate principal amount, accrued interest and fees related to the Company's previous term loans with a separate financing company, as well as certain fees and expenses incurred in connection with the transaction.

Previous wording

Borrowings under the Credit Facility may be used for permitted acquisitions, working capital, the payment of fees, costs and expenses incurred in connection with the Credit Agreement and other general corporate purposes. The Borrower did not borrow any amounts under the Credit Facility as of the Effective Date.

Current wording

Borrowings under the Credit Facility may be used for permitted acquisitions, working capital, the payment of fees, costs and expenses incurred in connection with the Credit Agreement and other general corporate purposes. The Borrower did not borrow any amounts under the Credit Facility as of June 30, 2026.

Previous wording

For the three months ended March 31, 2026, net cash provided by operating activities was $128.7 million, an increase of $112.1 million compared to net cash provided by operating activities of $16.6 million for the three months ended March 31, 2025. The increase is mainly attributable to an increase in membership and net income, an increase in medical expense payables related to the timing of our payments, and the timing of accounts receivable settlements. This increase was partially offset by an increase in accrued compensation and prepaid expenses and other current assets.

Current wording

For the six months ended June 30, 2026, net cash provided by operating activities was $111.4 million, an increase of $65.6 million compared to net cash provided by operating activities of $45.7 million for the six months ended June 30, 2025. The increase is mainly attributable to an increase in membership and net income and the timing of accounts receivable settlements. This increase was partially offset by the timing of our medical expense payments and an increase in accrued compensation and prepaid expenses and other current assets.

Previous wording

For the three months ended March 31, 2026, net cash provided by investing activities was $0.6 million, an increase of $4.1 million compared to net cash used in investing activities of $3.5 million for the three months ended March 31, 2025. The increase primarily relates to a decrease in investment purchases during the three months ended March 31, 2026. This increase was partially offset by a decrease in investment maturities.

Current wording

For the six months ended June 30, 2026, net cash provided by investing activities was $3.0 million, an increase of $13.1 million compared to net cash used in investing activities of $10.1 million for the six months ended June 30, 2025. The increase primarily relates to a decrease in investment purchases during the six months ended June 30, 2026. This increase was partially offset by a decrease in investment maturities.

Previous wording

For the three months ended March 31, 2026, net cash provided by financing activities was $0.5 million, an increase of $0.3 million, compared to net cash provided by financing activities of $0.2 million for the three months ended March 31, 2025. The increase is primarily attributable to an increase in proceeds from stock option exercises for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was offset by an increase in debt issuance costs related to the revolving credit facility.

Current wording

For the six months ended June 30, 2026, net cash provided by financing activities was $3.3 million, an increase of $1.5 million, compared to net cash provided by financing activities of $1.8 million for the six months ended June 30, 2025. The increase is primarily attributable to an increase in proceeds from stock option exercises for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This increase was offset by an increase in debt issuance costs related to the revolving credit facility.

Previous wording

There have been no significant changes in our critical accounting estimate policies or methodologies to our condensed consolidated financial statements. For a description of our policies regarding our critical accounting policies, see

Current wording

There have been no significant changes in our critical accounting estimate policies or methodologies to our condensed consolidated financial statements. For a description of our policies regarding our critical accounting policies, see"Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates" in the Annual Report.