Craig Jones
BofA Securities, Research Division

[Audio Gap] Bank of America. I have the pleasure of hosting John Kao, CEO of Alignment Healthcare; and CFO, Jim Head. So [ do you want to join ] a quick intro? Do you want to go straight to Q&A? How do you want to handle that?

James Head
Chief Financial Officer

I'll just do Q&A.

Craig Jones
BofA Securities, Research Division

Q&A. All right. Sounds great. So why don't we start with the guide, maybe 2Q. So can you just clear up something for us. So can you explain sort of why the step down in MBR between 1Q and 2Q, sort of what happens in a typical year to drive that improvement? And then maybe what about this year? The seasonality is different versus 2025.

James Head
Chief Financial Officer

Okay. I'll take that one. So let's start with the Q2 guide in the first half. So we came out with a very strong first quarter, as you know. Q2, we also predicted a pretty strong improvement for the first half year-over-year, 60 basis points MBR improvement, 40 basis points SG&A and then almost 100 basis points in adjusted EBITDA. So very strong performance, 80% growth year-over-year. Now what Craig is asking about is there's a step down in the MBR between Q1 and Q2. And that is typical, okay? We have a step down. There's 2 reasons why there's an annual step down. Number one, utilization is just different in Q2 versus Q1. So you're going to see that seasonality. Number two, Part D influences that step down quite a bit. What folks are looking at right now is