By Brazil Stock Guide – Hapvida (B3: HAPV3), Brazil’s largest health insurance operator, swung to a net loss of R$29.1 million in the fourth quarter of 2025, compared with a profit of R$167.8 million a year earlier, underscoring the company’s ongoing difficulty in translating revenue growth into a sustained recovery in profitability.
Net revenue rose 5.9% year over year to R$7.91 billion, but the cash medical loss ratio climbed to 75.5%, up 4.5 percentage points, while adjusted EBITDA margin fell to 9.0% from 14.2%.
The performance reflects a combination of higher utilization, elevated medical costs and the impact of expanding its own healthcare network. Cash medical expenses totaled R$5.97 billion in the quarter, up 12.6% from 4Q24, while total cost of services rose 26% to R$6.23 billion. The company said the ramp-up of new assets and less favorable seasonality weighed on costs during the period.
On the commercial side, pricing offered some support, but not enough to offset operational pressure. The consolidated average ticket increased 6.6% over 12 months to R$301.4, driven mainly by price adjustments, but the health plan beneficiary base declined by 140,000 in the quarter to 8.73 million. Losses were more concentrated in the Southeast and South regions, amid a more competitive environment.
Even adjusted figures point to underlying weakness. Adjusted EBITDA came in at R$713.8 million, but would have been R$555.9 million excluding non-recurring items. Adjusted net income of R$180.6 million would fall to R$76.4 million without one-off effects, suggesting that operational improvement remains fragile.
Pressure is also evident in cash flow. The company consumed R$1.63 billion in the quarter, ending December with R$8.18 billion, down from R$9.81 billion in the previous quarter. Free cash flow was negative at R$232.9 million, affected by capital expenditures, contingencies and debt service, which totaled R$1.20 billion. Net leverage rose to 1.32 times EBITDA, from 1.00 time a year earlier.
Still, Hapvida highlighted operational improvements, including a significant reduction in regulatory complaints (NIPs), better care quality indicators and expansion of its own network to 832 units, with the addition of hospital beds and outpatient facilities throughout 2025. The strategy remains focused on vertical integration and efficiency gains, even if these benefits have yet to fully materialize in reported results.
For 2026, management signaled continued operational adjustments and a focus on execution, in an environment still marked by cost pressures and intensifying competition. For now, the recovery trajectory appears gradual — and dependent on a clearer improvement in the medical loss ratio.