Alignment Healthcare, Inc 10-Q for FY2026 Q3
Alignment Healthcare, Inc. (ALHC)
10-Q
2026-10-29
For: 2026-09-30
View Original
Added on
October 29, 2026
About this 10-Q
Alignment Healthcare, Inc filed this 10-Q on October 29, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
For the nine months ended September 30, 2026, Alignment Healthcare, Inc. grew earned premiums 34.2% to $3,901.4 million and medical expenses 34.7% to $3,463.0 million, with health plan membership up 31.2% to 301,200. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.36B
- up 36.7% from $993.7M a year earlier
- Net loss
- $8.05M
- compared with net income of $3.73M a year earlier
- Diluted EPS
- -$0.04
- compared with $0.02 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_______________________________________
FORM 10-Q
_______________________________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 001-40295
_______________________________________
(Exact Name of Registrant as Specified in its Charter)
_______________________________________
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
Registrant’s telephone number, including area code: (844 ) 310-2247
_______________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| x | Accelerated filer | o | ||||||||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of October 26, 2026, the registrant had 209,268,394 shares of common stock, $0.001 par value per share, outstanding.
Table of Contents
| Page | ||||||||
Condensed Consolidated Statements of Stockholders' Equity | ||||||||
FORWARD-LOOKING STATEMENTS
Throughout this quarterly report on Form 10-Q (this “Quarterly Report”), we make “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Quarterly Report are forward-looking statements. Forward-looking statements give our current expectations relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms of similar meaning. The forward-looking statements contained in this Quarterly Report are generally located in the material set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” but may be found in other locations as well. These statements are based upon management’s current expectations, assumptions and estimates and are not guarantees of timing, future results or performance. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:
•our history of net losses and our ability to achieve or maintain profitability in an environment of increasing expenses;
•the viability of our growth strategy and our ability to realize expected results;
•our ability to attract new members and to successfully enter into new markets;
•the quality and pricing of our products and services;
•our ability to achieve or maintain a high rating for our plans on the Five Star Quality Rating System;
•our ability to develop and maintain satisfactory relationships with care providers that service our members;
•our ability to manage our growth effectively, execute our business plan, maintain high levels of service and member satisfaction or adequately address competitive challenges;
•changes in medical costs and healthcare utilization, and our ability to accurately estimate, price for and manage such costs and utilization;
•our ability to compete in the healthcare industry;
•the impact on our business of cybersecurity breaches, loss of data or other disruptions causing the compromise of sensitive information or preventing us from accessing critical information;
•the impact on our business of disruptions in our disaster recovery systems or management continuity planning;
•our dependence on reimbursements by the Centers for Medicare and Medicaid Services ("CMS") and premium payments by individuals;
•other risks associated with being a government contractor;
•the impact on our business of the healthcare services industry becoming more cyclical;
•our ability to manage acquisitions, divestitures and other significant transactions successfully;
•our ability to maintain, enhance and protect our reputation and brand recognition;
•our ability to effectively invest in, implement improvements to and properly maintain the uninterrupted operation and data integrity of our information technology and other business systems;
•our ability to obtain, maintain, protect and enforce intellectual property protection for our technology;
•the impact of any restrictions on our use of or ability to license data or our failure to license data and integrate third-party technologies;
•the cost and other potential adverse impacts of legal proceedings and litigation, including intellectual property and privacy disputes;
•our dependence on our senior management team and other key employees;
•the concentration of our health plans in a limited number of U.S. states;
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•our ability to generate sufficient cash flow to service all of our indebtedness and the potential impact of certain affirmative and negative covenants in our credit agreement on our business;
•the impact of shortages of qualified personnel and related increases in our labor costs;
•the risk that our records may contain inaccurate or unsupportable information regarding risk adjustment scores of members;
•our ability to accurately estimate incurred but not reported medical expenses;
•the impact of negative publicity regarding the managed healthcare industry;
•the impact of weather and other factors beyond our control on our clinics, the centers out of which our external providers operate, and the facilities that host our AVA platform (as defined below);
•the impact on our business of renegotiation, non-renewal or termination of risk agreements with hospitals, physicians, nurses, pharmacists and medical support staff;
•risks associated with estimating the amount of liabilities that we recognize under our risk agreements with providers;
•our ability to respond to general economic conditions, including but not limited to, increased inflation and higher interest rates;
•risks associated with an economic downturn, including pressure on governmental budgets and reduced spending for health and human service programs;
•our ability to develop and maintain proper and effective internal control over financial reporting;
•the impact of state and federal efforts to reduce Medicare spending;
•our ability to comply with applicable federal, state and local rules and regulations, including those relating to data privacy and security; and
•other factors disclosed in the section entitled “Risk Factors” and elsewhere in this Quarterly Report.
We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report.
All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this Quarterly Report in the context of these risks and uncertainties.
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Quarterly Report are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
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PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Alignment Healthcare, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except par value and share amounts)
(Unaudited)
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable (less allowance for credit losses of $ | |||||||||||
| Investments - current | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Right of use asset, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current Liabilities: | |||||||||||
| Medical expenses payable | $ | $ | |||||||||
| Accounts payable and accrued expenses | |||||||||||
| Accrued compensation | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, net of debt issuance costs | |||||||||||
| Long-term portion of lease liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and Contingencies (Note 12) | |||||||||||
| Stockholders' Equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders' equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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Alignment Healthcare, Inc.
Condensed Consolidated Statements of Operations
(amounts in thousands, except share and per share amounts)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Earned premiums | $ | $ | $ | $ | |||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Medical expenses | |||||||||||||||||||||||
| Selling, general, and administrative expenses | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Income (loss) from operations | ( | ||||||||||||||||||||||
| Other expenses: | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Other income, net | ( | ( | |||||||||||||||||||||
| Total other expense | |||||||||||||||||||||||
| Income (loss) before income taxes | ( | ||||||||||||||||||||||
| Provision (benefit) for income taxes | ( | ||||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | $ | ||||||||||||||||||
| Less: Net loss attributable to noncontrolling interest | ( | ||||||||||||||||||||||
| Net income (loss) attributable to Alignment Healthcare, Inc. | $ | ( | $ | $ | $ | ||||||||||||||||||
| Net income (loss) per share attributable to Alignment Healthcare, Inc.: | |||||||||||||||||||||||
| Basic | ( | ||||||||||||||||||||||
| Diluted | ( | ||||||||||||||||||||||
| Weighted-average common shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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Alignment Healthcare, Inc.
Condensed Consolidated Statements of Stockholders' Equity
(amounts in thousands, except par value and share amounts)
(Unaudited)
| Common Stock | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interest | Total | ||||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | ||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling interest | Total | ||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | ||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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Alignment Healthcare, Inc.
Condensed Consolidated Statements of Stockholders' Equity
(amounts in thousands, except par value and share amounts)
(Unaudited)
| Common Stock | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling interest | Total | ||||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | ||||||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||
| Shares | Amount | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling interest | Total | ||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | ( | |||||||||||||||||||||||||||||||
| Issuance of common stock upon vesting of restricted stock units | — | — | — | — | — | ||||||||||||||||||||||||||||||
| Forfeitures | ( | — | — | — | — | — | |||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
| Stock options exercised | — | — | — | ||||||||||||||||||||||||||||||||
| Sale of consolidated subsidiary | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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Alignment Healthcare, Inc.
Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating Activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Provision for credit loss | |||||||||||
| Gain on sale of property and equipment | ( | ( | |||||||||
| Depreciation and amortization | |||||||||||
| Amortization-investment discount | ( | ( | |||||||||
| Amortization-debt issuance costs | |||||||||||
| Equity-based compensation | |||||||||||
| Non-cash lease expense | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ||||||||||
| Prepaid expenses and other current assets | ( | ( | |||||||||
| Other assets | ( | ( | |||||||||
| Medical expenses payable | |||||||||||
| Accounts payable and accrued expenses | |||||||||||
| Accrued compensation | ( | ||||||||||
| Lease liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Investing Activities: | |||||||||||
| Purchase of investments | ( | ( | |||||||||
| Sale of property and equipment | |||||||||||
| Maturities of investments | |||||||||||
| Sale of business | |||||||||||
| Acquisition of property and equipment | ( | ( | |||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Financing Activities: | |||||||||||
| Debt issuance costs | ( | ( | |||||||||
| Proceeds from stock option exercises | |||||||||||
| Net cash provided by financing activities | |||||||||||
| Net increase in cash | |||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Supplemental non-cash investing and financing activities: | |||||||||||
| Acquisition of property in accounts payable | $ | $ | |||||||||
7
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the total above:
| September 30, 2026 | September 30, 2025 | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash in other assets | |||||||||||
| Total | $ | $ | |||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
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Alignment Healthcare, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(amounts in thousands, except share amounts)
1. Organization
Alignment Healthcare, Inc. (collectively, “we” or “us” or “our” or the “Company”), is a next generation, consumer-centric and clinically focused platform designed to improve the healthcare experience for seniors enrolled in Medicare who choose a private Medicare Advantage plan. Our goal is to provide seniors with easier access to care, better coordination among providers, fewer gaps in care and avoidable hospital visits, and support that meets them where they are—at home, online, or in their community. We deliver this experience through our wide variety of Medicare Advantage plans, which offer varied benefits tailored to the diverse needs, preferences, and lifestyles of seniors. The Company’s operations primarily consist of Medicare Advantage Plans in the states of California, North Carolina, Nevada, Arizona and Texas.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The balance sheet as of December 31, 2025, included herein, was derived from audited financial statements, but does not include all disclosures required by GAAP. In accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"), the Company has omitted certain footnote disclosures that would substantially duplicate the disclosures contained in its annual audited consolidated financial statements. Therefore, these condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year-ended December 31, 2025 as filed with the SEC. Management believes that the accompanying condensed consolidated financial statements include all normal and recurring adjustments necessary to present the interim financial statements fairly. Furthermore, the condensed consolidated financial statements include the accounts of the Company, our subsidiaries, and three immaterial variable interest entities in which we are the primary beneficiary. All intercompany transactions have been eliminated in consolidation.
We have no components of other comprehensive income, and accordingly, comprehensive income is the same as the net income for all periods presented.
Use of Estimates
The preparation of the condensed consolidated financial statements requires management to make estimates and judgments that affect the amounts reported in the condensed consolidated financial statements. Our significant estimates include, but are not limited to, the determination of medical expenses payable; the impact of risk adjustment provisions related to our Medicare contracts; collectability of receivables; valuation of related impairment recognition of long-lived assets, including goodwill and intangible assets; equity-based compensation expense; and contingent liabilities. Estimates and judgments are based upon historical information and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ materially from those estimates and the impact of any change in estimates is included in earnings in the period in which the estimate is adjusted.
Segments
We have determined that our chief executive officer is the chief operating decision maker (“CODM”) who regularly reviews financial operating results on a consolidated basis for purposes of allocating resources and evaluating financial performance. We operate and manage the business as one reportable segment and one operating segment, which is to provide healthcare services to our seniors. Factors used in determining the reportable segment include the nature of operating activities, our organizational and reporting structure, and the type of information reviewed by the CODM to allocate resources and evaluate financial performance. All of our assets are located in the United States.
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In addition to net income, the CODM is also provided information on certain significant segment expenses which are presented below:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues: | $ | $ | $ | $ | |||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Medical expenses (less depreciation and equity-based compensation) | |||||||||||||||||||||||
| Selling, general, and administrative expenses (less equity-based compensation) | |||||||||||||||||||||||
Other segment expenses (1) | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | $ | ||||||||||||||||||
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Our current assets and current liabilities approximate fair value because of the short-term nature of these financial instruments. Financial instruments measured at fair value on a recurring basis were based upon a three-tier hierarchy as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities
Level 2 - Other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability
Level 3 - Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date
Revenue and Accounts Receivable
Earned premium revenue consisted of premium revenue and capitation revenue for the three and nine months ended September 30, 2026 and 2025 were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Premium | $ | $ | $ | $ | |||||||||||||||||||
| Capitation | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
Premium revenue is derived monthly from the federal government based on our contracts with the Centers for Medicare and Medicaid Services (“CMS”). In accordance with these arrangements, we assume the responsibility for the outcomes and the economic risk of funding our members’ health care, supplemental benefits and related administration costs. We recognize premium revenue in the month that members are entitled to receive health care services, and premiums collected in advance are deferred. The monthly reimbursement includes a fixed payment per member per month (“PMPM”), which is adjusted based on certain risk factors derived from medical diagnoses and conditions of our members. The adjustments are
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estimated by projecting the ultimate annual premium and are recognized ratably during the year, with adjustments each period to reflect changes in the estimated ultimate premium. Premiums are also recorded net of estimated uncollectible amounts and retroactive membership adjustments.
In 2025, capitation revenue consisted primarily of capitated fees for medical care services provided by us under arrangements with third-party payors.
Under those arrangements with third-party payors, we received a PMPM payment for a defined member population, and we were responsible for providing health care services to the member population over the contract period. We were solely responsible for the cost of health care services related to the member population and in some cases, we were financially responsible for the supplemental benefits provided by us to the members. We acted as a principal in arranging for and controlling the services provided by our provider network and we were at risk for arranging and providing health care services.
As of January 1, 2026, we no longer have these capitation arrangements with third-party payors.
The premium and capitation payments we receive monthly from CMS for our members are determined from our annual bid or similarly from third-party payors under our capitation arrangement. These payments represent revenues for providing health care coverage, including Medicare Part D benefits. Under the Medicare Part D program, our members and the members of the third-party payors receive standard drug benefits. We may also provide enhanced benefits at our own expense. We recognize premium or capitation revenue for providing this insurance coverage in the month that members are entitled to receive health care services and any premium or capitation collected in advance is deferred. Our CMS payment related to Medicare Part D is subject to risk sharing through the Medicare Part D risk corridor provisions.
Interest income earned on our cash deposits and short-term investments is included within other revenue on the condensed consolidated statements of operations. Interest income for the three and nine months ended September 30, 2026 was $8,911 and $25,010 , respectively. Interest income for the three and nine months ended September 30, 2025 was $8,177 and $21,407 , respectively.
Revenue Adjustments
Payments by CMS to health plans are determined via a competitive bidding process with CMS and are based upon the cost of care in a local market and the average utilization of services by the member enrolled. These payments are subject to periodic adjustments under CMS’ “risk adjustment model,” which compensates health plans based on the health severity and certain demographic factors of each individual member. Members diagnosed with certain conditions are paid at a higher monthly payment than members who are healthier. Under this risk adjustment model, CMS calculates the risk adjustment payment using diagnosis data from hospital inpatient, hospital outpatient, and physician treatment settings. The Company and health care providers collect, capture, and submit the necessary and available diagnosis data to CMS within prescribed deadlines. Premium revenues are subject to adjustments under the risk adjustment model.
Throughout the year, we estimate risk adjustment payments based upon the diagnosis data submitted and expected to be submitted to CMS. Those estimated risk adjustment payments are recorded as an adjustment to premium and capitation revenue. Our risk adjustment data is also subject to review by the government, including audit by regulators.
Our recognized premium revenue for our Medicare Advantage Plans are each subject to a minimum annual medical loss ratio (“MLR”) of 85 %. The MLR represents medical costs as a percentage of premium revenue. The Code of Federal Regulations defines what constitutes medical costs and premium revenue, including certain additional expenses related to
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improving the quality of care provided, and the exclusion of certain taxes and fees, in each case as permitted or required by CMS and applicable regulatory requirements. If the minimum MLR is not met, we are required to remit a portion of the premiums back to the federal government. The amount remitted, if any, is recognized as an adjustment to premium revenues in the condensed consolidated statements of operations. The amounts payable under this provision were immaterial at September 30, 2026 and December 31, 2025.
Medicare Part D payments are also subject to a federal risk corridor program, which limits a health plan’s overall losses or profit if actual spending for basic Medicare Part D benefits is much higher or lower than what was anticipated. Risk corridor adjustments are recorded within premium revenue. The risk corridor provisions compare costs targeted in our bids to actual prescription drug costs, limited to actual costs that would have been incurred under the standard coverage as defined by CMS. Variances exceeding certain thresholds may result in CMS making additional payments to us or require us to refund a portion of the premiums we received. We estimate and recognize an adjustment to premium revenue related to these provisions based upon pharmacy claims experience. We record a receivable or payable at the contract level and classify the amount as current or long-term in our condensed consolidated balance sheets based on the timing of expected settlement.
Receivables, including risk adjusted premium due from the government, pharmacy rebates, and other receivables, are shown net of allowances for credit losses and retroactive membership adjustments.
Property and Equipment—Net
Depreciation expense is computed using the straight-line method generally based on the following estimated useful lives:
| Description | Estimated Service Lives (years) | ||||
| Computer and equipment | |||||
| Office equipment and furniture | |||||
| Software | |||||
| Leasehold improvements | |||||
Depreciation expense related to property and equipment used to service our members or at our clinics are included within medical expenses in the condensed consolidated statements of operations.
Medical Expenses
Medical expenses include claim payments, capitation payments, pharmacy costs net of rebates, allocations of certain centralized expenses, internal care delivery expenses and various other costs incurred to provide health insurance coverage and care to members, as well as estimates of future payments to hospitals and others for medical care and other supplemental benefits provided.
We have contracts with a network of hospitals, physicians, and other providers and compensate those providers and ancillary organizations based on contractual arrangements or CMS Medicare compensation guidelines. We pay these contracting providers either through fee-for-service arrangements in which the provider is paid negotiated rates for specific services provided or a capitation payment, which represent monthly contractual fees disbursed for each member regardless of medical services provided to the member. We are responsible for the entirety of the cost of health care services related to the member population, in addition to supplemental benefits provided by us to our seniors.
Capitation-related expenses are recorded on an accrual basis during the coverage period. Expenses related to fee-for-service contracts are recorded in the period in which the related services are dispensed.
Pharmacy costs represent payments for members’ prescription drug benefits, net of rebates from drug manufacturers. Receivables for such pharmacy rebates are included in accounts receivable in the condensed consolidated balance sheet.
In August 2022, the Inflation Reduction Act ("IRA") was signed into law. The law intends to increase tax revenue and reduce Medicare costs through lower prescription drug prices, inflation-based rebates, and increased financial responsibility for certain drug manufacturers. The provisions of the law are set to take effect over seven years from 2023 to 2029. For the three and nine months ended September 30, 2026 and September 30, 2025, we experienced an increase in both Part D premium revenues and medical expenses as a result of the IRA. Our 2026 bid pricing (submitted to CMS in June 2025) and budget reflect the expected impact the IRA will have on our business for fiscal year 2026.
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Medical Expenses Payable
Medical expenses payable includes estimates of our obligations for medical care services that have been rendered on behalf of our members, but for which claims have either not yet been received or processed, loss adjustment expense reserve for the expected costs of settling these claims, and for liabilities related to physician, hospital, and other medical cost disputes.
We develop estimates for medical expenses incurred but not yet paid (“IBNP”), which includes an estimate for claims incurred but not reported (“IBNR”) and a payable for adjudicated claims. IBNR is estimated using an actuarial process that is consistently applied and centrally controlled. Medical expenses payable also includes an estimate for the costs necessary to process unpaid claims at the end of each period. We estimate the IBNR liability using actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. These actuarial methods consider factors, such as cost trends and completion factors that are assessed based on historical data for payment patterns, product mix, seasonality, utilization of health care services, and other relevant factors. Each period, we re-examine previously established IBNR estimates based on actual claim submissions and other changes in facts and circumstances. As the IBNR estimates recorded in prior periods develop, we adjust the amount of the estimates and include the changes in estimates in medical expenses in the period in which the change is identified.
Actuarial Standards of Practice generally require that the IBNP estimates be adequate to cover obligations under moderately adverse conditions. Moderately adverse conditions are situations in which the actual claims are expected to be higher than the otherwise estimated value of such claims at the time of estimate. In many situations, the claims amount ultimately settled will be different than the estimate that satisfies the Actuarial Standards of Practice. We include in our IBNP an estimate for medical claims liability under moderately adverse conditions, which represents the risk of adverse deviation of the estimates in our actuarial method of reserving. We believe that medical expenses payable is adequate to cover future claims payments required. However, such estimates are based on knowledge of current events and anticipated future events. Therefore, the actual liability could differ materially from the amounts provided.
We reassess the profitability of contracts for providing coverage to members when current operating results or forecasts indicate probable future losses. A premium deficiency reserve is established in current operations to the extent that the sum of expected future costs, claim adjustment expenses, and maintenance costs exceed related future premiums under contract and investment income. For purposes of determining premium deficiencies, contracts are grouped in a manner consistent with the method of acquiring, servicing, and measuring the profitability of such contracts. Losses recognized as a premium deficiency result in a beneficial effect in subsequent periods as operating losses under these contracts are charged to the liability previously established.
Part D Subsidies
We also receive advance payments each month from CMS related to Catastrophic Reinsurance, Manufacturer Discount Program, the Low-Income Member Cost Sharing Subsidy (“Part D Subsidies”), and Select Drug Prepayments related to the Maximum Fair Price Program. Reinsurance subsidies represent funding from CMS for our portion of prescription drug costs that exceed the member’s out-of-pocket threshold or the catastrophic coverage level. Low-income cost sharing subsidies represent funding from CMS for all or a portion of the deductible, the coinsurance and co-payment for low-income beneficiaries. Additionally, the Inflation Reduction Act mandates consumer discounts on most brand-name prescription drugs for Part D plan participants in the initial coverage and catastrophic phases. These discounts are ultimately funded by the pharmaceutical manufacturers. In 2025, the IRA retired the Coverage Gap Discount Program, introduced the Manufacturer Discount Program, and changed the members' cost thresholds for the catastrophic phase. New in 2026, CMS is providing prepayment to cover liabilities associated with the Maximum Fair Price Program. These program changes and the corresponding changes in prepayments are reflected in our 2026 experience.
Shared Risk Reserve Arrangements
We established a fund (also referred to as “a pool”) for risk and profit-sharing with various independent physician associations (“IPAs”). The pool enables us and our IPAs to share in the financial responsibility and/or upside associated with providing covered medical expenses to our members. The risk pool is based on a contractually agreed upon medical budget, typically based upon a percentage of revenue. If actual medical expenses are less than the budgeted amount, this
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results in a surplus. Conversely, if actual medical expenses are greater than the budgeted amount, this results in a deficit. We will distribute the surplus, or a portion thereof, to each IPA based upon contractual terms. Deficits are charged to shared risk providers’ risk pool as per the contractual term and evaluated for collectability at each reporting period.
We record risk-sharing receivables and payables on a gross basis on the condensed consolidated balance sheets. Throughout the year, we evaluate expected losses on risk-sharing receivables and record the resulting expected losses to the reserve. We systematically build and release reserves based on adequacy and its assessment of expected losses on a monthly basis. Credit loss associated with risk share deficit receivables are recorded within medical expense in the condensed consolidated statements of operations. As of September 30, 2026 and December 31, 2025, we recorded an allowance for credit losses for substantially all of the risk-sharing receivable balance due to collection risk related to the balance. The risk-sharing payable is included within medical expenses payable on the condensed consolidated balance sheets.
Concentrations of Credit Risk
Equity-Based Compensation
Equity-based compensation expense is measured and recognized based on the grant date fair value of the awards. The grant date fair value of stock options is estimated using the Black-Scholes option pricing model. The grant date fair value of restricted stock units (“RSUs”) and performance stock units ("PSUs") is generally estimated based on the fair value of our underlying common stock on the date of grant. For PSUs with market-based performance conditions, the fair value is determined using a Monte Carlo simulation.
The Black-Scholes option pricing model requires the use of highly subjective assumptions, including the award’s expected term, the fair value of the underlying common stock, the expected volatility of the price of the common stock, risk-free interest rates, and the expected dividend yield of the common stock. The assumptions used to determine the fair value of the stock-based awards are management’s best estimates and involve inherent uncertainties and the application of judgment. The expected term represents the period the stock-based awards are expected to be outstanding. As we did not have sufficient historical experience for determining the expected term of the stock option awards granted, we utilized the simplified method available under GAAP. As we did not have a substantial trading history, volatility assumptions were developed using a combination of the Company's historical volatility and the historical volatilities of a set of peer companies, adjusted for debt-equity leverage. Equity-based compensation expense for awards with service-based vesting only is recognized on a graded vesting schedule over the requisite service period of the awards, which is generally or four years .
Equity-based compensation expense for PSU awards with Company performance-based vesting is recognized over the requisite service period on a graded vesting schedule and is only recognized when the Company concludes that it is probable that the performance condition(s) will be achieved. At each reporting period, the Company reassesses the probability of achieving the performance criteria. Determining whether the performance criteria will be achieved involves judgment, and the estimate of share-based compensation expense may be revised periodically based on changes in the probability of achieving the performance criteria. Revisions are reflected in the period in which the estimate is changed. We account for forfeitures as they occur. For PSU awards with market-based performance conditions, equity-based compensation expense for each performance tranche is recognized on a straight-line basis over the requisite service period. As the grant date fair value is derived using a Monte Carlo simulation, the probability of meeting the market-based performance conditions is factored into the fair value and no reassessment is required.
Equity-based compensation is recorded within selling, general and administrative expenses, and medical expenses based on the function of the applicable employee and non-employee.
Net Income (loss) per Share
Net income (loss) per share is calculated based on net income (loss) attributable to Alignment Healthcare, Inc.'s stockholders. Potentially dilutive common stock equivalents for the Company include stock options, unvested RSUs, unvested PSUs, and convertible senior notes.
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The following table sets forth the computation of basic and diluted net income (loss) per share for the three and nine months ended September 30, 2026 and September 30, 2025:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | $ | ||||||||||||||||||
| Less: Net loss attributable to noncontrolling interests | ( | ||||||||||||||||||||||
| Net income (loss) attributable to Alignment Healthcare, Inc. | $ | ( | $ | $ | $ | ||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Total weighted-average common shares outstanding | |||||||||||||||||||||||
| Less: Restricted shares of common stock | ( | ||||||||||||||||||||||
| Total weighted-average common shares outstanding, net of restricted shares of common stock - basic | |||||||||||||||||||||||
| Dilutive effect of: | |||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| RSUs | |||||||||||||||||||||||
| PSUs | |||||||||||||||||||||||
| Shares used to compute diluted income per common share | |||||||||||||||||||||||
| Net income (loss) per share: | |||||||||||||||||||||||
| Basic income (loss) per share | $ | ( | $ | $ | $ | ||||||||||||||||||
| Diluted income (loss) per share | $ | ( | $ | $ | $ | ||||||||||||||||||
Basic net loss per share is the same as diluted net loss per share for the three months ended September 30, 2026 as the inclusion of all potentially dilutive shares would have been anti-dilutive.
Options outstanding that are antidilutive and therefore not factored into the weighted average common shares above were 2,059,731 for the nine months ended September 30, 2026. RSUs outstanding that are antidilutive and therefore not factored into the weighted average common shares above were 46,462 for the nine months ended September 30, 2026. Shares used to compute diluted income per common share for the nine months ended September 30, 2026 also excludes 23,768,341 of potentially outstanding shares related to our convertible senior notes, as these had an antidilutive effect on diluted income per share. Additionally, for the nine months ended September 30, 2026, we excluded 3,776,177 PSUs as the performance targets have not yet been achieved as of September 30, 2026. See Note 10, Equity-Based Compensation.
Recent Accounting Pronouncements Issued
In December 2025, the FASB issued ASU 2025-11 "Interim Reporting (Topic 270): Narrow-Scope Improvements", which clarifies and reorganizes existing U.S. GAAP guidance for interim financial reporting without changing the underlying disclosure requirements. The update refines the scope of Topic 270 to apply to entities that present a complete set of interim financial statements (or condensed financial statements with accompanying notes) and introduces a more principles-based disclosure objective focused on reporting material changes since the most recent annual reporting period. It also consolidates and streamlines interim disclosure guidance—previously dispersed across various topics—into a more accessible framework within Topic 270, with the goal of improving consistency and usability in practice while avoiding
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unnecessary repetition of annual disclosures. ASU 2025-11 is effective for public business entities for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its financial statements.
In September 2025, the FASB issued ASU 2025-06 "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software", which removes the multi-stage model when determining internal-use software development cost capitalization. Under the new ASU, such software costs are capitalized when management has authorized and committed to funding the software project, and if it is probable that the project will be completed and the software will be used to perform the function intended. If a project is still subject to major uncertainty, capitalization is prohibited. ASU 2025-06 is effective for annual periods beginning after December 15, 2027 (and interim reporting periods within those annual reporting periods). The Company is currently evaluating the impact of this ASU on its financial statements.
In November 2024, the FASB issued ASU 2024-03 “Disaggregation of Income Statement Expenses”, which improves income statement presentation and disclosures related to expenses. It requires a public entity to disaggregate key expense categories such as employee compensation, depreciation and intangible asset amortization within its financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within the Company's fiscal year 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its disclosures of income statement expenses.
3. Fair Value
The following tables present the carrying value and fair value of these financial instruments as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | |||||||||||||||||||||||
| Fair Value | |||||||||||||||||||||||
| Carrying Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| U.S. Treasury bills | $ | $ | $ | $ | |||||||||||||||||||
| Certificate of deposits | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Fair Value | |||||||||||||||||||||||
| Carrying Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| U.S. Treasury bills | $ | $ | $ | $ | |||||||||||||||||||
| Certificate of deposits | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
The Company estimates the fair value of its convertible senior notes based on valuations provided by third-party pricing services. Fair value of the long-term debt as of September 30, 2026 was approximately $325,675 . The Company's fair value of long-term debt disclosure is classified within Level 2 of the valuation hierarchy. As of December 31, 2025, the fair value of our long-term debt was approximately $514,164 .
The carrying value of long-term debt represents the outstanding balance, net of unamortized debt issuance costs which was $324,497 and $323,176 as of September 30, 2026 and December 31, 2025, respectively.
Our nonfinancial assets and liabilities, which include goodwill, intangible assets, property, and equipment, are not required to be measured at fair value on a recurring basis. However, on a periodic basis, or whenever events or changes in circumstances indicate that their carrying value may not be recoverable, we assess these assets for impairment. No such impairment resulted during the nine months ended September 30, 2026. We recorded an impairment charge related to goodwill as of December 31, 2025. See Note 6, Goodwill and Intangible Assets.
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U.S. Treasury Securities Investments
As of September 30, 2026 and December 31, 2025, the Company had $15,260 and $28,413 , respectively, of investments in U.S. Treasury bills, which were classified as held to maturity and carried at amortized cost. As of September 30, 2026, $15,260 of the investments are included in short-term investments in the condensed consolidated balance sheets as the original maturities are greater than three months and less than twelve months. As of December 31, 2025, the entire balance was included in short-term investments as the original maturities were greater than three months and less than twelve months. The Company has the intent and ability to hold these securities to maturity and gross unrecognized gains and losses were immaterial.
Restricted Investments
Restricted investments are composed of investments in U.S. Treasury bills and certificates of deposits and are included within other assets in the condensed consolidated balance sheets. As of September 30, 2026 and December 31, 2025, the Company had $1,029 and $1,043 of restricted investments in U.S. Treasury bills and $2,360 and $2,345 of restricted investments in certificates of deposits, respectively. The Company has the intent and ability to hold these investments until maturity; therefore, these investments are stated at amortized cost. Restricted investments are required to be maintained at a financial institution within certain states. As of September 30, 2026 and December 31, 2025, these investments had maturities with less than 12 months. Due to the nature of the state's requirements, these assets are classified as noncurrent assets regardless of the contractual maturity date.
Money Market Funds
4. Accounts Receivable
Accounts receivable consisted of the following as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Government receivables | $ | $ | |||||||||
| Pharmacy rebate receivables | |||||||||||
| Other receivables | |||||||||||
| Total accounts receivable | |||||||||||
| Allowance for credit losses | ( | ( | |||||||||
| Accounts receivable, net | $ | $ | |||||||||
The allowance for expected credit losses for accounts receivable is based primarily on past collections experience relative to the length of time receivables are past due. However, when available evidence reasonably supports an assumption that future economic conditions will differ from current and historical payment collections, an adjustment is reflected in the allowance for expected credit losses. We record pharmacy rebates and other receivables based on contractual terms and expected collections and our estimation process for contractual allowances for such balances generally results in an allowance for balances outstanding greater than 90 days or if expected credit risks are known.
Receivables and any associated allowance are written off only when all collection attempts have failed and such amounts are determined unrecoverable. We regularly review the adequacy of these allowances based on a variety of factors, including age of the outstanding receivable and collection history. When circumstances related to specific collection patterns change, estimates of the recoverability of receivables are adjusted. Because substantially all of our receivable amounts are readily determinable and a large portion of our creditors are governmental authorities, our allowance for credit losses is insignificant.
We recorded credit loss related to accounts receivable of $434 and $286 during the three months ended September 30, 2026 and 2025, respectively, and $699 and $548 during the nine months ended September 30, 2026 and 2025, respectively.
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The amounts were recorded in selling, general and administrative expenses in the condensed consolidated statements of operations.
5. Property and Equipment
Property and equipment consisted of the following as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Computers and equipment | $ | $ | |||||||||
| Office equipment and furniture | |||||||||||
| Software | |||||||||||
| Leasehold improvements | |||||||||||
| Construction in progress | |||||||||||
| Subtotal | |||||||||||
| Less accumulated depreciation | ( | ( | |||||||||
| Property and equipment-net | $ | $ | |||||||||
6. Goodwill and Intangible Assets
Intangible assets consisted of the following as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | |||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Weighted Average Life | ||||||||||||||||||||
| Goodwill | $ | $ | — | $ | — | ||||||||||||||||||
| License (indefinite lived) | — | — | |||||||||||||||||||||
| Plan member relationships | ( | ||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| Total | $ | $ | ( | $ | |||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Weighted Average Life | ||||||||||||||||||||
| Goodwill | $ | $ | — | $ | — | ||||||||||||||||||
| License (indefinite lived) | — | — | |||||||||||||||||||||
| Plan member relationships | ( | ||||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| Total | $ | $ | ( | $ | |||||||||||||||||||
Amortization expense relating to intangible assets for the three months ended September 30, 2026 and 2025 was $0 0 and $634 , respectively. Included within the amortization balance for the nine months ended September 30, 2025 was $634 in impairment charges related to the remeasurement of goodwill associated with one of our subsidiaries.
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7. Medical Expenses Payable
The following table is a detail of medical expenses payable as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Claims incurred but not paid | $ | $ | |||||||||
| Capitation and risk-sharing payable | |||||||||||
| Part D subsidies and other | |||||||||||
| Medical expenses payable | $ | $ | |||||||||
Each period, we re-examine previously established outstanding claims reserve estimates based on actual claims submissions and other changes in facts and circumstances. As more complete claim information becomes available, we adjust the amount of the estimates and include the changes in estimates in claim costs in the period in which the change is identified. Substantially all of the total claims paid by us are known and settled within the first year from the date of service, and substantially all remaining claim amounts are paid within a three-year period.
The following table presents components of the change in medical expenses payable as of September 30, 2026 and 2025:
| September 30, 2026 | September 30, 2025 | ||||||||||
| Claims incurred but not paid - beginning balance | $ | $ | |||||||||
| Incurred related to: | |||||||||||
| Current year | |||||||||||
| Prior years | ( | ( | |||||||||
| Total incurred, net of reinsurance | |||||||||||
| Payments related to: | |||||||||||
| Current year | |||||||||||
| Prior years | |||||||||||
| Total payments, net of reinsurance | |||||||||||
| Claims incurred but not paid - ending balance | |||||||||||
| Capitation payable, risk-sharing payable, and other | |||||||||||
| Total medical expenses payable | $ | $ | |||||||||
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8. Long-Term Debt
Long-term debt is recorded at carrying value in the condensed consolidated balance sheets. The carrying value of long-term debt outstanding, net of unamortized debt issuance costs, consisted of the following as of September 30, 2026 and December 31, 2025:
| September 30, 2026 | December 31, 2025 | ||||||||||
| Long-term debt | $ | $ | |||||||||
| Less unamortized debt issuance costs | ( | ( | |||||||||
| Long-term debt-net of amortization | |||||||||||
| Less current maturities of long-term debt | |||||||||||
| Long-term debt - net of current portion | $ | $ | |||||||||
Convertible Senior Notes
On November 22, 2024 the Company completed the sale of $330,000 of our 4.25 % Convertible Senior Notes (the “Notes”). The Notes were issued pursuant to an indenture (the “Indenture”), dated as of November 22, 2024, between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Notes are senior, unsecured obligations of the Company, and interest will be payable semi-annually in arrears at a rate of 4.25 % per annum beginning on May 15, 2025. The Notes will mature on November 15, 2029, unless earlier repurchased, redeemed or converted in accordance with their terms. The net cash proceeds from the sale of the Notes was approximately $321,100 , after subtracting fees, discounts and estimated expenses in connection with the transaction.
Prior to the close of business on the business day immediately preceding August 15, 2029, the Notes will be convertible at the option of holders during certain periods, upon satisfaction of certain conditions. On or after August 15, 2029, the Notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Notes may be settled in shares of Company common stock, cash or a combination of cash and shares of Company common stock, at the Company's election.
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 $215,000 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.
The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25 % in principal amount of the outstanding notes may declare 100 % of the principal of, and accrued and unpaid special interest, if any, on, all the notes to be due and payable.
The Company has recognized the Notes in their entirety as a liability on the condensed consolidated balance sheet and no portion of the proceeds from the issuance of the convertible debt instrument was accounted for separately as an embedded conversion feature within stockholders’ equity.
Future maturities under the Notes for each of the next five years ending September 30, are as follows:
| Amount | |||||
| Remainder of 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| $ | |||||
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Revolving Credit Facility
On February 26, 2026 (the “Effective Date”), the Company, Alignment Healthcare USA, LLC, an indirect wholly owned subsidiary of the Company (the “Borrower”) and certain other subsidiaries of the Company (together with the Company and the Borrower, the “Borrower Parties”) entered into a Credit Agreement with Citibank, N.A., as administrative agent, and the lenders party thereto (the “Credit Agreement”). The Credit Agreement matures on February 26, 2029, and provides for a $200,000 senior secured revolving credit facility (the “Credit Facility”), with sublimits of up to $20,000 for the issuance of letters of credit and $5,000 for swingline loans. Subject to meeting certain customary conditions, the Borrower may request an increase to the commitments under the Credit Facility or to establish one or more new term loan facilities by up to an amount equal to the greater of $50,000 or 100 % of the Borrower Parties’ Consolidated EBITDA (as defined in the Credit Agreement) for the most recently completed four fiscal quarters of the Borrower Parties for which financial statements have been delivered.
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 September 30, 2026.
Loans under the Credit Facility will bear interest at a floating rate, which can be either, at the Borrower’s option, (a) Term SOFR (as defined in the Credit Agreement) plus an applicable margin that ranges from 2.0 % to 2.5 % per annum with respect to Term SOFR loans or (b) a Base Rate (as defined in the Credit Agreement) plus an applicable margin that ranges from 1.0 % to 1.5 % per annum with respect to Base Rate loans, based on the consolidated senior secured leverage ratio for the Borrower Parties and their affiliates, as calculated in accordance with the Credit Agreement. The Borrower is also required to pay certain fees in connection with the Credit Agreement, including commitment fees on a quarterly basis in respect of the unutilized portion of the commitments under the Credit Agreement and certain fees to each of the lenders upon the effectiveness of the Credit Agreement. The Borrower may voluntarily repay outstanding borrowings under the Credit Facility at any time, without premium or penalty.
The Credit Agreement includes financial covenants that require us to maintain, as of the last day of each fiscal quarter (commencing with the fiscal quarter ending June 30, 2026), (i) a ratio of senior secured indebtedness that is not subordinated in right of payment to the obligations under the Credit Agreement to Consolidated EBITDA (as defined in the Credit Agreement) for the period of four consecutive fiscal quarters ended on such date, of not more than 2.5 to 1.0 and (ii) Consolidated EBITDA for the period of four consecutive fiscal quarters ended on such date, of amounts specified in the Credit Agreement starting from $60,000 as of June 30, 2026, increasing to $70,000 as of June 30, 2027, and $80,000 as of June 30, 2028 and each fiscal quarter thereafter.
The Borrower’s obligations under the Credit Agreement are guaranteed by the Company and certain subsidiaries of the Company and secured by substantially all of the assets of the Borrower, the Company and such subsidiaries of the Company, subject to customary exceptions. None of the Company’s health plan subsidiaries or other regulated entities are guarantors under the Credit Agreement and the equity in such subsidiaries was not pledged. The Credit Agreement contains customary representations and warranties, as well as affirmative and negative covenants. Negative covenants include, among others, customary covenants that restrict the ability of the Company and its subsidiaries, without the approval of requisite lenders, to engage in certain fundamental transactions, incur debt and liens, enter into transactions with affiliates and make certain restricted payments and restricted investments, in each case, as set forth in the Credit Agreement and subject to certain thresholds and exceptions. The Credit Agreement also contains other customary covenants and events of default for secured credit facilities of this type. Upon an event of default that is not cured or waived within any applicable cure periods, in addition to other remedies that may be available to the lenders, the obligations under the Credit Agreement may be accelerated. As of September 30, 2026, there was no outstanding debt under the credit facility and we were in compliance with all financial covenants.
9. Income Taxes
For the three and nine months ended September 30, 2026, we recorded income tax (benefit) expense of $(22 ) and $1,269 . For the three and nine months ended September 30, 2025 we recorded income tax expense of $2 and $3,247 . The change in tax for the three months ended September 30, 2026 when compared to the three months ended September 30, 2025 is primarily attributable to a change in state taxes. Our future effective tax rate may vary from the statutory tax rate primarily due to changes in our valuation allowance, state taxes, and excess executive compensation.
We have federal and state cumulative net operating losses ("NOLs") as of September 30, 2026 and December 31, 2025. Given the history of losses, and after consideration for the risk associated with estimates of future taxable income, we
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established a full valuation allowance against net deferred tax assets at September 30, 2026 and 2025. Under the Tax Cuts and Jobs Act (“TCJA”), federal NOLs generated after 2017 will be carried forward indefinitely but are limited to an 80 % deduction of taxable income. NOLs generated prior to 2018 have a 20-year carryforward period and can be used to offset 100 % of taxable income. An exception to the TCJA federal NOL rule applies to certain of our subsidiaries and requires all NOLs generated from those entities to have a 20-year carryforward period and offset 100 % of taxable income. For the year ended December 31, 2025, federal and state NOL carryforwards were $617,001 and $531,012 , respectively. $95,332 of the total federal net operating loss carryforwards have an indefinite life while the remaining federal and state net operating loss carryforwards begin to expire in 2033 if not utilized. On June 27, 2024, California Senate Bill 167 (“SB 167”) was enacted into law, suspending California NOL utilization for taxpayers with more than $1 million of taxable income, effective for tax years 2024, 2025, and 2026. SB 167 includes an extended carryover period for the suspended NOLs with an additional year carryforward for each year of suspension. The Company will continue to monitor this legislation and its impact on our deferred tax assets.
An “ownership change” as defined under Section 382 of the Internal Revenue Code ("IRC"), could potentially limit the ability to utilize certain tax attributes including the Company’s substantial NOLs. Ownership change is generally defined as any significant change in ownership of more than 50% of the Company's stock over a three-year testing period. If, as a result of current or future transactions involving our common stock, we undergo cumulative ownership changes which exceed 50% over a testing period, our ability to utilize our NOL carryforwards would be subject to additional limitations under IRC Section 382. We continue to monitor changes in ownership with respect to these income tax provisions.
The One Big Beautiful Bill Act (“OBBB Act”) was enacted on July 4, 2025 in the United States. The OBBB Act includes several significant provisions, including re-establishing a 100% bonus depreciation deduction, re-establishing rules in calculating business interest expense limitations pursuant to §163(j), and removing the capitalization requirements for domestic research or experimental (“R&E”) expenditures paid or incurred in tax years beginning after December 31, 2024. We have considered the applicable tax impact of the OBBB Act within the 2026 financial statements.
10. Equity-Based Compensation
Equity Awards
Stock Options
Our outstanding stock options generally vest 25 four years and generally expire 10 years from the date of the grant. The 2021 Equity Incentive Plan (“Plan”) provides that stock option grants will be made with an exercise price at no less than the estimated fair value of common stock at the date of the grant.
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The following is a summary of the stock option transactions as of and for the three and nine months ended September 30, 2026:
| Stock Options Outstanding | |||||||||||||||||||||||
| (amounts in thousands, except shares and per share amount) | Shares Subject to Options Outstanding | Weighted- Average Exercise Price per Option | Weighted- Average Remaining Contractual Terms (in years) | Aggregate Intrinsic Value | |||||||||||||||||||
| Balances as of December 31, 2025 | $ | $ | |||||||||||||||||||||
| Options granted | |||||||||||||||||||||||
| Options exercised | ( | ||||||||||||||||||||||
| Options forfeited / expired | ( | ||||||||||||||||||||||
| Balances as of March 31, 2026 | |||||||||||||||||||||||
| Options granted | |||||||||||||||||||||||
| Options exercised | ( | ||||||||||||||||||||||
| Options forfeited / expired | ( | ||||||||||||||||||||||
| Balances as of June 30, 2026 | |||||||||||||||||||||||
| Options granted | |||||||||||||||||||||||
| Options exercised | ( | ||||||||||||||||||||||
| Options forfeited / expired | ( | ||||||||||||||||||||||
| Balances as of September 30, 2026 | $ | ||||||||||||||||||||||
| Vested and Exercisable as of September 30, 2026 | $ | $ | |||||||||||||||||||||
Aggregate intrinsic value represents the difference between the exercise price of the option and the closing price of our common stock. The aggregate intrinsic value of options exercised for the three and nine months ended September 30, 2026 was $0 and $1 , respectively. No
Restricted Stock Units
Our outstanding Restricted Stock Units ("RSU") generally vest 33 three years or 25 four years .
The following is a summary of RSU transactions as of and for the three and nine months ended September 30, 2026:
Restricted Stock Units | Weighted-Average Grant Date Fair Value | ||||||||||
| Unvested and outstanding as of December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Unvested and outstanding as of March 31, 2026 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Cancelled/forfeited | ( | ||||||||||
| Unvested and outstanding as of June 30, 2026 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Cancelled/forfeited | ( | ||||||||||
| Unvested and outstanding as of September 30, 2026 | $ | ||||||||||
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Performance-based Restricted Stock Units ("PSUs")
Generally, for our outstanding PSUs, each grantee is eligible to vest in a number of PSUs ranging from 0 % to 200 % of the target number of PSUs granted, based on the aggregated achievement by the Company of certain performance metrics during the applicable performance period. The achievement of PSUs relative to the approved target is based on the following performance metrics and relative weighting: Revenue (50 % weighting) and Adjusted EBITDA (50 % weighting). 100 % of the total number of earned PSUs will become vested upon certification of achievement of the performance metrics by the Compensation Committee on or about March 1st following the end of the applicable performance period, subject to continued service to the Company through such date.
Market-based PSUs
On February 24, 2026 (the “Grant Date”), the Board of Directors of the Company approved the grant of certain PSUs to John Kao, the Company’s Chief Executive Officer (the “PSU Award”), under the Company’s 2021 Equity Incentive Plan.
Tranches of the PSU Award will be earned and vest only upon both (i) the achievement of pre-determined price per share goals (described below) over the period commencing on the Grant Date and ending on the fifth anniversary of the Grant Date (the “Measurement Period”); and (ii) Mr. Kao’s continued employment or service as the Company’s Chief Executive Officer through the third anniversary of the Grant Date, unless otherwise agreed to (the “Service Requirement”).
The PSUs will become earned (“Earned PSUs”) in three tranches based on the achievement of the following volume-weighted average price per share goals during the Measurement Period (the “Stock Price Hurdles”):
| Price Per Share Goals | Number of Earned PSUs | |||||||
| First Stock Price Hurdle | $ | |||||||
| Second Stock Price Hurdle | $ | |||||||
| Third Stock Price Hurdle | $ | |||||||
A Stock Price Hurdle is achieved if the volume-weighted average price per share over any 30 -consecutive-trading-day period during the Measurement Period equals or exceeds the applicable price. Any tranche of PSUs that Mr. Kao has earned will become vested upon the later of (i) the date on which the applicable Stock Price Hurdle has been achieved or (ii) the date on which the Service Requirement has been met, subject to his continued service through such later date. PSUs for which the relevant Stock Price Hurdle has not been achieved by the end of the Measurement Period will be forfeited.
The following is a summary of PSU transactions for the three and nine months ended September 30, 2026:
| Performance-based restricted stock units | Weighted-Average Grant Date Fair Value | ||||||||||
| Unvested and outstanding as of December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | |||||||||||
| Forfeited | |||||||||||
| Unvested and outstanding as of March 31, 2026 | $ | ||||||||||
| Granted | |||||||||||
| Vested | |||||||||||
| Cancelled/forfeited | |||||||||||
| Unvested and outstanding as of June 30, 2026 | $ | ||||||||||
| Granted | |||||||||||
| Vested | |||||||||||
| Cancelled/forfeited | |||||||||||
| Unvested and outstanding as of September 30, 2026 | $ | ||||||||||
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Equity-Based Compensation Expense
Total equity-based compensation expense was presented on the statement of operations as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (amounts in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Selling, general and administrative expenses | $ | $ | $ | $ | |||||||||||||||||||
| Medical expenses | |||||||||||||||||||||||
| Total equity-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
As of September 30, 2026, there was $81,760 in unrecognized compensation expense related to all non-vested awards (Options, RSUs and PSUs) that will be recognized over the weighted-average period of 1.77 years.
11. Regulatory Requirements and Restricted Funds
Our health plans or risk-bearing entities are required to maintain minimum capital requirements prescribed by various regulatory authorities in each of the states in which it operates.
Risk-Based Capital
The National Association of Insurance Commissioners has adopted rules, which, if implemented by the states, set minimum capitalization requirements for insurance companies, health maintenance organizations ("HMOs"), and other entities bearing risk for health care coverage. The requirements take the form of risk-based capital ("RBC") rules, which may vary from state to state. Certain states in which our health plans or risk-bearing entities operate have adopted the RBC rules. Our health plans or risk-bearing entities were in compliance with the RBC requirements as of September 30, 2026.
Tangible Net Equity
Our health plans in California are required to comply with the tangible net equity ("TNE") requirements. The required amount is 150% of the larger of: (1) $1,000; (2) the sum of 2% of the first $150,000 of annualized premium revenue and 1% of annualized premium revenue in excess of $150,000; or (3) 8% of the first $150,000 of annualized health care expenditures except those paid on a capitated or managed hospital payment basis, plus 4% of the annualized health care expenditures in excess of $150,000, except those paid on a capitated or managed hospital payment basis, plus 4% of annualized hospital expenditures paid on a managed hospital payment basis. For newer health plans, through the first three years immediately following the health plan’s operational start date, the required amount is 200% of the larger of the TNE calculation described above. We were in compliance with the TNE requirements as of September 30, 2026.
Certain states regulate the payment of dividends, loans, or other cash transfers from our regulated subsidiaries to our non-regulated subsidiaries and parent company. Such payments may require approval by state regulatory authorities and are limited based on certain financial criteria, such as the entity’s level of statutory income and statutory capital and surplus, or the entity’s level of tangible net equity or net worth, amongst other measures. These regulations vary by state.
We have the ability to provide additional capital to each of our health plans or risk-bearing entities when necessary to ensure that the RBC and TNE requirements are met.
Restricted Assets
Pursuant to the regulations governing our subsidiaries, we maintain certain deposits required by the government authorities in the form of cash, certificate of deposit and Treasury bills as protection in the event of insolvency. The use of funds from these investments is limited as required by regulation in the various states in which we operate, or as needed in the event of insolvency. Therefore, these deposits are reported within other assets on the condensed consolidated balance sheets.
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12. Commitments and Contingencies
Legal Proceedings
We record a liability and accrue the costs for a loss when an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. In some cases, no estimate of the possible loss or range of loss in excess of amounts accrued, if any, can be made because of the inherently unpredictable nature of legal and regulatory proceedings. While the liability and accrued costs reflect our best estimate, the actual amounts may materially be different.
Whistleblower Complaint
On July 7, 2026, a former executive officer filed a lawsuit against the Company and certain officers in the U.S. District Court for the Central District of California alleging whistleblower retaliation, constructive discharge, breach of contract and compensation-related claims. The plaintiff alleges that these actions were taken after he reported concerns of accounting irregularities. The Company believes the claims are without merit and intends to defend the matter vigorously. No accrual has been included in the accompanying condensed consolidated financial statements with respect to this lawsuit.
We may be involved in various litigation matters in the ordinary course of business. In the opinion of management, the ultimate resolution of legal proceedings is not expected to have a material adverse effect on the condensed consolidated financial statements. Amounts accrued for legal proceedings were not material as of September 30, 2026 and December 31, 2025.
Risk Adjustment Data Validation Audit
On June 25, 2025, the Company was notified that its California HMO plan had been selected for an audit of Medicare Advantage contract-specific risk adjustment data validation (“RADV”) with respect to payment year 2019. CMS conducts RADV audits in order to validate the coding practices of and supporting documentation maintained by health care providers and such audits may result in retrospective adjustments to payments made to the Company’s health plans. Under CMS’s final rule issued in 2023, CMS announced its intent to apply a revised methodology, including extrapolated audit findings to estimate contract-wide overpayments and without application of the previously employed “fee-for-service adjuster” that accounted for the error rate in the original Medicare data that CMS used to develop the risk adjustment model. Additionally, in May 2025, CMS announced a significant expansion to its RADV audit program, stating, among other things, that it intended to conduct RADV audits with extrapolation on all eligible MA plans on an annual basis and that it would accelerate the timetable for clearing its backlog of audits with respect to payment years 2018-24. However, on September 25, 2025, a Federal District Court in Texas vacated CMS’s final rule regarding extrapolation of results of RADV audits for payment years beginning with payment year 2018. As of September 30, 2026, the Company is in the process of collecting and reviewing medical records with respect to the member cohort selected for the RADV audit. The Company is continuing to monitor developments with respect to these audits and continuing to assess their potential impact.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our audited financial statements and the accompanying notes as well as “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025 (our "Annual Report"), as well as our unaudited condensed consolidated financial statements and related notes presented herein in Part I, Item 1 included elsewhere in this Quarterly Report. Unless the context otherwise indicates or requires, the terms “we”, “our” and the “Company” as used herein refer to Alignment Healthcare, Inc. and its consolidated subsidiaries.
In addition to historical data, the discussion contains forward-looking statements about the business, operations and financial performance of the Company based on our current expectations that involves risks, uncertainties and assumptions. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed above in "Forward-Looking Statements," and Part II, Item 1A, "Risk Factors.”
Overview
Alignment is a next generation, consumer-centric and clinically focused platform designed to improve the healthcare experience for seniors. We deliver this experience through our Medicare Advantage plans, which are customized to meet the needs of a diverse array of seniors. Our innovative model of consumer-centric healthcare is purpose-built to provide seniors with care as it should be: high quality, low cost and accompanied by a vastly improved consumer experience. We combine a proprietary technology platform and a high-touch clinical model that enhances our members’ lifestyles and health outcomes while simultaneously controlling costs, which allows us to reinvest savings back into our platform and products to directly benefit the senior consumers.
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 301,200 members as of September 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.
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 8.6 million Medicare-eligible seniors in our current markets.
Factors Affecting Our Performance
Our unique clinical model, led by employed clinical teams known as Care Anywhere, acts upon insights derived from our proprietary technology platform, AVA. This integration between our technology and employed care model is a key element of our business with capabilities that we expect to impact our future performance. AVA’s data insights, combined with the clinical control of our care model, enable us to personalize and manage our member relationships, care quality, and to coordinate and manage risk with our provider partners. AVA’s unified platform, analytical tools and data across the healthcare ecosystem enable us to produce consistent outcomes, unit economics and support new member growth. Additionally, our historical financial performance has been, and we expect our financial performance in the future will be, driven by our ability to:
•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 September 30, 2026, we have approximately 301,200 Health Plan Members, which, according to CMS data, represent only 6% market share of Medicare Advantage enrollees in our markets.
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•Drive Growth and Consistent Outcomes Through New Market Expansion: As part of our long-term growth strategy, we may enter new markets with the goal of building brand awareness across our key stakeholders to achieve meaningful market share over time. We intend to focus on markets with significant senior populations where we expect to be able to replicate our model most effectively. Our existing markets also feature a diverse array of membership profiles across ethnicities, income levels and acuity. Since 2020, we have expanded into 29 markets and four states.
•Provide Superior Service, Care and Consumer Satisfaction: We are highly focused on providing superior service and care to our members and on maintaining high levels of consumer satisfaction, which are important drivers of our financial performance and growth. The CMS Five Star Quality Rating System provides economic incentives to Medicare Advantage plans that achieve Star ratings of 4.0 or higher by (i) meeting certain care criteria (such as completing particular preventative screening procedures or ensuring proper follow-up care is provided for specific conditions or episodes) and (ii) receiving high member satisfaction ratings. These incentives impact financial performance in the year following the CMS Rating Year (for example, CMS’s announcement of the 2027 Ratings occurred in the second half of 2026 and will impact our financial performance in 2028). As of the current 2026 rating year, one hundred percent of our health plan members are enrolled in plans rated 4 stars and above. With respect to the 2027 rating year, CMS recently announced that the Company’s California HMO health plan contract (H3815), which serves approximately 75% of the Company’s health plan membership, was awarded a 3.5-Star Rating. The Company retained a 4.0-Star or higher rating in each of its six other eligible plans, including three plans that achieved a 4.5-Star Rating, for the 2027 rating year. The Company has and will continue to implement enterprise-wide initiatives, including to enhance member and provider engagement, expand care gap closure programs and provide additional quality oversight. The Company believes these actions will strengthen its business and position H3815 to return to at least a 4.0-Star rating in future rating years. The Company has commenced litigation challenging certain Star Ratings measures and methodologies that it believes are inconsistent with applicable law and CMS’s statutory authority.
•Effectively Manage the Quality of Care to Improve Member Outcomes: Our care delivery model is based on a clinical continuum through which we have created a highly personalized experience that is unique to each member depending on their personal health and circumstances. Utilizing data and predictive analytics generated by AVA, our clinical continuum separates seniors into four categories in order to provide optimized care for every stage of a senior’s life: healthy, healthy utilizer, pre-chronic and chronic. We partner with our broader network of community providers to service members in our non-chronic categories, and we have developed a Care Anywhere program implemented by our internal clinical teams to care for our higher risk and/or chronically ill members. By investing in our members’ care proactively, our model has consistently reduced unnecessary and costly care while improving the quality of our members’ lifestyle and healthcare experience. By delivering superior care and preventing avoidable utilization of the healthcare system, we are able to reduce our claims expenditures in some of our largest medical expense categories, which translates to superior medical benefits ratio (“MBR”) financial performance and ultimately the ability to offer richer products in the market.
•Achieve Superior Unit Economics: As our senior population ages, their healthcare needs become more frequent and complex. To combat the healthcare cost increases that typically result, we proactively look to (i) connect with our population early in their enrollment with Alignment to assess their care needs, (ii) develop care plans and engage those members with more chronic, complex health challenges in our clinical model, and (iii) continue to monitor and evaluate our healthier members in a preventative fashion over time. Given the Medicare Advantage payment mechanism and the retention of the vast majority of our members who continue to choose Alignment after their initial selection year, we are able to focus our efforts on driving favorable long-term health outcomes for our entire population. As a result, our clinical model efforts have demonstrated the ability to lower the MBRs of our returning members. We believe this is evidence of our ability to manage the financial risk of our members as they age, and that these favorable underlying unit economic trends translate directly to our ability to continue to deliver a richer product to the marketplace. With this dynamic in mind, our consolidated MBR may be impacted year-to-year based on our pace of new member growth and mix of members by cohort. However, we believe our ability to sustain MBR performance improvement over time positions us well to invest in new member growth to drive long-term financial performance.
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•Invest in our Platform and Growth: We plan to continue to invest in our business in order to further develop our AVA platform, pursue new expansion opportunities and create innovative product offerings. In addition, in order to maintain a differentiated value proposition for our members, we continue to invest in innovative product offerings and supplemental benefits to meet the evolving needs of the senior consumer. We anticipate further investments in our business as we expand into new markets and pursue strategic acquisitions, which we expect will primarily be focused on healthcare delivery groups in key geographies, standalone and provider-sponsored Medicare Advantage plans and other complementary risk bearing assets.
•Navigate Seasonality to our Business: Our operational and financial results will experience some variability depending upon the time of year in which they are measured. We experience the largest portion of member growth during the first quarter, when plan enrollment selections made during the annual enrollment period ("AEP") from October 15th through December 7th of the prior year take effect. As a result, we expect to see a significant percentage of our member growth occur on January 1 of a given calendar year. As the year progresses, our per-member revenue often declines as new members join us, typically with less complete or accurate documentation (and therefore lower risk-adjustment scores), and senior mortality disproportionately impacts our higher-acuity (and therefore greater revenue) members. Medical costs will vary seasonally depending on a number of factors, but most significantly the seasons. Certain illnesses, such as the influenza virus, are far more prevalent during colder months of the year, which will result in an increase in medical expenses during these time periods. We therefore expect to see higher levels of per-member medical costs in the first and fourth quarters. The design of our prescription drug coverage (Medicare Part D) results in coverage that varies as a member’s cumulative out-of-pocket costs pass through successive stages of a member’s plan period, which begins annually on January 1 for renewals. In addition, we expect our corporate, general and administrative expenses to increase in absolute dollars for the foreseeable future to support our growth. Due to the timing of many of these investments, including our primary sales and marketing season, we typically incur a greater level of investment in the second half of the year relative to the first half of the year.
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Executive Summary
The following table presents key financial statistics for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| (dollars in '000's, except percentages) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||||||||||||||||
| Health plan membership (at period end) | 301,200 | 229,600 | 31.2 | % | 301,200 | 229,600 | 31.2 | % | |||||||||||||||||||||||||||
| Medical benefits ratio | 89.5 | % | 87.2 | % | 2.3 | % | 88.0 | % | 87.4 | % | 0.6 | % | |||||||||||||||||||||||
| Revenues | $ | 1,358,290 | $ | 993,695 | 36.7 | % | $ | 3,929,120 | $ | 2,935,915 | 33.8 | % | |||||||||||||||||||||||
| Income (loss) from Operations | $ | (3,794) | $ | 7,681 | (149.4) | % | $ | 53,809 | $ | 25,036 | 114.9 | % | |||||||||||||||||||||||
| Net income (loss) | $ | (8,052) | $ | 3,729 | (315.9) | % | $ | 39,924 | $ | 10,028 | 298.1 | % | |||||||||||||||||||||||
Adjusted EBITDA(1) | $ | 21,808 | $ | 32,439 | (32.8) | % | $ | 127,804 | $ | 98,530 | 29.7 | % | |||||||||||||||||||||||
Adjusted gross profit(1) | $ | 142,205 | $ | 127,456 | 11.6 | % | $ | 470,972 | $ | 369,848 | 27.3 | % | |||||||||||||||||||||||
(1)See "Adjusted EBITDA" and "Adjusted Gross Profit" below for a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP and related disclosures.
Health Plan Membership
We define Health Plan Membership as the number of members enrolled in our HMO and PPO contracts as of the end of a reporting period. We believe this is an important metric to assess growth of our underlying business, which is indicative of our ability to consistently offer a superior value proposition to seniors.
As of January 1, 2026, we no longer participate in the ACO Reach program.
Adjusted Gross Profit and Medical Benefits Ratio
Adjusted gross profit is a non-GAAP financial measure that we define as income (loss) from operations before depreciation and amortization, medical equity-based compensation expense, and selling, general, and administrative expenses. Adjusted gross profit is a key measure used by our management and Board to understand and evaluate our operating performance and trends before the impact of our consolidated selling, general and administrative expenses.
Adjusted gross profit should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of adjusted gross profit in lieu of income (loss) from operations, which is the most directly comparable financial measure calculated in accordance with GAAP.
Our use of the term adjusted gross profit may vary from the use of similar terms by other companies in our industry and accordingly may not be comparable to similarly titled measures used by other companies.
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Adjusted gross profit is reconciled as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Income (loss) from operations | $ | (3,794) | $ | 7,681 | $ | 53,809 | $ | 25,036 | |||||||||||||||
| Add back: | |||||||||||||||||||||||
| Equity-based compensation (medical expenses) | 1,511 | 1,775 | 4,815 | 4,521 | |||||||||||||||||||
| Depreciation (medical expenses) | 7 | 8 | 33 | 74 | |||||||||||||||||||
Depreciation and amortization(1) | 8,108 | 7,977 | 23,801 | 22,574 | |||||||||||||||||||
| Selling, general, and administrative expenses | 136,373 | 110,015 | 388,514 | 317,643 | |||||||||||||||||||
| Total add back | 145,999 | 119,775 | 417,163 | 344,812 | |||||||||||||||||||
| Adjusted gross profit | $ | 142,205 | $ | 127,456 | $ | 470,972 | $ | 369,848 | |||||||||||||||
(1)Amortization expense for the nine months ended September 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 September 30, 2025.
We calculate our MBR by dividing total medical expenses, excluding depreciation, and medical equity-based compensation, by total revenues in a given period. We believe our MBR is an indicator of our adjusted gross profit margin for our Medicare Advantage plans and demonstrates the ability of our clinical model to produce differentiated outcomes by identifying and providing targeted care to our high-risk members resulting in improved member health and reduced total population medical expenses. We expect that this metric may fluctuate over time due to a variety of factors, including our pace of new member growth given that new members typically join Alignment with higher MBRs, while our model has demonstrated an ability to improve MBR for a given cohort over time.
We determine, on an annual basis, whether we have satisfied the CMS minimum Medical Loss Ratio of 85%. As part of this process, adjustments are made to the MBR calculation to include certain additional expenses related to improving the quality of care provided, and to exclude certain taxes and fees, in each case as permitted or required by CMS and applicable regulatory requirements.
Adjusted EBITDA
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.
Adjusted EBITDA should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA in lieu of net income (loss), which is the most directly comparable financial measure calculated in accordance with GAAP.
Our use of the term Adjusted EBITDA may vary from the use of similar terms by other companies in our industry and accordingly may not be comparable to similarly titled measures used by other companies.
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Adjusted EBITDA is reconciled as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Net income (loss) | $ | (8,052) | $ | 3,729 | $ | 39,924 | $ | 10,028 | |||||||||||||||
| Less: Net loss attributable to noncontrolling interest | — | — | — | (254) | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Interest expense | 4,280 | 3,950 | 12,617 | 11,850 | |||||||||||||||||||
Depreciation and amortization(1) | 8,115 | 7,985 | 23,834 | 22,648 | |||||||||||||||||||
| Income taxes | (22) | 2 | 1,269 | 3,247 | |||||||||||||||||||
Equity-based compensation(2) | 17,487 | 16,227 | 49,680 | 48,967 | |||||||||||||||||||
Litigation costs (3) | — | 546 | 481 | 1,608 | |||||||||||||||||||
| Gain on sale of property and equipment | — | — | (1) | (72) | |||||||||||||||||||
| Adjusted EBITDA | $ | 21,808 | $ | 32,439 | $ | 127,804 | $ | 98,530 | |||||||||||||||
(1)Amortization expense for the nine months ended September 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 September 30, 2025.
(2)Represents equity-based compensation related to grants made in the applicable year.
(3)Represents litigation costs considered outside of the ordinary course of business based on the following considerations which we assess regularly: (i) the frequency of similar cases that have been brought to date, or are expected to be brought within two years, (ii) complexity of the case, (iii) nature of the remedies sought, (iv) litigation posture of the Company, (v) counterparty involved, and (vi) the Company's overall litigation strategy.
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Results of Operations
The following table sets forth our consolidated statements of operations data for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Earned premiums | $ | 1,348,256 | $ | 983,681 | $ | 3,901,447 | $ | 2,907,927 | |||||||||||||||
| Other | 10,034 | 10,014 | 27,673 | 27,988 | |||||||||||||||||||
| Total revenues | 1,358,290 | 993,695 | 3,929,120 | 2,935,915 | |||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Medical expenses | 1,217,603 | 868,022 | 3,462,996 | 2,570,662 | |||||||||||||||||||
| Selling, general, and administrative expenses | 136,373 | 110,015 | 388,514 | 317,643 | |||||||||||||||||||
| Depreciation and amortization | 8,108 | 7,977 | 23,801 | 22,574 | |||||||||||||||||||
| Total expenses | 1,362,084 | 986,014 | 3,875,311 | 2,910,879 | |||||||||||||||||||
| Income (loss) from operations | (3,794) | 7,681 | 53,809 | 25,036 | |||||||||||||||||||
| Other expenses: | |||||||||||||||||||||||
| Interest expense | 4,280 | 3,950 | 12,617 | 11,850 | |||||||||||||||||||
| Other income, net | — | — | (1) | (89) | |||||||||||||||||||
| Total other expense | 4,280 | 3,950 | 12,616 | 11,761 | |||||||||||||||||||
| Income (loss) before income taxes | (8,074) | 3,731 | 41,193 | 13,275 | |||||||||||||||||||
| Provision (benefit) for income taxes | (22) | 2 | 1,269 | 3,247 | |||||||||||||||||||
| Net income (loss) | $ | (8,052) | $ | 3,729 | $ | 39,924 | $ | 10,028 | |||||||||||||||
| Less: Net loss attributable to noncontrolling interest | — | — | — | (254) | |||||||||||||||||||
| Net income (loss) attributable to Alignment Healthcare, Inc. | $ | (8,052) | $ | 3,729 | $ | 39,924 | $ | 10,282 | |||||||||||||||
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The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenues for the periods indicated:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (% of revenue) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Earned premiums | 99.3 | % | 99.0 | % | 99.3 | % | 99.0 | % | |||||||||||||||
| Other | 0.7 | 1.0 | 0.7 | 1.0 | |||||||||||||||||||
| Total revenues | 100.0 | 100.0 | 100.0 | 100.0 | |||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Medical expenses | 89.6 | 87.3 | 88.1 | 87.6 | |||||||||||||||||||
| Selling, general, and administrative expenses | 10.0 | 11.1 | 9.9 | 10.8 | |||||||||||||||||||
| Depreciation and amortization | 0.6 | 0.8 | 0.6 | 0.8 | |||||||||||||||||||
| Total expenses | 100.2 | 99.2 | 98.6 | 99.2 | |||||||||||||||||||
| Income (loss) from operations | (0.2) | 0.8 | 1.4 | 0.8 | |||||||||||||||||||
| Other expenses: | |||||||||||||||||||||||
| Interest expense | 0.3 | 0.4 | 0.3 | 0.4 | |||||||||||||||||||
| Other income, net | — | — | — | — | |||||||||||||||||||
| Total other expense | 0.3 | 0.4 | 0.3 | 0.4 | |||||||||||||||||||
| Income (loss) before income taxes | (0.5) | 0.4 | 1.1 | 0.4 | |||||||||||||||||||
| Provision (benefit) for income taxes | — | — | — | 0.1 | |||||||||||||||||||
| Net income (loss) | (0.5) | 0.4 | 1.1 | 0.3 | |||||||||||||||||||
| Less: Net loss attributable to noncontrolling interest | — | — | — | — | |||||||||||||||||||
| Net income (loss) attributable to Alignment Healthcare, Inc. | (0.5) | 0.4 | % | 1.1 | % | 0.3 | % | ||||||||||||||||
Revenues
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Earned premiums | $ | 1,348,256 | $ | 983,681 | $ | 364,575 | 37.1 | % | |||||||||||||||
| Other | 10,034 | 10,014 | 20 | 0.2 | % | ||||||||||||||||||
| Total revenues | $ | 1,358,290 | $ | 993,695 | $ | 364,595 | 36.7 | % | |||||||||||||||
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Earned premiums | $ | 3,901,447 | $ | 2,907,927 | $ | 993,520 | 34.2 | % | |||||||||||||||
| Other | 27,673 | 27,988 | (315) | (1.1) | % | ||||||||||||||||||
| Total revenues | $ | 3,929,120 | $ | 2,935,915 | $ | 993,205 | 33.8 | % | |||||||||||||||
Earned Premiums. Earned premium revenues were $1,348.3 million and $983.7 million for the three months ended September 30, 2026 and 2025, respectively, an increase of $364.6 million or 37.1%. Earned premium revenues were $3,901.4 million and $2,907.9 million for the nine months ended September 30, 2026 and 2025, respectively, an increase of
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$993.5 million or 34.2%. The increase was primarily driven by growth in our Health Plan membership, which increased 31.2% between September 30, 2025 and September 30, 2026.
Other Revenue. Other revenue increased $0.02 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, an increase of 0.2%. Other revenue decreased $0.3 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, a decrease of 1.1%. For the three and nine months ended September 30, 2026, other revenue decreased as a result of 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 $743.0 million as of September 30, 2026 compared to $644.1 million as of September 30, 2025.
Expenses
| Three Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Medical expenses | $ | 1,217,603 | $ | 868,022 | $ | 349,581 | 40.3 | % | |||||||||||||||
| Selling, general and administrative expenses | 136,373 | 110,015 | 26,358 | 24.0 | % | ||||||||||||||||||
| Depreciation and amortization | 8,108 | 7,977 | 131 | 1.6 | % | ||||||||||||||||||
| Total expenses | $ | 1,362,084 | $ | 986,014 | $ | 376,070 | 38.1 | % | |||||||||||||||
| Nine Months Ended September 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Medical expenses | $ | 3,462,996 | $ | 2,570,662 | $ | 892,334 | 34.7 | % | |||||||||||||||
| Selling, general and administrative expenses | 388,514 | 317,643 | 70,871 | 22.3 | % | ||||||||||||||||||
| Depreciation and amortization | 23,801 | 22,574 | 1,227 | 5.4 | % | ||||||||||||||||||
| Total expenses | $ | 3,875,311 | $ | 2,910,879 | $ | 964,432 | 33.1 | % | |||||||||||||||
Medical Expenses. Medical expenses were $1,217.6 million and $868.0 million for the three months ended September 30, 2026 and 2025, respectively, an increase of $349.6 million, or 40.3%. Medical expenses were $3,463.0 million and $2,570.7 million for the nine months ended September 30, 2026 and 2025, respectively, an increase of $892.3 million, or 34.7%. The increase was driven primarily by the growth in Alignment’s Health Plan membership, which increased 31.2% between September 30, 2025 and September 30, 2026. The increase was also due to medical cost trends that were higher than expected in certain cost categories.
Selling, General and Administrative Expenses. Selling, general and administrative expenses were $136.4 million and $110.0 million for the three months ended September 30, 2026 and 2025, respectively, an increase of $26.4 million, or 24.0%. Selling, general and administrative expenses were $388.5 million and $317.6 million for the nine months ended September 30, 2026 and 2025, respectively, an increase of $70.9 million, or 22.3%. 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 11.1% to 10.0% for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, and from 10.8% to 9.9% for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The decrease as a percentage of revenues is mainly attributable to economies of scale gained from Alignment's membership growth.
Depreciation and Amortization. Depreciation and amortization expense was $8.1 million and $8.0 million for the three months ended September 30, 2026 and 2025, respectively, an increase of $0.1 million, or 1.6%. Depreciation and amortization expense was $23.8 million and $22.6 million for the nine months ended September 30, 2026 and 2025, respectively, an increase of $1.2 million, or 5.4%. The increase was primarily due to the amount and timing of our capital
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expenditures and the associated depreciation relative to 2025. The nine-month increase was offset by a decrease in amortization expense. For the nine months ended September 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.
Other Expenses
Interest expense. Interest expense was $4.3 million and $4.0 million for the three months ended September 30, 2026 and 2025, respectively, an increase of $0.3 million or 7.5%. Interest expense was $12.6 million and $11.9 million for the nine months ended September 30, 2026 and 2025, respectively, an increase of $0.7 million or 5.9%. 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.
Other income, net. Other income was $0.0 million and $0.0 million for the three months ended September 30, 2026 and 2025, respectively. Other income was $0.0 million and $0.1 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease was mainly attributable to gains on the sale of property and equipment during the nine months ended September 30, 2025 that did not recur in 2026.
Liquidity and Capital Resources
General
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 September 30, 2026, we had $743.0 million in cash, cash equivalents and short-term investments.
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 September 30, 2026, the operating parent company (an indirect wholly owned subsidiary of the parent company) had $140.6 million in cash, cash equivalents and short-term investments.
We may incur operating losses in the future due to the investments we intend to continue to make in expanding our operations and sales and marketing, in further developing our technology and due to the general and administrative costs we expect to incur in connection with continuing to operate as a public company. As a result, we may require additional capital resources to execute strategic initiatives to grow our business.
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.
We have based this estimate on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, results of operations, and financial condition would be adversely affected.
Certain states in which we operate as a CMS-licensed Medicare Advantage company may require us to meet certain capital adequacy performance standards and tests. The National Association of Insurance Commissioners has adopted rules which, if implemented by the states, set minimum capitalization requirements for insurance companies, HMOs, and other entities bearing risk for healthcare coverage. The requirements take the form of risk-based capital (“RBC”) rules, which may vary from state to state. Certain states in which our health plans or risk bearing entities operate have adopted the RBC rules.
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Other states in which our health plans or risk bearing entities operate have chosen not to adopt the RBC rules, but instead have designed and implemented their own rules regarding capital adequacy, such as the tangible net equity ("TNE") requirements for our health plans in California. As of September 30, 2026, our health plans or risk-bearing entities were in compliance with the minimum capital requirements.
Convertible Senior Notes
On November 22, 2024, the Company completed the sale of $330.0 million of its 4.25% Convertible Senior Notes (the "Notes"). The Notes were issued pursuant to an indenture (the "Indenture"), dated as of November 22, 2024, between the Company and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"). The Notes are senior, unsecured obligations of the Company, and interest will be payable semi-annually in arrears at a rate of 4.25% per annum beginning on May 15, 2025. The Notes will mature on November 15, 2029, unless earlier repurchased, redeemed or converted in accordance with their terms. The net cash proceeds from the sale of the Notes was approximately $321.1 million, after subtracting fees, discounts and estimated expenses in connection with the transaction.
Prior to the close of business on the business day immediately preceding August 15, 2029, the Notes will be convertible at the option of holders during certain periods, upon satisfaction of certain conditions. On or after August 15, 2029, the Notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Notes may be settled in shares of Company common stock, cash or a combination of cash and shares of Company common stock, at the Company's election.
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.
The Indenture contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% in principal amount of the outstanding notes may declare 100% of the principal of, and accrued and unpaid special interest, if any, on, all the notes to be due and payable.
The Company has recognized the Notes in their entirety as a liability on the condensed consolidated balance sheet and no portion of the proceeds from the issuance of the convertible debt instrument was accounted for separately as an embedded conversion feature within stockholders’ equity.
Revolving Credit Facility
On February 26, 2026 (the “Effective Date”), the Company, Alignment Healthcare USA, LLC, an indirect wholly owned subsidiary of the Company (the “Borrower”) and certain other subsidiaries of the Company (together with the Company and the Borrower, the “Borrower Parties”) entered into a Credit Agreement with Citibank, N.A., as administrative agent, and the lenders party thereto (the “Credit Agreement”). The Credit Agreement matures on February 26, 2029, and provides for a $200.0 million senior secured revolving credit facility (the “Credit Facility”), with sublimits of up to $20.0 million for the issuance of letters of credit and $5.0 million for swingline loans. Subject to meeting certain customary conditions, the Borrower may increase the commitments under the Credit Facility or establish one or more new term loan facilities by up to an amount equal to the greater of $50.0 million or 100% of the Borrower Parties’ Consolidated EBITDA (as defined in the Credit Agreement) for the most recently completed four fiscal quarters of the Borrower Parties for which financial statements have been delivered.
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 September 30, 2026.
Loans under the Credit Facility will bear interest at a floating rate, which can be either, at the Borrower’s option, (a) Term SOFR (as defined in the Credit Agreement) plus an applicable margin that ranges from 2.00% to 2.5% per annum with respect to Term SOFR loans or (b) a Base Rate (as defined in the Credit Agreement) plus an applicable margin that ranges from 1.0% to 1.5% per annum with respect to Base Rate loans, based on the consolidated senior secured leverage ratio for the Borrower Parties and their affiliates, as calculated in accordance with the Credit Agreement. The Borrower is also required to pay certain fees in connection with the Credit Agreement, including commitment fees on a quarterly basis in
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respect of the unutilized portion of the commitments under the Credit Agreement and certain fees to each of the lenders upon the effectiveness of the Credit Agreement. The Borrower may voluntarily repay outstanding borrowings under the Credit Facility at any time, without premium or penalty.
The Credit Agreement includes financial covenants that require us to maintain, as of the last day of each fiscal quarter (commencing with the fiscal quarter ending June 30, 2026), (i) a ratio of senior secured indebtedness that is not subordinated in right of payment to the obligations under the Credit Agreement to Consolidated EBITDA (as defined in the Credit Agreement) for the period of four consecutive fiscal quarters ended on such date, of not more than 2.5 to 1.0 and (ii) Consolidated EBITDA for the period of four consecutive fiscal quarters ended on such date, of amounts specified in the Credit Agreement starting from $60.0 million as of June 30, 2026, increasing to $70.0 million as of June 30, 2027, and $80.0 million as of June 30, 2028 and each fiscal quarter thereafter.
The Borrower’s obligations under the Credit Agreement are guaranteed by the Company and certain subsidiaries of the Company and secured by substantially all of the assets of the Borrower, the Company and such subsidiaries of the Company, subject to customary exceptions. None of the Company’s health plan subsidiaries or other regulated entities are guarantors under the Credit Agreement and the equity in such subsidiaries was not pledged. The Credit Agreement contains customary representations and warranties, as well as affirmative and negative covenants. Negative covenants include, among others, customary covenants that restrict the ability of the Company and its subsidiaries, without the approval of requisite lenders, to engage in certain fundamental transactions, incur debt and liens, enter into transactions with affiliates and make certain restricted payments and restricted investments, in each case, as set forth in the Credit Agreement and subject to certain thresholds and exceptions. The Credit Agreement also contains other customary covenants and events of default for secured credit facilities of this type. Upon an event of default that is not cured or waived within any applicable cure periods, in addition to other remedies that may be available to the lenders, the obligations under the Credit Agreement may be accelerated.
Cash Flows
The following table presents a summary of our consolidated cash flows from operating, investing and financing activities for the periods indicated:
| Nine Months Ended September 30, | |||||||||||
| (dollars in thousands) | 2026 | 2025 | |||||||||
| Net cash provided by operating activities | $ | 158,395 | $ | 190,302 | |||||||
| Net cash used in investing activities | (12,327) | (7,811) | |||||||||
| Net cash provided by financing activities | 5,834 | 2,745 | |||||||||
| Net change in cash | 151,902 | 185,236 | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 577,937 | 434,942 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 729,839 | $ | 620,178 | |||||||
Operating Activities
For the nine months ended September 30, 2026, net cash provided by operating activities was $158.4 million, a decrease of $31.9 million compared to net cash provided by operating activities of $190.3 million for the nine months ended September 30, 2025. The decrease is mainly attributable to the timing of our medical expense payments in the third quarter of 2026 compared to the third quarter of 2025 and an increase in accrued compensation and prepaid expenses and other current assets. The decrease was partially offset by an increase in net income and timing of accounts receivable settlements.
Investing Activities
For the nine months ended September 30, 2026, net cash used in investing activities was $12.3 million, an increase of $4.5 million compared to net cash used in investing activities of $7.8 million for the nine months ended September 30, 2025. The increase primarily relates to a decrease in investment maturities and an increase in capital expenditures for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase was partially offset by a decrease in investment purchases.
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Financing Activities
For the nine months ended September 30, 2026, net cash provided by financing activities was $5.8 million, an increase of $3.1 million, compared to net cash provided by financing activities of $2.7 million for the nine months ended September 30, 2025. The increase is primarily attributable to an increase in proceeds from stock option exercises for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. This increase was offset by an increase in debt issuance costs related to the revolving credit facility.
Material cash requirements from known contractual and other obligations
There have been no material changes to our contractual obligations disclosed in our Annual Report.
Off-Balance Sheet Arrangements
As of September 30, 2026, the Company had $200.0 million of borrowing capacity under the Revolving Credit Facility, see "Liquidity and Capital Resources - Revolving Credit Facility" for further information.
Critical Accounting Estimates
The discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of our wholly-owned subsidiaries and three variable interest entities (“VIEs”) in California and North Carolina that meet the consolidation requirements for accounting purposes. All intercompany transactions have been eliminated in consolidation.
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.
Recent Accounting Pronouncements
See Note 2 to our condensed consolidated financial statements, “Summary of Significant Accounting Policies—Recent Accounting Pronouncements Issued” for more information.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of exposure due to potential changes in interest rates and inflation.
Interest Rate Risk
As of September 30, 2026, we had $16.3 million of U.S. Treasury bills which were classified as held to maturity and had maturities less than twelve months. Due to the short-term duration of our investment portfolio and the low risk profile of our investments, we believe that our exposure to interest rate risk on these investments is not significant. We do not enter into investments for trading purposes.
In February 2026, we entered into a senior secured revolving credit facility of up to $200.0 million. This agreement exposes us to risks associated with market changes in interest rates through our revolving credit facility agreement, and variability in interest payments due to changes in SOFR interest rates. We manage our exposure to this market risk by monitoring available financial alternatives.
In November 2024, we completed the sale of $330.0 million of 4.25% Convertible Senior Notes. Since the Notes have a fixed annual interest rate, we have no financial or economic interest exposure associated with changes in interest rates. However, the fair value of fixed rate debt fluctuates when interest rates change. Additionally, the fair value of the Convertible Senior Notes can be impacted when the market price of our common stock fluctuates.
Inflation Risk
Based on our analysis of the periods presented, although we have experienced modest increases in unit costs and labor expenses, we believe that inflation has not had a material effect on our operating results. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. There can be no assurance that future inflation will not have an adverse impact on our operating results and financial condition.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures:
Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures were effective as of September 30, 2026.
Changes to our Internal Controls over Financial Reporting:
There were no material changes in our internal control over financial reporting during the three months ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
On July 10, 2026, the Company filed an action against the Centers for Medicare & Medicaid Services (“CMS”) and the Secretary of the U.S. Department of Health and Human Services in the U.S. District Court for the District of Columbia (Case No. 1:26-cv-02441) challenging CMS’s calculation of the Company’s Medicare Advantage Star Ratings for payment year 2027. The complaint alleges, among other things, that CMS’s use of certain measures and specifications that were not adopted through required notice-and-comment rulemaking to calculate the Company’s Star Ratings was in violation of the Administrative Procedure Act. The Company filed a motion for summary judgment on August 3, 2026, which has been fully briefed, and the parties are awaiting a potential hearing date and decision.
On October 9, 2026, the Company filed a separate action against CMS and the Secretary of the U.S. Department of Health and Human Services in the U.S. District Court for the District of Columbia (Case No. 1:26-cv-3550) challenging CMS’s calculation of the Company’s Medicare Advantage Star Ratings for payment year 2028. The complaint asserts claims consistent with those asserted in the Company’s payment year 2027 action regarding CMS’s use of certain Star Ratings measures and specifications and the calculation of the Company’s Star Ratings. For additional information regarding the Clover Health litigation, see Part II, Item 1A, “Risk Factors.”
The Company cannot predict the outcome of these proceedings.
For additional information on our legal proceedings, see Note 12, Commitments and Contingencies – Legal Proceedings, to Alignment Healthcare, Inc.'s Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report.
Item 1A. Risk Factors.
Except as set forth below, there have been no material changes to the risk factors disclosed in the Annual Report.
Our Star Rating has declined with respect to our largest Medicare Advantage contract, which will impact our quality bonus payments, and we may not be successful in maintaining or improving our Star ratings in future years.
CMS measures the quality of Medicare Advantage plans through a Five Star Quality Rating System. The Star Rating system considers various measures adopted by CMS, including, among others, quality of care, preventative services, chronic illness management and member satisfaction. The achievement of Star ratings of 4-Star or higher qualifies Medicare Advantage plans for an increase in the benchmark against which they bid (potentially increasing premium payments). With respect to the 2027 rating year, CMS recently announced that the Company’s California HMO health plan contract (H3815), which serves approximately 75% of the Company’s health plan membership, was awarded a 3.5-Star Rating. The Company retained a 4.0-Star or higher rating in each of its six other eligible plans, including three plans that achieved a 4.5-Star Rating, for the 2027 rating year. The rating year 2027 Stars results are not expected to impact our revenue for fiscal years 2026 or 2027. The change in Star Ratings performance for rating year 2027 will impact our quality bonus payments for fiscal year 2028.
We may not be able to maintain or improve upon the Star ratings of our health plans in future years. Failure to maintain satisfactory quality and performance measures may negatively affect our premium rates, impede our ability to compete for new business in existing or new markets or result in the termination of our contracts, or affect our ability to enter into new CMS contracts or expand the service area of current health plans. Star ratings are an important component of how MA beneficiaries select an MA plan, both during each annual enrollment period and throughout each year. Low Star ratings may reduce our membership or result in lower membership growth rates, if members choose to enroll in higher-rated plans.
Various factors may make it difficult for us to maintain or increase our Star ratings. For example, there are numerous providers that serve our plans, and we engage multiple third-party vendors to provide supplemental plan benefits. We may have limited success in obtaining quality health care outcomes and satisfactory member experiences from these providers and vendors. As a result of our dependence upon these relationships, we may have limited ability to directly influence the overall quality rating of our plans. Additionally, our higher concentration of minority members and members residing in socioeconomically disadvantaged neighborhoods generally may make it more difficult for us to achieve and maintain high Star ratings as compared to our competitors, given the well-documented health disparities among different minority and socioeconomic groups. CMS has attempted to address some of this disparity, but the efforts may not work as intended or be sufficient to address the difficulties of serving varying member populations. More recently, based on our review of the data provided by CMS, the decline in Stars performance for H3815 for rating year 2027 was driven primarily by higher industry cut points and a decline in certain triple-weighted measures across Health Outcomes Survey (HOS) and Part D. We have
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and will continue to implement enterprise-wide initiatives, including to enhance member and provider engagement, expand care gap closure programs and provide additional quality oversight. We believe these actions will strengthen our business and position H3815 to return to at least a 4.0-Star rating in future rating years. However, there can be no assurance that these initiatives will be successful or that H3815 will return to a 4.0-Star or higher rating in future rating years.
The Star Ratings program and the methodologies used to calculate Star Ratings are subject to change and uncertainty, including as a result of CMS actions, litigation and other legal and regulatory developments. For example, in May 2026, a federal district court ruled in favor of Clover Health in litigation challenging CMS’s use of certain measures in calculating its 2026 Star Rating and ordered CMS to recalculate Clover Health’s rating without the challenged measures. In response, CMS issued a memorandum announcing that it would voluntarily recalculate the 2027 quality bonus payment ratings for certain Medicare Advantage contracts and increase ratings where the recalculation resulted in a higher rating. CMS has appealed the district court’s decision. These developments, as well as other pending challenges to CMS’s Star Ratings methodologies, create substantial uncertainty regarding the measures and methodologies CMS may use to calculate Star Ratings in future years.
Additionally, CMS continues to make changes to Star Ratings methodology that could negatively impact our Star Ratings in future years. For example, for the 2027 Star Ratings, CMS determined not to implement the Excellent Health Outcomes for All reward, previously known as the Health Equity Index reward, and instead continued the historical reward factor. The elimination of this reward reduced the impact of investments that we made to align with CMS’s objectives under its prior implementation. Future adjustments to, or legal challenges involving, the Star rating methodology may have a negative impact on our Star ratings.
In addition, audits of our performance for past or future periods may result in downgrades to our Star ratings. For example, if a CMS audit finds that a particular issue of noncompliance impacts the data source for a Star measure, the Star measure may be reduced if the data set is deemed inaccurate or biased.
As a result of the foregoing, our plans may receive a lower Star rating and may not be eligible for full level quality bonus payments, which could adversely affect the benefits we can offer, reduce membership and/or reduce profit margins. Also, CMS has the authority to terminate contracts that have had a rating of less than three Stars for three consecutive years, whereas Medicare Advantage plans with five Stars are permitted to conduct enrollment throughout almost the entire year. Because low quality ratings can potentially lead to the termination of one or more of our contracts, we may not be able to prevent the potential termination of a plan or a shift of members to other plans based upon quality issues, which could, in turn, have a material adverse effect on our business, results of operations, financial condition and cash flows.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Unregistered Sales of Equity Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Rule 10b5-1 Plans
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During the fiscal quarter ended September 30, 2026, no executive officers or directors adopted terminated
Item 6. Exhibits.
Exhibit Number | Description | |||||||
| 3.1 | ||||||||
| 3.2 | ||||||||
| 3.3 | ||||||||
| 4.1 | ||||||||
| 31.1* | ||||||||
| 31.2* | ||||||||
| 32.1** | ||||||||
| 32.2** | ||||||||
| 101.INS* | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. | |||||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
_________________________
*Filed herewith.
**Furnished herewith
+Indicates management contract or compensatory plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Alignment Healthcare, Inc. | ||||||||
Date: October 29, 2026 | By: | /s/ John Kao | ||||||
| John Kao | ||||||||
| Chief Executive Officer | ||||||||
Date: October 29, 2026 | By: | /s/ James M. Head | ||||||
James M. Head | ||||||||
| Chief Financial Officer | ||||||||
44
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John Kao, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Alignment Healthcare, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: October 29, 2026 | By: | /s/ John Kao | ||||||
| John Kao | ||||||||
| Chief Executive Officer | ||||||||
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, James M. Head, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Alignment Healthcare, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: October 29, 2026 | By: | /s/ James M. Head | ||||||
| James M. Head | ||||||||
| Chief Financial Officer | ||||||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Alignment Healthcare, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Kao, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: October 29, 2026 | By: | /s/ John Kao | ||||||
| John Kao | ||||||||
| Chief Executive Officer | ||||||||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Alignment Healthcare, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James M. Head, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: October 29, 2026 | By: | /s/ James M. Head | ||||||
| James M. Head | ||||||||
| Chief Financial Officer | ||||||||