NeueHealth Reports $215.8 Million Revenue in Q1 2025, Operating Income Improves

NeueHealth, Inc. reported a total revenue of $215.8 million for the first quarter of 2025, a decrease of 12% compared to $245.1 million in the same period of 2024. The decline was primarily driven by a significant drop in ACO REACH revenue, which fell to $124.0 million from $171.8 million year-over-year, attributed to a reduction of approximately 13,000 beneficiaries aligned to the ACOs. In contrast, capitated revenue increased by 31.8% to $81.0 million, reflecting growth in membership through third-party payor contracts. Despite the revenue decline, the company achieved an operating income of $2.7 million, a notable improvement from an operating loss of $23.1 million in the prior year.

The company’s operating expenses also decreased significantly, totaling $213.1 million for the quarter, down from $268.2 million in the previous year. This reduction was largely due to a decrease in medical costs, which fell to $160.9 million from $196.9 million, and a reduction in operating costs, which dropped to $48.7 million from $66.8 million. The decrease in operating costs was primarily driven by lower compensation expenses resulting from workforce reductions. However, interest expenses rose to $6.6 million from $2.9 million, reflecting the impact of paid-in-kind interest on the company’s debt obligations.

Strategically, NeueHealth has been focusing on expanding its consumer base and enhancing its service offerings. As of March 31, 2025, the company served approximately 571,000 value-based care consumers, a significant increase from 360,000 a year earlier. The company also reported approximately 138,000 enablement services lives attributed to provider partner groups outside its owned network. These metrics indicate a strong growth trajectory in its core business segments, NeueCare and NeueSolutions, which are designed to improve care coordination and consumer access to healthcare services.

Looking ahead, NeueHealth faces challenges related to liquidity and compliance with regulatory capital requirements. The company has indicated that its existing cash and investments may not be sufficient to meet anticipated cash requirements over the next twelve months. Management is actively pursuing strategies to enhance cash flow and access additional liquidity, including potential collections from the sale of its California Medicare Advantage business. The company is also navigating the complexities of its ongoing NEA Merger Agreement, which, if completed, will result in the company becoming a wholly owned subsidiary of NH Holdings 2025, Inc. The completion of this merger is subject to various conditions, including regulatory approvals and stockholder consent.