Alignment Healthcare lifts revenue outlook but cuts profit guidance as medical costs bite

The Medicare Advantage insurer beat on third-quarter revenue at $1.36B against $1.34B expected, yet the lower gross profit and EBITDA floors say growth is not reaching earnings.

Alignment Healthcare is selling more than it planned and keeping less of it. The company raised its full-year 2026 revenue guidance to no less than $5,245 million, then cut its adjusted gross profit floor to no less than $575 million and its adjusted EBITDA floor to no less than $100 million.

Third-quarter revenue of $1.36B beat the $1.34B analysts expected, and the loss of $0.04 a share on a GAAP basis was in line. Membership guidance went up too: the company now expects at least 305,000 members in the fourth quarter, matching its full-year target. More members are arriving, but each is costing more to care for than management budgeted.

John Kao, chairman and chief executive, put the blame on medical trends that ran higher than expected in the quarter. That is the line to weigh. For an insurer, revenue is the easy part of the beat; the margin left after claims is what counts, and it is the figure that moved the wrong way.

The fourth-quarter outlook, at no less than $1,316 million of revenue, is described as more prudent and assumes no benefit from corrective actions already under way. That cuts both ways. If the actions work, the guidance has room to be beaten. If they do not, the cost problem is the base case rather than a risk. Either way, a raised top line paired with lowered profit floors tells shareholders that growth is not the issue. The next quarterly report should show whether the cost trend is easing.