How CLOV (Clover Health Investments) Makes Money in 2026: A Deep-Dive With Income Statement

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Understanding how a health insurance provider like Clover Health (CLOV) makes money is essential for investors and anyone interested in the business of Medicare Advantage. In this post, we break down Clover Health's quarterly income statement (Q3 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick Clover Health Overview

Clover Health operates as a technology-driven Medicare Advantage insurer, leveraging its Clover Assistant platform to improve clinical decision-making for physicians and manage patient care. Revenue comes primarily from insurance premiums collected from Medicare Advantage plans, with a focus on seniors in the U.S. The company emphasizes data analytics and AI to reduce medical costs and enhance member outcomes, operating in a highly regulated healthcare segment.

Revenue Breakdown

• Total Revenue (Q3 2025): $496.7M (+50.1% YoY)
  • No detailed segment breakdown available in the provided data; revenue is driven by Medicare Advantage premiums.
  • Growth is powered by expansion in membership, improved retention, and higher per-member premiums amid rising healthcare demand.

Gross Profit and Margins

• Gross Profit: $73.2M (14.7% gross margin)
  • Cost of Revenue: $423.5M (+69.5% YoY)
  • Clover Health maintains moderate margins due to high medical claims costs in the insurance model, offset by tech efficiencies from Clover Assistant.
• Most costs come from medical claims and provider payments (captured in cost of revenue), with other expenses including administrative overhead.

Operating Income and Expenses

• Operating Income: Not specified (implied negative based on flows)
• Operating Expenses: $97.6M (+8.4% YoY)
  • R&D: Not specified
  • SG&A: $97.1M (+7.7% YoY, 19.6% of revenue) — covers sales, marketing, general administration, and technology platform development to support provider network growth.
  • Clover Health continues to prioritize innovation while maintaining efficiency through AI-driven cost controls in a competitive Medicare market.

Net Income

• Pre-Tax Income: Not specified
• Income Tax: Not specified (0% effective tax rate implied)
• Net Income: $24.4M (+166.3% YoY, 4.9% net margin)
• Clover Health converts a moderate portion of sales into profit due to operational leverage from revenue growth outpacing cost increases and non-operating adjustments.

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What Drives Clover Health's Money Machine?

• Medicare Advantage Premiums: 100% of revenue; collected from government-backed plans for senior healthcare coverage, scaled by membership growth.
• Membership Growth: 50.1% YoY revenue surge reflects expanding enrollees benefiting from Clover Assistant's AI tools for better care management.
• Technology Platform: Investments in Clover Assistant AI for predictive analytics and care optimization, reducing unnecessary procedures.
• Future growth areas: Geographic expansion and new tech features, though high medical loss ratios keep gross margins challenged.

Visualizing Clover Health's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant medical costs, 4.9% of revenue drops to the bottom line.

Key Takeaways

• Clover Health's money comes overwhelmingly from Medicare Advantage insurance premiums
• High gross and net margins illustrate the power of Clover Health's AI-enhanced insurance model
• Heavy investment in technology and administration, balanced by efficiency in operating costs
• Ongoing growth is driven by membership expansion and premium increases

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FAQ About Clover Health's Income Statement

1. What is the main source of Clover Health's revenue in 2025?

Clover Health generates over 100% of its revenue from Medicare Advantage premiums. No significant additional revenue sources are detailed in the data.

2. How profitable is Clover Health in Q3 2025?

Clover Health reported net income of $24.4M in Q3 2025, with a net margin of approximately 4.9%, reflecting moderate profitability driven by strong revenue growth and cost controls.

3. What are the largest expense categories for Clover Health?

The biggest expenses on Clover Health's income statement are operating expenses, particularly Sales, General & Administrative (SG&A) costs. SG&A investment reached $97.1M in Q3 2025, as Clover Health prioritizes technology development and provider network expansion.

4. Why does Clover Health operate with thin margins?

The insurance business, despite generating $496.7M in revenue, posted moderate gross margins of 14.7% in Q3 2025. This is because Clover Health aggressively invests in medical care management and AI tools, believing these will drive long-term growth—even if margins are pressured today.

5. How does Clover Health's effective tax rate compare to previous years?

Clover Health's effective tax rate in Q3 2025 was 0% (implied). This low rate is primarily due to net operating loss carryforwards and non-operating income adjustments.