Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q2 | |
Trading Symbol | EHTH | |
Entity Registrant Name | eHealth, Inc. | |
Entity Central Index Key | 1,333,493 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 19,175,834 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 30,774 | $ 40,293 |
Accounts receivable | 846 | 1,475 |
Commissions receivable - current | 88,246 | 109,666 |
Prepaid expenses and other current assets | 5,441 | 4,305 |
Total current assets | 125,307 | 155,739 |
Commissions receivable - non-current | 179,150 | 169,751 |
Property and equipment, net | 4,640 | 4,705 |
Other assets | 9,035 | 7,287 |
Intangible assets, net | 13,342 | 7,540 |
Goodwill | 40,233 | 14,096 |
Total assets | 371,707 | 359,118 |
Current liabilities: | ||
Accounts payable | 2,154 | 3,246 |
Accrued compensation and benefits | 12,032 | 15,498 |
Accrued marketing expenses | 2,742 | 4,693 |
Earnout liability - current | 15,766 | 0 |
Other current liabilities | 3,523 | 2,008 |
Total current liabilities | 36,217 | 25,445 |
Earnout liability - non-current | 14,434 | 0 |
Deferred income taxes - non-current | 38,607 | 45,089 |
Other non-current liabilities | 2,197 | 1,920 |
Stockholders’ equity: | ||
Common stock | 30 | 30 |
Additional paid-in capital | 292,159 | 281,706 |
Treasury stock, at cost | (199,998) | (199,998) |
Retained earnings | 187,866 | 204,725 |
Accumulated other comprehensive income | 195 | 201 |
Total stockholders’ equity | 280,252 | 286,664 |
Total liabilities and stockholders’ equity | $ 371,707 | $ 359,118 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue | ||||
Commission | $ 30,646 | $ 32,451 | $ 71,353 | $ 71,288 |
Other | 2,011 | 2,115 | 4,374 | 4,834 |
Total revenue | 32,657 | 34,566 | 75,727 | 76,122 |
Operating costs and expenses: | ||||
Cost of revenue | 151 | 56 | 303 | 237 |
Marketing and advertising | 14,606 | 14,240 | 29,608 | 29,295 |
Customer care and enrollment | 13,219 | 12,012 | 26,458 | 24,121 |
Technology and content | 7,287 | 7,932 | 15,628 | 16,004 |
General and administrative | 11,240 | 10,534 | 21,931 | 20,526 |
Change in fair value of earnout liability | 2,500 | 0 | 2,500 | 0 |
Restructuring charges | 9 | 0 | 1,865 | 0 |
Acquisition costs | 18 | 0 | 76 | 0 |
Amortization of intangible assets | 547 | 260 | 998 | 520 |
Total operating costs and expenses | 49,577 | 45,034 | 99,367 | 90,703 |
Loss from operations | (16,920) | (10,468) | (23,640) | (14,581) |
Other income (expense), net | 296 | 298 | 480 | 575 |
Loss before benefit from income taxes | (16,624) | (10,170) | (23,160) | (14,006) |
Benefit from income taxes | (4,610) | (8,664) | (6,301) | (13,580) |
Net loss | $ (12,014) | $ (1,506) | $ (16,859) | $ (426) |
Net loss per share: | ||||
Basic (in usd per share) | $ (0.63) | $ (0.08) | $ (0.89) | $ (0.02) |
Diluted (in usd per share) | $ (0.63) | $ (0.08) | $ (0.89) | $ (0.02) |
Weighted-average number of shares used in per share amounts: | ||||
Basic (in shares) | 19,063 | 18,481 | 18,968 | 18,424 |
Diluted (in shares) | 19,063 | 18,481 | 18,968 | 18,424 |
Comprehensive loss | ||||
Foreign currency translation adjustment, net of taxes | $ (71) | $ 10 | $ (6) | $ 18 |
Comprehensive loss | $ (12,085) | $ (1,496) | $ (16,865) | $ (408) |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Operating activities | ||
Net loss | $ (16,859) | $ (426) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Deferred income taxes | (6,482) | (12,131) |
Depreciation and amortization | 1,250 | 1,513 |
Amortization of internally developed software | 1,011 | 651 |
Amortization of intangible assets | 998 | 520 |
Stock-based compensation expense | 5,932 | 4,702 |
Change in fair value of earnout liability | 2,500 | 0 |
Other non-cash items | 376 | (52) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 629 | 1,386 |
Commissions receivable | 27,495 | 20,145 |
Prepaid expenses and other assets | (1,120) | (88) |
Accounts payable | (1,202) | (2,798) |
Accrued compensation and benefits | (3,598) | (799) |
Accrued marketing expenses | (1,951) | (2,771) |
Deferred revenue | 376 | (490) |
Accrued expense and other liabilities | 1,081 | (1,902) |
Net cash provided by operating activities | 10,436 | 7,460 |
Investing activities | ||
Capitalized internal-use software and website development costs | (2,763) | (1,665) |
Purchases of property and equipment and other assets | (1,122) | (1,105) |
Acquisition of business, net of cash acquired | (14,929) | 0 |
Net cash used in investing activities | (18,814) | (2,770) |
Financing activities | ||
Proceeds from exercise of common stock options | 668 | 49 |
Cash used to net-share settle equity awards | (1,742) | (396) |
Principal payments in connection with capital leases | (52) | (62) |
Net cash used in financing activities | (1,126) | (409) |
Effect of exchange rate changes on cash and cash equivalents | (15) | 18 |
Net increase (decrease) in cash and cash equivalents | (9,519) | 4,299 |
Cash and cash equivalents at beginning of period | 40,293 | 61,781 |
Cash and cash equivalents at end of period | $ 30,774 | $ 66,080 |
Summary of Business and Signifi
Summary of Business and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Business and Significant Accounting Policies | Summary of Business and Significant Accounting Policies Description of Business — eHealth, Inc. (the “Company,” “eHealth,” “we” or “us”) is a leading private health insurance exchange for individuals, families and small businesses in the United States. Through our website addresses ( www.eHealth.com , www.eHealthInsurance.com , www.eHealthMedicare.com, www.Medicare.com, www.PlanPrescriber.com and www.GoMedigap.com) , consumers can get quotes from leading health insurance carriers, compare plans side-by-side, and apply for and purchase Medicare-related, individual and family, small business and ancillary health insurance plans. We actively market the availability of Medicare-related insurance plans and offer Medicare plan comparison tools and educational materials for Medicare-related insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans. Our ecommerce technology also enables us to deliver consumers’ health insurance applications electronically to health insurance carriers. We are licensed to market and sell health insurance in all 50 states and the District of Columbia. Basis of Presentation — The accompanying condensed consolidated balance sheets as of December 31, 2017 and June 30, 2018 , the condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2017 and 2018 and the condensed consolidated statements of cash flows for the six months ended June 30, 2017 and 2018 , respectively, are unaudited. Effective January 1, 2018, we adopted the requirements of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) , as discussed in detail below under Adoption of New Accounting Standards . All amounts and disclosures set forth in this Quarterly Report on Form 10-Q have been updated to comply with Topic 606. Except for the impact of the adoption of Topic 606, the condensed consolidated balance sheet data as of December 31, 2017 was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the Securities and Exchange Commission on March 19, 2018. The accompanying statements should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance to such rules and regulations. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017 and include all adjustments necessary for the fair presentation of our financial position as of December 31, 2017 and June 30, 2018 , our results of operations for the three and six months ended June 30, 2017 and 2018 and our cash flows for the six months ended June 30, 2017 and 2018 . The results for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for any subsequent period or for the fiscal year ending December 31, 2018 and therefore should not be relied upon as an indicator of future results. Principles of Consolidation — The condensed consolidated financial statements include the accounts of eHealth, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Seasonality — A greater number of our Medicare-related health insurance plans are sold in our fourth quarter during the Medicare annual enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage and Medicare Part D prescription drug coverage for the following year. As a result, our Medicare plan-related commission revenue is highest in our fourth quarter. The majority of our individual and family health insurance plans are sold in the fourth quarter during the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state. Recent Accounting Pronouncements Not Yet Adopted Leases (Topic 842) — In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as a finance or operating lease. The guidance also eliminates existing real estate-specific provisions for all entities. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We expect to adopt this new accounting standard in the first quarter of 2019. While we are currently evaluating the impact of adopting ASU 2016-02, based on the lease portfolio as of June 30, 2018 , we anticipate recording lease assets and liabilities of approximately $31.7 million on its Condensed Balance Sheets, with no material impact to its condensed consolidated statements of comprehensive loss. However, the ultimate impact of adopting ASU 2016-02 will depend on our lease portfolio as of the adoption date. Adoption of New Accounting Standards Compensation — Stock Compensation (Topic 718) — In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. We adopted ASU 2017-09 in the first quarter of 2018. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements. Statement of Cash Flows (Topic 230) — In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows. Under ASU 2016-18, changes in restricted cash and restricted cash equivalents would be included along with those of cash and cash equivalents in the statement of cash flows. As a result, entities would no longer present transfers between cash/equivalents and restricted cash/equivalents in the statement of cash flows. In addition, a reconciliation between the balance sheet and the statement of cash flows would be disclosed when the balance sheet includes more than one line item for cash/equivalents and restricted cash/equivalents. We adopted ASU 2016-18 in the first quarter of 2018. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 provides guidance on how certain cash receipts and cash payments are presented on the statement of cash flows. We adopted ASU 2016-15 in the first quarter of 2018. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements. Goodwill Impairment (Topic 350) — In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350) . Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. ASU 2017-04 eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. ASU 2017-04 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 with early adoption permitted for annual goodwill impairment tests performed after January 1, 2017. The standard must be applied prospectively. We early adopted ASU 2017-04 in the first quarter of 2018. The adoption of this new standard has not materially impacted our condensed consolidated financial statements. Revenue Recognition (Topic 606) — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing . ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for ASU 2016-10 are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). ASU 2014-09 may be adopted retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We adopted ASC 2014-09 effective January 1, 2018, using the full retrospective method to restate each prior reporting period presented. The adoption of this standard had a material impact on our condensed consolidated balance sheets and condensed consolidated statements of comprehensive loss, but had no impact on total net cash provided by (used in) operating, investing, or financing activities within the condensed consolidated statements of cash flows. Change in Significant Accounting Policies Except for the accounting policies for revenue recognition, commissions receivable and deferred revenue that were updated as a result of adopting Topic 606, there have been no changes to our significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 19, 2018, that have had a material impact on our condensed consolidated financial statements and related notes. Revenue Recognition Policy We are compensated by the receipt of commission payments from health insurance carriers whose health insurance policies are purchased through our ecommerce platforms or our customer care centers. We may also receive commission bonuses based on our attaining predetermined target sales levels for Medicare, individual and family, small business and ancillary health insurance products, or other objectives, as determined by the health insurance carrier, which we recognize as commission revenue when we achieve the predetermined target sales levels or other objectives. In addition, we also generate revenue from non-commission revenue sources, which include online sponsorship and advertising, technology licensing and lead referrals. The core principle of Topic 606 is to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Accordingly, we recognize revenue for our services in accordance with the following five steps outlined in Topic 606: • Identification of the contract, or contracts, with a customer. A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. • Identification of the performance obligations in the contract. Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. • Determination of the transaction price. The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. • Allocation of the transaction price to the performance obligations in the contract. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis. • Recognition of revenue when, or as, we satisfy a performance obligation. We satisfy performance obligations either over time or at a point in time, as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised good or service to the customer. Commission Revenue — Our commission revenue is primarily comprised of commissions paid to us by health insurance carriers related to insurance plans that have been purchased by a member through our health insurance exchange service. We define a member as an individual currently covered by an insurance plan, which include Medicare-related, individual and family, small business and ancillary plans. We are compensated by the health insurance carrier, which we define as our customer. We typically enter into contractual relationships with health insurance carriers that are non-exclusive and terminable on short notice by either party for any reason. In addition, health insurance carriers often have the ability to terminate or amend our agreements unilaterally on short notice, including provisions in our agreements relating to the commission rates paid to us by the health insurance carriers. The amendment or termination of an agreement we have with a health insurance carrier may adversely impact the commissions we are paid on health insurance plans purchased from the carrier by means of our health insurance exchange services. For both Medicare Advantage and Medicare Part D prescription drug plans, we receive a fixed, annual commission payment from insurance carriers once the plan is approved by the carrier and either a fixed, monthly or annual commission payment beginning with and subsequent to the second plan year. In the first plan year of a Medicare Advantage and Medicare Part D prescription drug plan, after the health insurance carrier approves the application but during the effective year of the plan, we are paid a fixed commission that is prorated for the number of months remaining in the calendar year. Additionally, if the plan is the first Medicare Advantage or Medicare Part D plan issued to the member, we may receive a higher commission rate that covers a full twelve-month period, regardless of the month the plan was effective. We earn commission revenue for Medicare Advantage and Medicare Part D prescription drug plans for which we are the broker of record, typically until either the policy is cancelled or we otherwise do not remain the agent on the policy. For individual and family, Medicare Supplement, small business and ancillary plans, our commissions generally represent a flat amount per member per month or a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan. Premium-based commissions are reported to us after the premiums are collected by the carrier, generally on a monthly basis. We generally continue to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or we otherwise do not remain the agent on the policy. We utilize a practical expedient to estimate commission revenue for each insurance product by applying the use of a portfolio approach to group approved members by the effective month of the relevant policy (referred to as a “cohort”). This allows us to estimate the commissions we expect to collect for each approved member cohort by evaluating various factors, including but not limited to, contracted commission rates, carrier mix and expected member churn. For Medicare-related, individual and family and ancillary health insurance plans, our services are complete once a submitted application is approved by the relevant health insurance carrier. Accordingly, we recognize commission revenue based upon the total estimated lifetime commissions we expect to receive for selling the plan after the carrier approves an application, net of a constraint. We refer to these estimated and constrained lifetime values as the "constrained lifetime value" for the plan. We provide annual services in selling and renewing small business health insurance plans; therefore, we recognize small business health insurance plan commission revenue at the time the plan is approved by the carrier, and when it renews each year thereafter, equal to the estimated commissions we expect to collect from the plan over the following 12-months. Our estimate of commission revenue for each product line is based on a number of assumptions, which include, but are not limited to, estimating conversion of an approved member to a paying member, forecasting member churn and forecasting the commission amounts likely to be received per member. These assumptions are based on historical trends and incorporate management’s judgment in interpreting those trends and in applying constraints discussed below. To the extent we make changes to the assumptions, we will recognize any material impact of the changes to commission revenue in the reporting period in which the change is made, including revisions of estimated lifetime commissions either below or in excess of previously estimated constrained lifetime value recognized as revenue. For Medicare-related, individual and family and ancillary health insurance plans, we apply constraints to determine the amount of commission revenue to recognize per approved member. The constraints are applied to help ensure that the total estimated lifetime commissions expected to be collected for an approved member’s plan are recognized as revenue only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with future commissions receivable from the plan is subsequently resolved. We evaluate the appropriateness of these constraints on at least an annual basis, including assessing factors affecting our estimate of the estimated lifetime value of commissions per approved member based on current trends impacting our business and assessing whether any adjustment to those constraints should be made. We update the assumptions when we observe a sufficient level of evidence that would suggest that the long term expectation of the assumption has changed. For the three months ended June 30, 2017 and 2018 , the constraints applied to the total estimated lifetime commissions we expect to receive for selling the plan after the carrier approves an application in order to derive the constrained lifetime value of commissions per approved member are as follows: Three Months Ended June 30, 2017 2018 Medicare Medicare Advantage 7 % 7 % Medicare Supplement 5 % 5 % Medicare Part D 5 % 5 % Individual and Family Non-Qualified Health Plans 15 % 15 % Qualified Health Plans 20 % 20 % Ancillary 10 % 10 % Small Business — — Other Revenue — Our sponsorship and advertising program allows carriers to purchase advertising space in specific markets in a sponsorship area on our website. In return, we are typically paid a monthly fee, which is recognized over the period that advertising is displayed. Such revenue often includes a performance fee component based on metrics such as submitted health insurance applications and is recognized when the performance obligations are fulfilled and control has been transferred. We also offer Medicare advertising services, which include website development, hosting and maintenance. In these instances, we are typically paid a fixed, up-front fee, which we recognize as revenue over the service period as the performance obligations are satisfied. Our commercial technology licensing business allows carriers the use of our ecommerce platform to offer their own health insurance policies on their websites and allows agents to utilize our technology to power their online quoting, content and application submission processes. Typically, we are paid a one-time implementation fee, which we recognize upon transfer of control at a point in time, commencing once the technology is available for use by the third party. Variable consideration in the form of performance fees based on metrics such as submitted health insurance applications are recognized upon achieving the metrics. The metrics used to calculate performance fees for both sponsorship and advertising and technology licensing are based on performance criteria that are either measured based on data tracked by us, or data tracked by the third party. Deferred revenue includes deferred technology licensing implementation fees and amounts billed or collected from sponsorship or technology licensing customers in advance of our performing our service for such customers. It also includes the amount by which both unbilled and billed services provided under our technology licensing arrangements exceed the straight-line revenue recognized to date. Some of our contracts with customers contain multiple performance obligations. We allocate revenue to all performance obligations within an arrangement with multiple deliverables at the inception of the arrangement using the relative standalone selling price method. Disaggregation of Revenue The table below depicts the disaggregation of revenue by product for the three and six months ended June 30, 2017 and 2018 and is consistent with how we evaluate our financial performance: Three Months Ended Six Months Ended June 30, June 30, 2017 2018 2017 2018 Commission Revenue: Medicare Medicare Advantage $ 18,677 $ 17,738 $ 37,882 $ 39,673 Medicare Supplement 2,886 5,355 6,800 10,947 Medicare Part D 1,203 715 2,581 1,874 Total Medicare 22,766 23,808 47,263 52,494 Individual and Family (1) Non-Qualified Health Plans 1,988 1,069 5,761 2,510 Qualified Health Plans 2,634 1,675 5,766 3,837 Total Individual and Family 4,622 2,744 11,527 6,347 Ancillary Short-term 1,029 1,293 2,875 2,543 Dental 1,003 147 2,850 1,366 Vision 282 391 852 731 Other 762 (118 ) 1,527 2,653 Total Ancillary 3,076 1,713 8,104 7,293 Small Business 1,532 1,772 3,456 4,131 Commission Bonus 455 609 938 1,088 Total Commission Revenue 32,451 30,646 71,288 71,353 Other Revenue 2,115 2,011 4,834 4,374 Total Revenue $ 34,566 $ 32,657 $ 76,122 $ 75,727 (1) We define our Individual and Family Plan offerings as major medical individual and family health insurance plans, which does not include Medicare-related, small business or ancillary plans. Individual and family health insurance plans include both Qualified and Non-Qualified plans. Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are offered through the government-run health insurance exchange in the relevant jurisdiction. Non-Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are not offered through the exchange in the relevant jurisdiction. Individuals that purchase Non-Qualified health plans cannot receive a subsidy in connection with the purchase of Non-Qualified plans. Book-of-Business Transfers We entered into several agreements with a broker partner, whereby the partner transferred certain of its existing Medicare plan members to us as the broker of record on the underlying policies. The first of these book-of-business transfers occurred in November 2010 and the most recent in June 2012. Total consideration paid by us for these books-of-business amounted to $13.9 million . Consideration paid for these books-of-business is included within commissions receivable in the accompanying condensed consolidated balance sheets. The consideration we paid to the broker partner was based on the discounted commissions expected to be received over the remaining life of each transferred Medicare plan member. As we receive commission payments from health insurance carriers for these plan members, we reduce commissions receivable for the discounted commissions expected to be received, with the remaining margin earned recorded to other income (expense), net in the condensed consolidated statements of comprehensive income (loss). The margin earned and recorded to other income (expense), net for these books-of-business for the three and six months ended June 30, 2017 and 2018 totaled $0.5 million and $0.4 million , respectively. Incremental Costs to Obtain a Contract We reviewed our sales compensation plans, which are directed at converting leads into approved members, and concluded that they are fulfillment costs and not costs to obtain a contract with a health insurance carrier, which we define as our customer. Additionally, we reviewed compensation plans related to personnel responsible for identifying new health insurance carriers and entering into contracts with new health insurance carriers and concluded that no incremental costs are incurred to obtain such contracts. Income Taxes As described in more detail in Note 6 - Income Taxes , as a result of the adoption of Topic 606, we recorded a significant deferred tax liability on our recasted opening balance sheet related to the resulting accelerated revenue recognition under Topic 606. Additionally, as a result of the deferred tax liability, we re-evaluated the need for the valuation allowance recorded against our U.S. deferred tax assets. As a result of this evaluation, we determined that the deferred tax liability is a source of income that can be used to support realization of deferred tax assets on a more-likely-than-not level and accordingly reversed our previously recorded valuation allowance as of January 1, 2015, the earliest period to which the retrospective the adoption of Topic 606 was applied. Impact to Previously Reported Results The adoption of ASU 2014-09 impacted our reported results as follows (in thousands, except per share amounts): December 31, 2017 Balance Sheets As ASC 606 Adoption Adjustment As Accounts receivable $ 9,894 $ (8,419 ) $ 1,475 Commissions receivable - current $ — $ 109,666 $ 109,666 Prepaid expenses and other current assets $ 4,845 $ (540 ) $ 4,305 Commissions receivable - non-current $ — $ 169,751 $ 169,751 Other assets $ 7,317 $ (30 ) $ 7,287 Accrued marketing expenses $ 4,088 $ 605 $ 4,693 Other current liabilities $ 3,815 $ (1,807 ) $ 2,008 Deferred income taxes - non-current $ — $ 45,089 $ 45,089 Non-current liabilities $ 900 $ 1,020 $ 1,920 Retained earnings (accumulated deficit) $ (20,796 ) $ 225,521 $ 204,725 Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Statements of Operations As ASC 606 Adoption Adjustment As As ASC 606 Adoption Adjustment As Revenue $ 27,957 $ 6,609 $ 34,566 $ 106,896 $ (30,774 ) $ 76,122 Cost of revenue $ 204 $ (148 ) $ 56 $ 1,833 $ (1,596 ) $ 237 Other income, net $ 90 $ 208 $ 298 $ 116 $ 459 $ 575 Provision (benefit) from income taxes $ 125 $ (8,789 ) $ (8,664 ) $ (1,448 ) $ (12,132 ) $ (13,580 ) Net income (loss) $ (17,260 ) $ 15,754 $ (1,506 ) $ 16,161 $ (16,587 ) $ (426 ) Net income (loss) per diluted share $ (0.93 ) $ 0.85 $ (0.08 ) $ 0.86 $ (0.90 ) $ (0.02 ) Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Segment Information As ASC 606 Adoption Adjustment As As ASC 606 Adoption Adjustment As Revenue Medicare $ 11,014 $ 13,148 $ 24,162 $ 68,988 $ (19,416 ) $ 49,572 Individual, Family and Small Business 16,943 (6,539 ) 10,404 37,908 (11,358 ) 26,550 Total revenue $ 27,957 $ 6,609 $ 34,566 $ 106,896 $ (30,774 ) $ 76,122 Segment profit (loss) Medicare segment profit (loss) $ (15,107 ) $ 13,094 $ (2,013 ) $ 15,588 $ (18,530 ) $ (2,942 ) Individual, Family and Small Business segment profit 8,404 (6,339 ) 2,065 19,483 (10,648 ) 8,835 Total segment profit (loss) $ (6,703 ) $ 6,755 $ 52 $ 35,071 $ (29,178 ) $ 5,893 |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On January 22, 2018, we completed our acquisition of all outstanding membership interests of Wealth, Health and Life Advisors, LLC, more commonly known as GoMedigap, a technology-enabled provider of Medicare Supplement enrollment services. This acquisition is expected to enhance our growing presence in the Medicare Supplement market and put us in a stronger position with carriers and strategic partners. The acquisition consideration consisted of cash of $15.0 million , less $0.1 million of cash acquired, and 294,637 shares of our common stock. In addition, the members of GoMedigap are entitled to receive earnout payments ("Earnout Consideration") consisting of up to $20 million in cash and 589,275 shares of our common stock. The Earnout Consideration will become payable, subject to the terms and conditions of the purchase agreement relating to the acquisition, upon the final determination of the achievement of certain milestones in 2018 and 2019. The GoMedigap acquisition was accounted for using the acquisition method of accounting under ASC 805, Business Combinations. The acquisition method of accounting requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The major classes of assets and liabilities to which we have preliminarily allocated the acquisition consideration were as follows (in thousands): Acquisition Consideration Cash paid $ 15,000 Fair value of equity awards issued to GoMedigap members (1) 5,595 Estimated fair value of earnout liability 27,700 $ 48,295 Allocation Cash and cash equivalents $ 71 Commission receivable - current 4,371 Prepaid expenses and other current assets 11 Commission receivable - non-current 11,103 Property and equipment, net 174 Accounts payable (110 ) Accrued compensation and benefits (132 ) Other current liabilities (131 ) Net tangible assets acquired 15,357 Intangible assets 6,800 Goodwill 26,138 Total intangible assets acquired 32,938 Total net assets acquired $ 48,295 (1) The fair value of equity awards issued was determined based on the January 22, 2018 closing price of our common stock of $18.99 . The acquisition consideration allocation as of the date of the acquisition was based on a preliminary valuation and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available. Additional information that result in adjustments to the provisional current and non-current commissions receivable amounts recognized as of the acquisition date may result in a corresponding adjustment to goodwill in the period in which new information becomes available. Goodwill and Intangible Assets — Goodwill represents the excess of the purchase price of the acquired business over the acquisition date fair value of the net assets acquired. Goodwill is primarily attributable to the assembled workforce, new product development capabilities and anticipated synergies and economies of scale expected from the operations of the combined company. The goodwill was assigned to our Medicare segment. Goodwill is tested for impairment on an annual basis in the fourth quarter of each year or whenever events or changes in circumstances indicate that the asset may be impaired. Factors that we consider in deciding when to perform an impairment test include significant negative industry or economic trends or significant changes or planned changes in our use of the intangible assets. Goodwill will be deductible for tax purposes over 15 years . Earnout liability — The earnout liability represents the fair value of the Earnout Consideration payable and will be adjusted to fair value at each reporting date until settled. Changes in fair value will be recognized in income (loss) from operations. The earnout liability will be adjusted to the extent the specified enrollment targets are not achieved. Fair Value Measurements — The assets acquired and liabilities assumed of GoMedigap have been recognized at fair value in accordance with ASC 820, Fair Value Measurement. ASC 820 defines fair value as the price that would be received to sell an asset or would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires three levels of hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy level assigned to each asset and liability is based on the assessment of the transparency and reliability of inputs used in the valuation of such items based on the lowest level of input that is significant to fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements). Assets acquired and liabilities assumed measured and reported at fair value are classified in one of the following categories based on inputs: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities; or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability. Level 3 Unobservable inputs for the asset or liability. The fair value of prepaid expenses and other current assets, property and equipment, net, accounts payable, accrued compensation and benefits and other current liabilities approximated their carrying value at the date of acquisition. The fair value of commissions receivable was determined using a discount rate of interest, which is a Level 2 input. Intangible assets and the earnout liability were valued using Level 3 inputs. The fair values of the acquired intangible assets were determined using the profit allocation method, which is based on determining the estimated royalties we are relieved from paying because we own the assets. The fair value of the earnout liability was measured using probability-weighted analysis and is discounted using a rate that appropriately captures the risk associated with the obligation. Key assumptions included new enrollments and volatility for the years ending December 31, 2018 and 2019 and eHealth’s simulated stock price at the time of payment. The earnout liability was part of the acquisition consideration and will be adjusted to fair value at each reporting date until settled. The fair value adjustments to the earnout liability during both the three and six months ended June 30, 2018 totaled $2.5 million . We will continue to update the key assumptions each period and record any fair value adjustments, as necessary. Following are the details of the acquisition consideration allocated to the intangible assets acquired (in thousands): Technology $ 2,000 Trade names, trademarks and website addresses 4,800 Total intangible assets $ 6,800 We are amortizing the existing technology and trade name using the straight-line method over an estimated life of 3 and 10 years, respectively. The estimated useful lives are based on the time periods during which the intangibles are expected to result in incremental cash flows. We incurred $0.1 million of acquisition-related costs during the six months ended June 30, 2018 , which were expensed as incurred. |
Balance Sheet Accounts
Balance Sheet Accounts | 6 Months Ended |
Jun. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Accounts | Balance Sheet Accounts Cash and Cash Equivalents — As of December 31, 2017 and June 30, 2018 , our cash equivalents consisted of money market accounts that invested in U.S. government-sponsored enterprise bonds and discount notes, U.S. government treasury bills and notes and repurchase agreements collateralized by U.S. government obligations. As of December 31, 2017 and June 30, 2018 , our cash equivalents carried no unrealized gains or losses and we did not realize any significant gains or losses on sales of cash equivalents during the three or six months ended June 30, 2017 and 2018. As of December 31, 2017 and June 30, 2018 , our cash and cash equivalent balances were invested as follows (in thousands): December 31, 2017 June 30, 2018 Cash $ 5,098 $ 7,396 Money market funds 35,195 23,378 Total cash and cash equivalents $ 40,293 $ 30,774 Prepaid Expenses and Other Current Assets — Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2017 June 30, 2018 Prepaid maintenance contracts $ 1,945 $ 1,849 Prepaid insurance 490 1,169 Prepaid rent 311 508 Other current assets 1,559 1,915 Total prepaid expenses and other current assets $ 4,305 $ 5,441 Intangible Assets — The carrying amounts, accumulated amortization, net carrying value and weighted average remaining life of our definite-lived amortizable intangible assets, as well as our indefinite-lived intangible trademarks, are presented in the tables below for (dollars in thousands, weighted-average remaining life in years): December 31, 2017 June 30, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life Technology $ 1,700 $ (1,700 ) $ — $ 3,700 $ (1,978 ) $ 1,722 2.6 years Pharmacy and customer relationships 10,100 (7,884 ) 2,216 10,100 (8,358 ) 1,742 1.8 years Trade names, trademarks and website addresses 907 (697 ) 210 5,707 (943 ) 4,764 9.3 years Total intangible assets subject to amortization $ 12,707 $ (10,281 ) 2,426 $ 19,507 $ (11,279 ) 8,228 Indefinite-lived trademarks and domain names 5,114 5,114 Indefinite Total intangible assets $ 7,540 $ 13,342 As of June 30, 2018 , expected amortization expense in future periods is as follows (in thousands): Years Ending December 31, Technology Pharmacy and Customer Relationships Trade Names, Trademarks and Website Addresses Total 2018 $ 333 $ 475 $ 284 $ 1,092 2019 667 950 570 2,187 2020 667 317 510 1,494 2021 55 — 480 535 2022 — — 480 480 Thereafter — — 2,440 2,440 Total $ 1,722 $ 1,742 $ 4,764 $ 8,228 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We define fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques we use to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We classify the inputs used to measure fair value into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities; unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability. Level 3 Unobservable inputs for the asset or liability. The following table is a summary of financial assets measured at fair value on a recurring basis and their classification within the fair value hierarchy (in thousands). December 31, 2017 June 30, 2018 Carrying Value Level 1 Total Carrying Value Level 1 Level 3 Total Assets Money market funds $ 35,195 $ 35,195 $ 35,195 $ 23,378 $ 23,378 $ — $ 23,378 Total assets measured and recorded at fair value $ 35,195 $ 35,195 $ 35,195 $ 23,378 $ 23,378 $ — $ 23,378 Liability Earnout liability - current $ — $ — $ — $ 15,766 $ — $ 15,766 $ 15,766 Earnout liability - non-current — — — 14,434 — 14,434 14,434 Total liabilities measured and recorded at fair value $ — $ — $ — $ 30,200 $ — $ 30,200 $ 30,200 Our cash equivalents were invested in money market funds and were classified as Level 1. We endeavor to utilize the best available information in measuring fair value. We used observable prices in active markets in determining the classification of our money market funds as Level 1. The earnout liability represents the fair value of the Earnout Consideration payable to acquire GoMedigap and will be adjusted to fair value at each reporting date until settled. See Note 2 - Acquisition for additional information on the earnout consideration. We measure the earnout liability using internally developed assumptions, therefore it is classified as Level 3. The fair value of the earnout liability was measured using probability-weighted analysis and is discounted using a rate that appropriately captures the risk associated with the obligation. Key assumptions included new enrollments and volatility for the years ending December 31, 2018 and 2019 and our simulated stock price at the time of payment. |
Stockholder's Equity
Stockholder's Equity | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholder's Equity | Stockholder's Equity 2014 Equity Incentive Plan — The following table summarizes activity under our 2014 Equity Incentive Plan (the “2014 Plan”) for the six months ended June 30, 2018 (in thousands): Shares Available for Grant Shares available for grant December 31, 2017 1,409 Restricted stock units granted 1 (499 ) Options granted 2 (111 ) Restricted stock units cancelled 3 112 Options cancelled 17 Shares available for grant June 30, 2018 928 (1) Includes grants of restricted stock units with service, performance-based or market-based vesting criteria. (2) Includes grants of stock options with service, performance-based or market-based vesting criteria. (3) Includes cancelled restricted stock units with service, performance-based or market-based vesting criteria. The following table summarizes stock option activity (in thousands, except weighted-average exercise price and weighted-average remaining contractual life data): Number of Stock Options 1 Weighted Average Exercise Price Weighted-Average Remaining Contractual Life (years) Aggregate Intrinsic Value 2 Balance outstanding at December 31, 2017 983 $ 17.38 4.6 $ 2,522 Granted 111 $ 15.69 Exercised (46 ) $ 13.47 Cancelled (95 ) $ 25.19 Balance outstanding at June 30, 2018 953 $ 16.45 4.7 $ 6,344 Vested and expected to vest at June 30, 2018 909 $ 16.45 4.7 $ 6,083 Exercisable at June 30, 2018 437 $ 17.38 3.6 $ 2,945 (1) Includes certain stock options with service, performance-based or market-based vesting criteria. (2) The aggregate intrinsic value is calculated as the difference between the closing price of our common stock as of December 31, 2017 and June 30, 2018 and the exercise price multiply by number of in-the-money options. The following table summarizes restricted stock unit activity (in thousands, except weighted-average grant date fair value and weighted-average remaining contractual life data): Number of Restricted Stock Units 1 Weighted-Average Grant Date Fair Value Weighted-Average Remaining Service Period Aggregate Intrinsic Value 2 Unvested as of December 31, 2017 1,745 $ 14.24 2.3 $ 30,313 Granted 499 $ 14.03 Vested (264 ) $ 14.04 Cancelled (112 ) $ 16.05 Unvested as of June 30, 2018 1,868 $ 14.92 5.8 $ 41,286 (1) Includes certain restricted stock units with service, performance-based or market-based vesting criteria. (2) The aggregate intrinsic value is calculated as the product of our closing stock price as of December 31, 2017 and June 30, 2018 and the number of restricted stock units outstanding as of December 31, 2017 and June 30, 2018 , respectively. Stock Repurchase Programs — We had no stock repurchase activity during the six months ended June 30, 2018 . In addition to 10,663,888 shares repurchased under our past repurchase programs as of June 30, 2018 , we have in treasury 660,493 shares that were previously surrendered by employees to satisfy tax withholdings due in connection with the vesting of certain restricted stock units. As of December 31, 2017 and June 30, 2018 , we had a total of 11,237,995 shares and 11,324,381 shares, respectively, held in treasury. For accounting purposes, common stock repurchased under our stock repurchase programs is recorded based upon the settlement date of the applicable trade. Such repurchased shares are held in treasury and are presented using the cost method. Stock-Based Compensation Expense — The following table summarizes stock-based compensation expense recorded during the three and six months ended June 30, 2017 and 2018 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Common stock options $ 714 $ 436 $ 901 $ 934 Restricted stock units 1,855 2,695 3,801 4,998 Total stock-based compensation expense $ 2,569 $ 3,131 $ 4,702 $ 5,932 The following table summarizes stock-based compensation expense by operating function for the three and six months ended June 30, 2017 and 2018 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Marketing and advertising $ 220 $ 553 $ 435 $ 923 Customer care and enrollment 124 206 136 371 Technology and content 274 383 668 726 General and administrative 1,951 1,989 3,463 3,661 Restructuring — — — 251 Total stock-based compensation expense $ 2,569 $ 3,131 $ 4,702 $ 5,932 During the six months ended June 30, 2018, as part of our workforce reduction as discussed in Note 10 - Restructuring Charges , we accelerated the vesting dates of certain stock options and restricted stock units granted to a former employee. We recorded $0.3 million of incremental stock-based compensation expense in connection with this modification. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table summarizes our benefit from income taxes and our effective tax rates for the three and six months ended June 30, 2017 and 2018 (in thousands, except effective tax rate): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Loss before benefit from income taxes $ (10,170 ) $ (16,624 ) $ (14,006 ) $ (23,160 ) Benefit from income taxes $ (8,664 ) $ (4,610 ) $ (13,580 ) $ (6,301 ) Effective tax rate 85.2 % 27.7 % 97.0 % 27.2 % For the three months ended June 30, 2018, we recognized a benefit from income taxes of $4.6 million , representing an effective tax rate of 28% , which was higher than the statutory federal tax rate due primarily to stock-based compensation adjustments, non-deductible lobbying expenses, and foreign income inclusions, partially offset by research and development credits. For the three months ended June 30, 2017, we recognized a benefit from income taxes of $8.7 million , representing an effective tax rate of 85% , which was higher than the statutory federal tax rate due primarily to the release of a liability for unrecognized tax benefits, research and development credits and stock-based compensation adjustments, partially offset by non-deductible lobbying expenses. For the six months ended June 30, 2018, we recognized a benefit from income taxes of $6.3 million , representing an effective tax rate of 27% , which was higher than the statutory federal tax rate due primarily to stock-based compensation adjustments, non-deductible lobbying expenses, and foreign income inclusions, partially offset by research and development credits. For the six months ended June 30, 2017, we recognized a benefit from income taxes of $13.6 million , representing an effective tax rate of 97% , which was higher than the statutory federal tax rate due primarily to the release of a liability for unrecognized tax benefits, research and development credits and stock-based compensation adjustments, partially offset by non-deductible lobbying expenses. As a result of our adoption of Topic 606 using the full retrospective method, we recognized a significant deferred tax liability in our recasted opening balance sheet due to the resulting acceleration of revenue recognition while revenue for tax purposes will continue to be recognized as we collect cash. This deferred tax liability is a source of income that can be used to support the realizability of our deferred tax assets. As a result of the significantly increased deferred tax liability, we reversed the valuation allowance recorded against our U.S. deferred tax assets as of January 1, 2015, the earliest period to which the retrospective adoption of Topic 606 was applied. We continue to recognize all our deferred tax assets as of June 30, 2018 as we believe it is more likely than not that the net deferred tax assets will be fully realized. The Tax Cuts and Jobs Act ("Jobs Act") legislation was passed in December 2017, which has various implications on our income tax provision accrual. The main impact of the Jobs Act on our provision (benefit) for income taxes is the decrease in our statutory federal income tax rate from 35% to 21% and the change in the deferred income tax rate used in determining deferred tax balances. Our estimated annual effective tax rate has been adjusted for the impact of the Jobs Act including, among other things, certain limitations on deductions and taxes on Global Intangible Low-Taxed Income ("GILTI") earned by our China subsidiary. Given the complexity of the GILTI provisions, we are still evaluating their effects and as of June 30, 2018, we have included GILTI related to current-year operations only in our estimated annual effective tax rate and have not provided for additional GILTI on deferred items. The effects of other provisions of the tax reform legislation are not expected to have a material impact on our condensed consolidated financial statements. However, the final impact of the Jobs Act may differ from our estimates, due to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued, and resulting actions we may take. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of common and common equivalent shares outstanding during the period. Diluted net loss per share is computed giving effect to all potential dilutive common stock equivalent shares, including options and restricted stock units. The dilutive effect of outstanding awards is reflected in diluted net loss per share by application of the treasury stock method. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Basic: Numerator: Net loss $ (1,506 ) $ (12,014 ) $ (426 ) $ (16,859 ) Denominator: Weighted-average number of common stock shares outstanding 18,481 19,063 18,424 18,968 Net loss per share—basic: $ (0.08 ) $ (0.63 ) $ (0.02 ) $ (0.89 ) Diluted: Numerator: Net loss $ (1,506 ) $ (12,014 ) $ (426 ) $ (16,859 ) Denominator: Net weighted average number of common stock shares outstanding 18,481 19,063 18,424 18,968 Dilutive effect of potential common stock — — — — Total common stock shares used in per share calculation 18,481 19,063 18,424 18,968 Net loss per share—diluted: $ (0.08 ) $ (0.63 ) $ (0.02 ) $ (0.89 ) For the three and six months ended June 30, 2017 and 2018 , we had securities outstanding that could potentially dilute earnings per share, but the shares from the assumed conversion or exercise of these securities were excluded in the computation of diluted net loss per share as their effect would have been anti-dilutive. The number of outstanding anti-dilutive shares that were excluded from the computation of diluted net income loss per share consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Common stock options 841 1,021 916 1,013 Restricted stock units 1,094 1,632 1,109 1,581 Total 1,935 2,653 2,025 2,594 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings On January 26, 2017, a purported class action lawsuit was filed against us in the Superior Court of the State of California, County of Santa Clara. The complaint alleges that we negligently failed to take necessary precautions required to protect from unauthorized disclosure of personally identifiable information contained on 2016 Form W-2s for current and former employees. The complaint purports to allege causes of action against us for negligence, violation of Section 17200 et seq. of the California Business & Professions Code, declaratory relief and breach of implied contract. The complaint seeks actual damages, punitive damages, statutory damages, costs, including experts’ fees and attorneys’ fees, pre-judgment and post-judgment interest as prescribed by law and equitable, injunctive and declaratory relief as appropriate. In April 2017, an additional purported class action lawsuit was filed against us in the Superior Court of State of California, County of Santa Clara, relating to the same circumstances. The second complaint purports to allege causes of action against us for negligence, violation of California Customer Records Act (California Civil Code Section 1798.80 et seq.), violation of the California Confidentiality of Medical Information Act (California Civil Code Section 56 et seq.), invasion of privacy by public disclosure of private facts, breach of confidentiality and violation of the California Unfair Competition Law (California Business & Professions Code Section 17200 et seq.). The causes of action for violations of the California Customer Records Act and the California Confidentiality of Medical Information Act were dismissed without prejudice. The second complaint seeks actual damages, statutory damages, restitution, disgorgement, equitable, injunctive and declaratory relief, costs, including experts’ fees and attorneys’ fees and costs of prosecuting the action, and pre-judgment and post-judgment interest as prescribed by law. In July 2017, we entered into a binding settlement term sheet where we and the plaintiffs in each of the above-described cases agreed to enter into a settlement, pursuant to which we would receive a release of all claims that were or could have been alleged related to the unauthorized disclosure at issue in each of the cases. In exchange for the release, we agreed to (i) pay, subject to an aggregate cap of $250,000, up to $2,500 to each impacted individual for reasonable, documented out-of-pocket losses or expenses related to the data security incident; (ii) offer to individuals who signed up for identity theft protection that we offered at the time of the incident a one-year extension of the identity theft protection; (iii) offer to individuals who did not sign up for identity theft protection that we offered at the time of the incident three-years of identity theft protection; and (iv) not oppose a request by class counsel for attorneys’ fees, costs and class representative enhancements of up to $245,000 in the aggregate. In December 2017, we entered into a joint stipulation for settlement of class action consistent with the settlement term sheet. The court entered an order preliminarily approving the settlement on April 23, 2018. As a result, notice of the settlement was sent to members of the class informing them of the settlement and the possible relief available to them thereunder. The settlement is subject to final approval of the court after the notice has been sent to the class and after a hearing before the court. As of June 30, 2018, we maintained an accrual in our consolidated financial statements for estimated potential damages and other amounts we expect to be required to pay in connection with the matter. On April 6, 2018, a former California employee filed a complaint against us in the Superior Court of the State of California for the County of Sacramento. The plaintiff’s complaint was filed pursuant to the California Labor Code Private Attorneys General Act of 2004 (“PAGA”), purportedly on behalf of all current and former hourly-paid or non-exempt employees who work or have worked for us in California. The complaint alleges that we violated a number of wage and hour laws with respect to these non-exempt employees, including, among other things, the failure to comply with California law as to (i) the payment of overtime wages; (ii) the payment of minimum wages; (iii) providing uninterrupted meal and rest periods, (iv) the payment of wages earned during employment and owed upon the termination of employment; (v) providing complete and accurate wage statements, (vi) keeping of accurate payroll records; and (vii) the proper reimbursement for necessary business-related expenses and costs. The complaint seeks allegedly unpaid wages, civil penalties and costs, expenses and attorneys’ fees. Discovery has only recently commenced, and as a result we cannot estimate the likelihood of liability or the amount of potential damages. On May 8, 2018, an individual filed a putative class action complaint against us. The complaint alleges that we violated the Telephone Consumer Protection Act, 47 U.S.C. § 227(c) and certain provisions of 47 C.F.R. § 64.1200 promulgated thereunder by initiating or causing to be initiated telephone solicitations to telephone subscribers who registered their respective telephone numbers on the National Do Not Call Registry. The complaint alleges, among other things, that we (i) made more than one unsolicited telephone call to Plaintiff and putative class members within a 12-month period without express consent to place such calls in violation of 47 U.S.C. § 227(c)(5); and (ii) initiated calls for telemarketing purposes without instituting procedures that comply with regulatory minimum standards for implementing Do Not Call in violation of 47 C.F.R. § 64.1200(d). The complaint seeks (i) an order certifying a class of individuals in the United States who (A) received more than one telephone call made by or on behalf of eHealth within a 12-month period; and (B) to a telephone number that had been registered with the National Do Not Call Registry for at least 30 days; (ii) an award of actual and statutory damages for each negligent violation to each member of the class pursuant to 47 U.S.C. § 227(b)(3)(B); (iii) an award of actual and statutory damages for each knowing and/or willful violation to each member of the class pursuant to 47 U.S.C. § 227(b)(3)(A); (iv) an injunction requiring us and our agents to cease all unsolicited telephone activities and otherwise protecting the interest of the class pursuant to 47 U.S.C. § 227(b)(3)(A); and (v) pre-judgment and post-judgment interest on monetary relief. Due to the preliminary nature of this matter and uncertainty of litigation, we are unable at this time to estimate the likelihood of liability or the amount of potential damages . In the ordinary course of our business, we have received and may continue to receive inquiries from state regulators relating to various matters. We have become, and may in the future become, involved in litigation in the ordinary course of our business. If we are found to have violated laws or regulations in any jurisdiction, we could be subject to various fines and penalties, including revocation of our license to sell insurance in those states, and our business, operating results and financial condition would be harmed. Revocation of any of our licenses or penalties in one jurisdiction could cause our license to be revoked or for us to face penalties in other jurisdictions. In addition, without a health insurance license in a jurisdiction, carriers would not pay us commissions for the products we sold in that jurisdiction, and we would not be able to sell new health insurance products in that jurisdiction. We could also be harmed to the extent that related publicity damages our reputation as a trusted source of objective information relating to health insurance and its affordability. It could also be costly to defend ourselves regardless of the outcome. Operating Lease Obligations We lease our operating facilities and certain of our equipment and furniture and fixtures under various operating leases, the latest of which expires in January 2028. Certain of these leases have free or escalating rent payment provisions. We recognize rent expense on our operating leases on a straight-line basis over the terms of the leases, although actual cash payment obligations under certain of these agreements fluctuate over the terms of the agreements. On April 25, 2018, we entered into a lease agreement to lease approximately 32,492 square feet of office space located in Santa Clara, California. We entered into this lease agreement as a result of the upcoming expiration of one of our leases in Mountain View, California on August 31, 2018. The term of the lease is approximately one hundred twenty-three months, commencing on an estimated date of October 1, 2018 and ending on an estimated date of December 31, 2028. Future minimum lease payments under this lease are expected to be $17.7 million . In connection with the Santa Clara, California lease agreement, we entered into a financial guarantee consisting of a standby letter of credit for $1.5 million , which may be reduced in increments of 20% of the original amount thereof on the second, third, fourth and fifth anniversaries of the commencement date, and may be reduced by an additional 8% of the original amount on the sixth anniversary of the commencement date, subject to our compliance with the applicable conditions to such reductions set forth in the lease. In March 2018, we entered into an agreement to lease approximately 27,000 square feet of office space in Austin, Texas. The term of this lease agreement is ninety months, commencing on an estimated date of July 15, 2018 and ending on approximately January 15, 2026. Future minimum lease payments under this lease will be approximately $4.5 million . In connection with the Austin, Texas office lease agreement, we entered into a financial guarantee consisting of a standby letter of credit for $0.6 million , which may be reduced on the third and subsequent anniversaries of the commencement date, subject to our compliance with the applicable conditions to such reductions set forth in the lease. In connection with our Mountain View, California lease agreement in March 2012, we entered into a financial guarantee consisting of a standby letter of credit for $0.6 million , which may be reduced in increments of 25% of the original amount thereof on the first, second and third anniversaries of the commencement date, subject to our compliance with the applicable conditions to such reductions set forth in the lease. The remaining balance on the financial guarantee is $0.1 million as of June 30, 2018 . Service and Licensing Obligations We have entered into service and licensing agreements with third party vendors to provide various services, including network access, equipment maintenance and software licensing. The terms of these services and licensing agreements are generally up to three years. As the benefits of these agreements are experienced uniformly over the applicable contractual periods, we record the related service and licensing expenses on a straight-line basis, although actual cash payment obligations under certain of these agreements fluctuate over the terms of the agreements. The following table presents a summary of our future minimum payments under non-cancellable operating lease agreements and contractual service and licensing obligations as of June 30, 2018 (in thousands): For the Years Ending December 31, Operating Lease Obligations Service and Licensing Obligations Total Obligations 2018 $ 2,177 $ 963 $ 3,140 2019 4,966 1,681 6,647 2020 5,238 719 5,957 2021 3,769 — 3,769 2022 3,881 — 3,881 Thereafter 13,852 — 13,852 Total $ 33,883 $ 3,363 $ 37,246 |
Operating Segments, Geographic
Operating Segments, Geographic Information and Significant Customers | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Operating Segments, Geographic Information and Significant Customers | Operating Segments, Geographic Information and Significant Customers Operating Segments We report segment information based on how our chief executive officer, who is our chief operating decision maker ("CODM"), regularly reviews our operating results, allocates resources and makes decisions regarding our business operations. The performance measures of our segments include total revenue and profit (loss). Our business structure is comprised of two operating segments. • Medicare • Individual, Family and Small Business The Medicare segment consists primarily of commissions earned from our sale of Medicare-related health insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans, and to a lesser extent, ancillary products sold to our Medicare-eligible customers, including but not limited to, dental and vision insurance, as well as our advertising program that allows Medicare-related carriers to purchase advertising on a separate website developed, hosted and maintained by us and our delivery and sale to third parties of Medicare-related health insurance leads generated by our ecommerce platforms and our marketing activities. The Individual, Family and Small Business segment consists primarily of commissions earned from our sale of individual and family and small business health insurance plans and ancillary products sold to our non-Medicare-eligible customers, including but not limited to, short-term, dental and vision insurance. To a lesser extent, the Individual, Family and Small Business segment consists of amounts earned from our online sponsorship program that allows carriers to purchase advertising space in specific markets in a sponsorship area on our website, our licensing to third parties the use of our health insurance ecommerce technology and our delivery and sale to third parties of individual and family health insurance leads generated by our ecommerce platforms and our marketing activities. Marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses that are directly attributable to a segment are reported within the applicable segment. Indirect marketing and advertising, customer care and enrollment and technology and content operating expenses are allocated to each segment based on usage. Other indirect general and administrative operating expenses are managed in a corporate shared services environment and, since they are not the responsibility of segment operating management, are not allocated to the two operating segments and are presented as a reconciling item to our consolidated financial results. Segment profit (loss) is calculated as total revenue for the applicable segment less direct and allocated marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses, excluding stock-based compensation, depreciation and amortization expense and amortization of intangible assets. The following table presents summary results of our operating segments for the three and six months ended June 30, 2017 and 2018 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Revenue Medicare $ 24,162 $ 25,468 $ 49,572 $ 56,231 Individual, Family and Small Business 10,404 7,189 26,550 19,496 Total revenue $ 34,566 $ 32,657 $ 76,122 $ 75,727 Segment profit (loss) Medicare segment profit (loss) $ (2,013 ) $ (1,473 ) $ (2,942 ) $ 1,707 Individual, Family and Small Business segment profit (loss) 2,065 (617 ) 8,835 2,871 Total segment profit (loss) 52 (2,090 ) 5,893 4,578 Corporate (6,940 ) (7,994 ) (13,739 ) (15,848 ) Stock-based compensation expense (2,569 ) (3,131 ) (4,702 ) (5,681 ) Depreciation and amortization (751 ) (631 ) (1,513 ) (1,250 ) Change in fair value of earnout liability — (2,500 ) — (2,500 ) Restructuring charges — (9 ) — (1,865 ) Acquisition costs — (18 ) — (76 ) Amortization of intangible assets (260 ) (547 ) (520 ) (998 ) Other income (expense), net 298 296 575 480 Loss before benefit from income taxes $ (10,170 ) $ (16,624 ) $ (14,006 ) $ (23,160 ) There are no internal revenue transactions between our operating segments. Our CODM does not separately evaluate assets by segment, and therefore assets by segment are not presented. Geographic Information Our long-lived assets consisted primarily of property and equipment and internally-developed software. Our long-lived assets are attributed to the geographic location in which they are located. Long-lived assets by geographical area as of December 31, 2017 and June 30, 2018 were as follows (in thousands): Dec 31, June 30, 2017 2018 United States $ 11,211 $ 12,973 China 550 469 Total $ 11,761 $ 13,442 Significant Customers Substantially all revenue for the three and six months ended June 30, 2017 and 2018 was generated from customers located in the United States. Carriers representing 10% or more of our total revenue for the three and six months ended June 30, 2017 and 2018 are presented in the table below: Three Months Ended Six Months Ended June 30, June 30, 2017 2018 2017 2018 UnitedHealthcare 1 21 % 24 % 22 % 23 % Humana 16 % 14 % 16 % 14 % (1) UnitedHealthcare also includes other carriers owned by UnitedHealthcare. As of June 30, 2018, our total outstanding commissions receivable balance was $267.4 million. Our contracts with the above carriers expose us to credit risk that a financial loss could be incurred if the counterparty does not fulfill its financial obligation. While we are exposed to credit losses due to the non-performance of our counterparties, we consider the risk of this remote. We estimate our maximum credit risk in determining the commissions receivable amount recorded on the balance sheet. |
Restructuring Charges
Restructuring Charges | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Charges | Restructuring Charges In February 2018, our Board of Directors approved a plan to close our sales call center in Massachusetts and to terminate the employment of other employees in certain other locations. As part of this plan, we eliminated approximately 110 full-time positions, representing approximately 10% of our workforce, primarily within customer care and enrollment, and to a lesser extent, in our marketing and advertising and general and administrative groups. We recognized $1.9 million in pre-tax restructuring charges, which included approximately $1.6 million for employee termination benefits and $0.3 million in non-cash accelerated stock based compensation in the six months ended June 30, 2018. The restructuring activities comprising the plan were completed during the three months ended June 30, 2018. The following table summarizes the total cash and non-cash restructuring charges recognized during the six months ended June 30, 2018 (in thousands): Employee termination costs $ 1,605 Non-cash employee termination costs - stock-based compensation 251 Other restructuring related costs 9 Total restructuring charges $ 1,865 The following table summarizes the accrued restructuring charges activity during the six months ended June 30, 2018 (in thousands): Six Months Ended June 30, 2018 Beginning balance Charges Payments Ending balance Employee termination costs $ — $ 1,605 $ (1,490 ) $ 115 Accrued restructuring charges - current $ — $ 1,605 $ (1,490 ) $ 115 |
Summary of Business and Signi15
Summary of Business and Significant Accounting Policies (Policy) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Description of Business and Principles of Consideration | Description of Business — eHealth, Inc. (the “Company,” “eHealth,” “we” or “us”) is a leading private health insurance exchange for individuals, families and small businesses in the United States. Through our website addresses ( www.eHealth.com , www.eHealthInsurance.com , www.eHealthMedicare.com, www.Medicare.com, www.PlanPrescriber.com and www.GoMedigap.com) , consumers can get quotes from leading health insurance carriers, compare plans side-by-side, and apply for and purchase Medicare-related, individual and family, small business and ancillary health insurance plans. We actively market the availability of Medicare-related insurance plans and offer Medicare plan comparison tools and educational materials for Medicare-related insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans. Our ecommerce technology also enables us to deliver consumers’ health insurance applications electronically to health insurance carriers. We are licensed to market and sell health insurance in all 50 states and the District of Columbia. Principles of Consolidation — The condensed consolidated financial statements include the accounts of eHealth, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation — The accompanying condensed consolidated balance sheets as of December 31, 2017 and June 30, 2018 , the condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2017 and 2018 and the condensed consolidated statements of cash flows for the six months ended June 30, 2017 and 2018 , respectively, are unaudited. Effective January 1, 2018, we adopted the requirements of Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) , as discussed in detail below under Adoption of New Accounting Standards . All amounts and disclosures set forth in this Quarterly Report on Form 10-Q have been updated to comply with Topic 606. Except for the impact of the adoption of Topic 606, the condensed consolidated balance sheet data as of December 31, 2017 was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017, which was filed with the Securities and Exchange Commission on March 19, 2018. The accompanying statements should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K. The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance to such rules and regulations. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017 and include all adjustments necessary for the fair presentation of our financial position as of December 31, 2017 and June 30, 2018 , our results of operations for the three and six months ended June 30, 2017 and 2018 and our cash flows for the six months ended June 30, 2017 and 2018 . The results for the three and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for any subsequent period or for the fiscal year ending December 31, 2018 and therefore should not be relied upon as an indicator of future results. |
Seasonality | Seasonality — A greater number of our Medicare-related health insurance plans are sold in our fourth quarter during the Medicare annual enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage and Medicare Part D prescription drug coverage for the following year. As a result, our Medicare plan-related commission revenue is highest in our fourth quarter. The majority of our individual and family health insurance plans are sold in the fourth quarter during the annual open enrollment period as defined under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally are not able to purchase individual and family health insurance outside of these open enrollment periods, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted Leases (Topic 842) — In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement, and presentation of expenses will depend on classification as a finance or operating lease. The guidance also eliminates existing real estate-specific provisions for all entities. The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We expect to adopt this new accounting standard in the first quarter of 2019. While we are currently evaluating the impact of adopting ASU 2016-02, based on the lease portfolio as of June 30, 2018 , we anticipate recording lease assets and liabilities of approximately $31.7 million on its Condensed Balance Sheets, with no material impact to its condensed consolidated statements of comprehensive loss. However, the ultimate impact of adopting ASU 2016-02 will depend on our lease portfolio as of the adoption date. Adoption of New Accounting Standards Compensation — Stock Compensation (Topic 718) — In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting , which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. We adopted ASU 2017-09 in the first quarter of 2018. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements. Statement of Cash Flows (Topic 230) — In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows. Under ASU 2016-18, changes in restricted cash and restricted cash equivalents would be included along with those of cash and cash equivalents in the statement of cash flows. As a result, entities would no longer present transfers between cash/equivalents and restricted cash/equivalents in the statement of cash flows. In addition, a reconciliation between the balance sheet and the statement of cash flows would be disclosed when the balance sheet includes more than one line item for cash/equivalents and restricted cash/equivalents. We adopted ASU 2016-18 in the first quarter of 2018. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . ASU 2016-15 provides guidance on how certain cash receipts and cash payments are presented on the statement of cash flows. We adopted ASU 2016-15 in the first quarter of 2018. The adoption of this new standard did not have a material impact on our condensed consolidated financial statements. Goodwill Impairment (Topic 350) — In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350) . Under the new standard, goodwill impairment would be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying value of goodwill. ASU 2017-04 eliminates existing guidance that requires an entity to determine goodwill impairment by calculating the implied fair value of goodwill by hypothetically assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. ASU 2017-04 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2019 with early adoption permitted for annual goodwill impairment tests performed after January 1, 2017. The standard must be applied prospectively. We early adopted ASU 2017-04 in the first quarter of 2018. The adoption of this new standard has not materially impacted our condensed consolidated financial statements. Revenue Recognition (Topic 606) — In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , requiring an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In April 2016, the FASB issued ASU No. 2016-10, Identifying Performance Obligations and Licensing . ASU 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. The effective date and transition requirements for ASU 2016-10 are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by ASU 2014-09). ASU 2014-09 may be adopted retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). We adopted ASC 2014-09 effective January 1, 2018, using the full retrospective method to restate each prior reporting period presented. The adoption of this standard had a material impact on our condensed consolidated balance sheets and condensed consolidated statements of comprehensive loss, but had no impact on total net cash provided by (used in) operating, investing, or financing activities within the condensed consolidated statements of cash flows. Change in Significant Accounting Policies Except for the accounting policies for revenue recognition, commissions receivable and deferred revenue that were updated as a result of adopting Topic 606, there have been no changes to our significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 19, 2018, that have had a material impact on our condensed consolidated financial statements and related notes. Revenue Recognition Policy We are compensated by the receipt of commission payments from health insurance carriers whose health insurance policies are purchased through our ecommerce platforms or our customer care centers. We may also receive commission bonuses based on our attaining predetermined target sales levels for Medicare, individual and family, small business and ancillary health insurance products, or other objectives, as determined by the health insurance carrier, which we recognize as commission revenue when we achieve the predetermined target sales levels or other objectives. In addition, we also generate revenue from non-commission revenue sources, which include online sponsorship and advertising, technology licensing and lead referrals. The core principle of Topic 606 is to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Accordingly, we recognize revenue for our services in accordance with the following five steps outlined in Topic 606: • Identification of the contract, or contracts, with a customer. A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for goods or services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. • Identification of the performance obligations in the contract. Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. • Determination of the transaction price. The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. • Allocation of the transaction price to the performance obligations in the contract. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price basis. • Recognition of revenue when, or as, we satisfy a performance obligation. We satisfy performance obligations either over time or at a point in time, as discussed in further detail below. Revenue is recognized at the time the related performance obligation is satisfied by transferring the promised good or service to the customer. Commission Revenue — Our commission revenue is primarily comprised of commissions paid to us by health insurance carriers related to insurance plans that have been purchased by a member through our health insurance exchange service. We define a member as an individual currently covered by an insurance plan, which include Medicare-related, individual and family, small business and ancillary plans. We are compensated by the health insurance carrier, which we define as our customer. We typically enter into contractual relationships with health insurance carriers that are non-exclusive and terminable on short notice by either party for any reason. In addition, health insurance carriers often have the ability to terminate or amend our agreements unilaterally on short notice, including provisions in our agreements relating to the commission rates paid to us by the health insurance carriers. The amendment or termination of an agreement we have with a health insurance carrier may adversely impact the commissions we are paid on health insurance plans purchased from the carrier by means of our health insurance exchange services. For both Medicare Advantage and Medicare Part D prescription drug plans, we receive a fixed, annual commission payment from insurance carriers once the plan is approved by the carrier and either a fixed, monthly or annual commission payment beginning with and subsequent to the second plan year. In the first plan year of a Medicare Advantage and Medicare Part D prescription drug plan, after the health insurance carrier approves the application but during the effective year of the plan, we are paid a fixed commission that is prorated for the number of months remaining in the calendar year. Additionally, if the plan is the first Medicare Advantage or Medicare Part D plan issued to the member, we may receive a higher commission rate that covers a full twelve-month period, regardless of the month the plan was effective. We earn commission revenue for Medicare Advantage and Medicare Part D prescription drug plans for which we are the broker of record, typically until either the policy is cancelled or we otherwise do not remain the agent on the policy. For individual and family, Medicare Supplement, small business and ancillary plans, our commissions generally represent a flat amount per member per month or a percentage of the premium amount collected by the carrier during the period that a member maintains coverage under a plan. Premium-based commissions are reported to us after the premiums are collected by the carrier, generally on a monthly basis. We generally continue to receive the commission payment from the relevant insurance carrier until the health insurance plan is cancelled or we otherwise do not remain the agent on the policy. We utilize a practical expedient to estimate commission revenue for each insurance product by applying the use of a portfolio approach to group approved members by the effective month of the relevant policy (referred to as a “cohort”). This allows us to estimate the commissions we expect to collect for each approved member cohort by evaluating various factors, including but not limited to, contracted commission rates, carrier mix and expected member churn. For Medicare-related, individual and family and ancillary health insurance plans, our services are complete once a submitted application is approved by the relevant health insurance carrier. Accordingly, we recognize commission revenue based upon the total estimated lifetime commissions we expect to receive for selling the plan after the carrier approves an application, net of a constraint. We refer to these estimated and constrained lifetime values as the "constrained lifetime value" for the plan. We provide annual services in selling and renewing small business health insurance plans; therefore, we recognize small business health insurance plan commission revenue at the time the plan is approved by the carrier, and when it renews each year thereafter, equal to the estimated commissions we expect to collect from the plan over the following 12-months. Our estimate of commission revenue for each product line is based on a number of assumptions, which include, but are not limited to, estimating conversion of an approved member to a paying member, forecasting member churn and forecasting the commission amounts likely to be received per member. These assumptions are based on historical trends and incorporate management’s judgment in interpreting those trends and in applying constraints discussed below. To the extent we make changes to the assumptions, we will recognize any material impact of the changes to commission revenue in the reporting period in which the change is made, including revisions of estimated lifetime commissions either below or in excess of previously estimated constrained lifetime value recognized as revenue. For Medicare-related, individual and family and ancillary health insurance plans, we apply constraints to determine the amount of commission revenue to recognize per approved member. The constraints are applied to help ensure that the total estimated lifetime commissions expected to be collected for an approved member’s plan are recognized as revenue only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with future commissions receivable from the plan is subsequently resolved. We evaluate the appropriateness of these constraints on at least an annual basis, including assessing factors affecting our estimate of the estimated lifetime value of commissions per approved member based on current trends impacting our business and assessing whether any adjustment to those constraints should be made. We update the assumptions when we observe a sufficient level of evidence that would suggest that the long term expectation of the assumption has changed. For the three months ended June 30, 2017 and 2018 , the constraints applied to the total estimated lifetime commissions we expect to receive for selling the plan after the carrier approves an application in order to derive the constrained lifetime value of commissions per approved member are as follows: Three Months Ended June 30, 2017 2018 Medicare Medicare Advantage 7 % 7 % Medicare Supplement 5 % 5 % Medicare Part D 5 % 5 % Individual and Family Non-Qualified Health Plans 15 % 15 % Qualified Health Plans 20 % 20 % Ancillary 10 % 10 % Small Business — — Other Revenue — Our sponsorship and advertising program allows carriers to purchase advertising space in specific markets in a sponsorship area on our website. In return, we are typically paid a monthly fee, which is recognized over the period that advertising is displayed. Such revenue often includes a performance fee component based on metrics such as submitted health insurance applications and is recognized when the performance obligations are fulfilled and control has been transferred. We also offer Medicare advertising services, which include website development, hosting and maintenance. In these instances, we are typically paid a fixed, up-front fee, which we recognize as revenue over the service period as the performance obligations are satisfied. Our commercial technology licensing business allows carriers the use of our ecommerce platform to offer their own health insurance policies on their websites and allows agents to utilize our technology to power their online quoting, content and application submission processes. Typically, we are paid a one-time implementation fee, which we recognize upon transfer of control at a point in time, commencing once the technology is available for use by the third party. Variable consideration in the form of performance fees based on metrics such as submitted health insurance applications are recognized upon achieving the metrics. The metrics used to calculate performance fees for both sponsorship and advertising and technology licensing are based on performance criteria that are either measured based on data tracked by us, or data tracked by the third party. Deferred revenue includes deferred technology licensing implementation fees and amounts billed or collected from sponsorship or technology licensing customers in advance of our performing our service for such customers. It also includes the amount by which both unbilled and billed services provided under our technology licensing arrangements exceed the straight-line revenue recognized to date. Some of our contracts with customers contain multiple performance obligations. We allocate revenue to all performance obligations within an arrangement with multiple deliverables at the inception of the arrangement using the relative standalone selling price method. Disaggregation of Revenue The table below depicts the disaggregation of revenue by product for the three and six months ended June 30, 2017 and 2018 and is consistent with how we evaluate our financial performance: Three Months Ended Six Months Ended June 30, June 30, 2017 2018 2017 2018 Commission Revenue: Medicare Medicare Advantage $ 18,677 $ 17,738 $ 37,882 $ 39,673 Medicare Supplement 2,886 5,355 6,800 10,947 Medicare Part D 1,203 715 2,581 1,874 Total Medicare 22,766 23,808 47,263 52,494 Individual and Family (1) Non-Qualified Health Plans 1,988 1,069 5,761 2,510 Qualified Health Plans 2,634 1,675 5,766 3,837 Total Individual and Family 4,622 2,744 11,527 6,347 Ancillary Short-term 1,029 1,293 2,875 2,543 Dental 1,003 147 2,850 1,366 Vision 282 391 852 731 Other 762 (118 ) 1,527 2,653 Total Ancillary 3,076 1,713 8,104 7,293 Small Business 1,532 1,772 3,456 4,131 Commission Bonus 455 609 938 1,088 Total Commission Revenue 32,451 30,646 71,288 71,353 Other Revenue 2,115 2,011 4,834 4,374 Total Revenue $ 34,566 $ 32,657 $ 76,122 $ 75,727 (1) We define our Individual and Family Plan offerings as major medical individual and family health insurance plans, which does not include Medicare-related, small business or ancillary plans. Individual and family health insurance plans include both Qualified and Non-Qualified plans. Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are offered through the government-run health insurance exchange in the relevant jurisdiction. Non-Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are not offered through the exchange in the relevant jurisdiction. Individuals that purchase Non-Qualified health plans cannot receive a subsidy in connection with the purchase of Non-Qualified plans. Book-of-Business Transfers We entered into several agreements with a broker partner, whereby the partner transferred certain of its existing Medicare plan members to us as the broker of record on the underlying policies. The first of these book-of-business transfers occurred in November 2010 and the most recent in June 2012. Total consideration paid by us for these books-of-business amounted to $13.9 million . Consideration paid for these books-of-business is included within commissions receivable in the accompanying condensed consolidated balance sheets. The consideration we paid to the broker partner was based on the discounted commissions expected to be received over the remaining life of each transferred Medicare plan member. As we receive commission payments from health insurance carriers for these plan members, we reduce commissions receivable for the discounted commissions expected to be received, with the remaining margin earned recorded to other income (expense), net in the condensed consolidated statements of comprehensive income (loss). The margin earned and recorded to other income (expense), net for these books-of-business for the three and six months ended June 30, 2017 and 2018 totaled $0.5 million and $0.4 million , respectively. Incremental Costs to Obtain a Contract We reviewed our sales compensation plans, which are directed at converting leads into approved members, and concluded that they are fulfillment costs and not costs to obtain a contract with a health insurance carrier, which we define as our customer. Additionally, we reviewed compensation plans related to personnel responsible for identifying new health insurance carriers and entering into contracts with new health insurance carriers and concluded that no incremental costs are incurred to obtain such contracts. Income Taxes As described in more detail in Note 6 - Income Taxes , as a result of the adoption of Topic 606, we recorded a significant deferred tax liability on our recasted opening balance sheet related to the resulting accelerated revenue recognition under Topic 606. Additionally, as a result of the deferred tax liability, we re-evaluated the need for the valuation allowance recorded against our U.S. deferred tax assets. As a result of this evaluation, we determined that the deferred tax liability is a source of income that can be used to support realization of deferred tax assets on a more-likely-than-not level and accordingly reversed our previously recorded valuation allowance as of January 1, 2015, the earliest period to which the retrospective the adoption of Topic 606 was applied. |
Summary of Business and Signi16
Summary of Business and Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The table below depicts the disaggregation of revenue by product for the three and six months ended June 30, 2017 and 2018 and is consistent with how we evaluate our financial performance: Three Months Ended Six Months Ended June 30, June 30, 2017 2018 2017 2018 Commission Revenue: Medicare Medicare Advantage $ 18,677 $ 17,738 $ 37,882 $ 39,673 Medicare Supplement 2,886 5,355 6,800 10,947 Medicare Part D 1,203 715 2,581 1,874 Total Medicare 22,766 23,808 47,263 52,494 Individual and Family (1) Non-Qualified Health Plans 1,988 1,069 5,761 2,510 Qualified Health Plans 2,634 1,675 5,766 3,837 Total Individual and Family 4,622 2,744 11,527 6,347 Ancillary Short-term 1,029 1,293 2,875 2,543 Dental 1,003 147 2,850 1,366 Vision 282 391 852 731 Other 762 (118 ) 1,527 2,653 Total Ancillary 3,076 1,713 8,104 7,293 Small Business 1,532 1,772 3,456 4,131 Commission Bonus 455 609 938 1,088 Total Commission Revenue 32,451 30,646 71,288 71,353 Other Revenue 2,115 2,011 4,834 4,374 Total Revenue $ 34,566 $ 32,657 $ 76,122 $ 75,727 (1) We define our Individual and Family Plan offerings as major medical individual and family health insurance plans, which does not include Medicare-related, small business or ancillary plans. Individual and family health insurance plans include both Qualified and Non-Qualified plans. Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are offered through the government-run health insurance exchange in the relevant jurisdiction. Non-Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are not offered through the exchange in the relevant jurisdiction. Individuals that purchase Non-Qualified health plans cannot receive a subsidy in connection with the purchase of Non-Qualified plans. For the three months ended June 30, 2017 and 2018 , the constraints applied to the total estimated lifetime commissions we expect to receive for selling the plan after the carrier approves an application in order to derive the constrained lifetime value of commissions per approved member are as follows: Three Months Ended June 30, 2017 2018 Medicare Medicare Advantage 7 % 7 % Medicare Supplement 5 % 5 % Medicare Part D 5 % 5 % Individual and Family Non-Qualified Health Plans 15 % 15 % Qualified Health Plans 20 % 20 % Ancillary 10 % 10 % Small Business — — |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The adoption of ASU 2014-09 impacted our reported results as follows (in thousands, except per share amounts): December 31, 2017 Balance Sheets As ASC 606 Adoption Adjustment As Accounts receivable $ 9,894 $ (8,419 ) $ 1,475 Commissions receivable - current $ — $ 109,666 $ 109,666 Prepaid expenses and other current assets $ 4,845 $ (540 ) $ 4,305 Commissions receivable - non-current $ — $ 169,751 $ 169,751 Other assets $ 7,317 $ (30 ) $ 7,287 Accrued marketing expenses $ 4,088 $ 605 $ 4,693 Other current liabilities $ 3,815 $ (1,807 ) $ 2,008 Deferred income taxes - non-current $ — $ 45,089 $ 45,089 Non-current liabilities $ 900 $ 1,020 $ 1,920 Retained earnings (accumulated deficit) $ (20,796 ) $ 225,521 $ 204,725 Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Statements of Operations As ASC 606 Adoption Adjustment As As ASC 606 Adoption Adjustment As Revenue $ 27,957 $ 6,609 $ 34,566 $ 106,896 $ (30,774 ) $ 76,122 Cost of revenue $ 204 $ (148 ) $ 56 $ 1,833 $ (1,596 ) $ 237 Other income, net $ 90 $ 208 $ 298 $ 116 $ 459 $ 575 Provision (benefit) from income taxes $ 125 $ (8,789 ) $ (8,664 ) $ (1,448 ) $ (12,132 ) $ (13,580 ) Net income (loss) $ (17,260 ) $ 15,754 $ (1,506 ) $ 16,161 $ (16,587 ) $ (426 ) Net income (loss) per diluted share $ (0.93 ) $ 0.85 $ (0.08 ) $ 0.86 $ (0.90 ) $ (0.02 ) Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Segment Information As ASC 606 Adoption Adjustment As As ASC 606 Adoption Adjustment As Revenue Medicare $ 11,014 $ 13,148 $ 24,162 $ 68,988 $ (19,416 ) $ 49,572 Individual, Family and Small Business 16,943 (6,539 ) 10,404 37,908 (11,358 ) 26,550 Total revenue $ 27,957 $ 6,609 $ 34,566 $ 106,896 $ (30,774 ) $ 76,122 Segment profit (loss) Medicare segment profit (loss) $ (15,107 ) $ 13,094 $ (2,013 ) $ 15,588 $ (18,530 ) $ (2,942 ) Individual, Family and Small Business segment profit 8,404 (6,339 ) 2,065 19,483 (10,648 ) 8,835 Total segment profit (loss) $ (6,703 ) $ 6,755 $ 52 $ 35,071 $ (29,178 ) $ 5,893 |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The major classes of assets and liabilities to which we have preliminarily allocated the acquisition consideration were as follows (in thousands): Acquisition Consideration Cash paid $ 15,000 Fair value of equity awards issued to GoMedigap members (1) 5,595 Estimated fair value of earnout liability 27,700 $ 48,295 Allocation Cash and cash equivalents $ 71 Commission receivable - current 4,371 Prepaid expenses and other current assets 11 Commission receivable - non-current 11,103 Property and equipment, net 174 Accounts payable (110 ) Accrued compensation and benefits (132 ) Other current liabilities (131 ) Net tangible assets acquired 15,357 Intangible assets 6,800 Goodwill 26,138 Total intangible assets acquired 32,938 Total net assets acquired $ 48,295 (1) The fair value of equity awards issued was determined based on the January 22, 2018 closing price of our common stock of $18.99 . |
Acquisition Fair Value Measurements | Assets acquired and liabilities assumed measured and reported at fair value are classified in one of the following categories based on inputs: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities; or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability. Level 3 Unobservable inputs for the asset or liability. |
Schedule of Acquired Indefinite-lived Intangible Assets by Major Class | Following are the details of the acquisition consideration allocated to the intangible assets acquired (in thousands): Technology $ 2,000 Trade names, trademarks and website addresses 4,800 Total intangible assets $ 6,800 |
Balance Sheet Accounts (Tables)
Balance Sheet Accounts (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule Of Cash And Cash Equivalents | As of December 31, 2017 and June 30, 2018 , our cash and cash equivalent balances were invested as follows (in thousands): December 31, 2017 June 30, 2018 Cash $ 5,098 $ 7,396 Money market funds 35,195 23,378 Total cash and cash equivalents $ 40,293 $ 30,774 |
Schedule Of Prepaid Expenses And Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2017 June 30, 2018 Prepaid maintenance contracts $ 1,945 $ 1,849 Prepaid insurance 490 1,169 Prepaid rent 311 508 Other current assets 1,559 1,915 Total prepaid expenses and other current assets $ 4,305 $ 5,441 |
Schedule Of Intangible Assets | The carrying amounts, accumulated amortization, net carrying value and weighted average remaining life of our definite-lived amortizable intangible assets, as well as our indefinite-lived intangible trademarks, are presented in the tables below for (dollars in thousands, weighted-average remaining life in years): December 31, 2017 June 30, 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Life Technology $ 1,700 $ (1,700 ) $ — $ 3,700 $ (1,978 ) $ 1,722 2.6 years Pharmacy and customer relationships 10,100 (7,884 ) 2,216 10,100 (8,358 ) 1,742 1.8 years Trade names, trademarks and website addresses 907 (697 ) 210 5,707 (943 ) 4,764 9.3 years Total intangible assets subject to amortization $ 12,707 $ (10,281 ) 2,426 $ 19,507 $ (11,279 ) 8,228 Indefinite-lived trademarks and domain names 5,114 5,114 Indefinite Total intangible assets $ 7,540 $ 13,342 |
Schedule Of Intangible Assets Future Amortization Expense | As of June 30, 2018 , expected amortization expense in future periods is as follows (in thousands): Years Ending December 31, Technology Pharmacy and Customer Relationships Trade Names, Trademarks and Website Addresses Total 2018 $ 333 $ 475 $ 284 $ 1,092 2019 667 950 570 2,187 2020 667 317 510 1,494 2021 55 — 480 535 2022 — — 480 480 Thereafter — — 2,440 2,440 Total $ 1,722 $ 1,742 $ 4,764 $ 8,228 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | We classify the inputs used to measure fair value into the following hierarchy: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 Unadjusted quoted prices in active markets for similar assets or liabilities; unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability. Level 3 Unobservable inputs for the asset or liability. |
Summary of Financial Assets Measured at Fair Value on a Recurring Basis | The following table is a summary of financial assets measured at fair value on a recurring basis and their classification within the fair value hierarchy (in thousands). December 31, 2017 June 30, 2018 Carrying Value Level 1 Total Carrying Value Level 1 Level 3 Total Assets Money market funds $ 35,195 $ 35,195 $ 35,195 $ 23,378 $ 23,378 $ — $ 23,378 Total assets measured and recorded at fair value $ 35,195 $ 35,195 $ 35,195 $ 23,378 $ 23,378 $ — $ 23,378 Liability Earnout liability - current $ — $ — $ — $ 15,766 $ — $ 15,766 $ 15,766 Earnout liability - non-current — — — 14,434 — 14,434 14,434 Total liabilities measured and recorded at fair value $ — $ — $ — $ 30,200 $ — $ 30,200 $ 30,200 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule Of Stock Option Share Activity Under Stock Plans | The following table summarizes activity under our 2014 Equity Incentive Plan (the “2014 Plan”) for the six months ended June 30, 2018 (in thousands): Shares Available for Grant Shares available for grant December 31, 2017 1,409 Restricted stock units granted 1 (499 ) Options granted 2 (111 ) Restricted stock units cancelled 3 112 Options cancelled 17 Shares available for grant June 30, 2018 928 (1) Includes grants of restricted stock units with service, performance-based or market-based vesting criteria. (2) Includes grants of stock options with service, performance-based or market-based vesting criteria. (3) Includes cancelled restricted stock units with service, performance-based or market-based vesting criteria. |
Schedule Of Activity Under Stock Plans | The following table summarizes stock option activity (in thousands, except weighted-average exercise price and weighted-average remaining contractual life data): Number of Stock Options 1 Weighted Average Exercise Price Weighted-Average Remaining Contractual Life (years) Aggregate Intrinsic Value 2 Balance outstanding at December 31, 2017 983 $ 17.38 4.6 $ 2,522 Granted 111 $ 15.69 Exercised (46 ) $ 13.47 Cancelled (95 ) $ 25.19 Balance outstanding at June 30, 2018 953 $ 16.45 4.7 $ 6,344 Vested and expected to vest at June 30, 2018 909 $ 16.45 4.7 $ 6,083 Exercisable at June 30, 2018 437 $ 17.38 3.6 $ 2,945 (1) Includes certain stock options with service, performance-based or market-based vesting criteria. (2) The aggregate intrinsic value is calculated as the difference between the closing price of our common stock as of December 31, 2017 and June 30, 2018 and the exercise price multiply by number of in-the-money options. |
Schedule Of Restricted Stock Unit Activity Under Stock Plans | The following table summarizes restricted stock unit activity (in thousands, except weighted-average grant date fair value and weighted-average remaining contractual life data): Number of Restricted Stock Units 1 Weighted-Average Grant Date Fair Value Weighted-Average Remaining Service Period Aggregate Intrinsic Value 2 Unvested as of December 31, 2017 1,745 $ 14.24 2.3 $ 30,313 Granted 499 $ 14.03 Vested (264 ) $ 14.04 Cancelled (112 ) $ 16.05 Unvested as of June 30, 2018 1,868 $ 14.92 5.8 $ 41,286 (1) Includes certain restricted stock units with service, performance-based or market-based vesting criteria. (2) The aggregate intrinsic value is calculated as the product of our closing stock price as of December 31, 2017 and June 30, 2018 and the number of restricted stock units outstanding as of December 31, 2017 and June 30, 2018 , respectively. |
Schedule Of Stock-Based Compensation Expense By Award Type | The following table summarizes stock-based compensation expense recorded during the three and six months ended June 30, 2017 and 2018 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Common stock options $ 714 $ 436 $ 901 $ 934 Restricted stock units 1,855 2,695 3,801 4,998 Total stock-based compensation expense $ 2,569 $ 3,131 $ 4,702 $ 5,932 |
Schedule Of Stock-Based Compensation Expense By Operating Function | The following table summarizes stock-based compensation expense by operating function for the three and six months ended June 30, 2017 and 2018 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Marketing and advertising $ 220 $ 553 $ 435 $ 923 Customer care and enrollment 124 206 136 371 Technology and content 274 383 668 726 General and administrative 1,951 1,989 3,463 3,661 Restructuring — — — 251 Total stock-based compensation expense $ 2,569 $ 3,131 $ 4,702 $ 5,932 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule Of Components Of Income Tax Expense | The following table summarizes our benefit from income taxes and our effective tax rates for the three and six months ended June 30, 2017 and 2018 (in thousands, except effective tax rate): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Loss before benefit from income taxes $ (10,170 ) $ (16,624 ) $ (14,006 ) $ (23,160 ) Benefit from income taxes $ (8,664 ) $ (4,610 ) $ (13,580 ) $ (6,301 ) Effective tax rate 85.2 % 27.7 % 97.0 % 27.2 % |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule Of Computation Of Basic And Diluted Net Income Per Share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Basic: Numerator: Net loss $ (1,506 ) $ (12,014 ) $ (426 ) $ (16,859 ) Denominator: Weighted-average number of common stock shares outstanding 18,481 19,063 18,424 18,968 Net loss per share—basic: $ (0.08 ) $ (0.63 ) $ (0.02 ) $ (0.89 ) Diluted: Numerator: Net loss $ (1,506 ) $ (12,014 ) $ (426 ) $ (16,859 ) Denominator: Net weighted average number of common stock shares outstanding 18,481 19,063 18,424 18,968 Dilutive effect of potential common stock — — — — Total common stock shares used in per share calculation 18,481 19,063 18,424 18,968 Net loss per share—diluted: $ (0.08 ) $ (0.63 ) $ (0.02 ) $ (0.89 ) |
Schedule Of Anti-dilutive Shares Excluded From Computation Of Net Income Per Share | The number of outstanding anti-dilutive shares that were excluded from the computation of diluted net income loss per share consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Common stock options 841 1,021 916 1,013 Restricted stock units 1,094 1,632 1,109 1,581 Total 1,935 2,653 2,025 2,594 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Future Minimum Rental Payments For Operating Leases | The following table presents a summary of our future minimum payments under non-cancellable operating lease agreements and contractual service and licensing obligations as of June 30, 2018 (in thousands): For the Years Ending December 31, Operating Lease Obligations Service and Licensing Obligations Total Obligations 2018 $ 2,177 $ 963 $ 3,140 2019 4,966 1,681 6,647 2020 5,238 719 5,957 2021 3,769 — 3,769 2022 3,881 — 3,881 Thereafter 13,852 — 13,852 Total $ 33,883 $ 3,363 $ 37,246 |
Operating Segments, Geographi24
Operating Segments, Geographic Information and Significant Customers (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table presents summary results of our operating segments for the three and six months ended June 30, 2017 and 2018 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2018 2017 2018 Revenue Medicare $ 24,162 $ 25,468 $ 49,572 $ 56,231 Individual, Family and Small Business 10,404 7,189 26,550 19,496 Total revenue $ 34,566 $ 32,657 $ 76,122 $ 75,727 Segment profit (loss) Medicare segment profit (loss) $ (2,013 ) $ (1,473 ) $ (2,942 ) $ 1,707 Individual, Family and Small Business segment profit (loss) 2,065 (617 ) 8,835 2,871 Total segment profit (loss) 52 (2,090 ) 5,893 4,578 Corporate (6,940 ) (7,994 ) (13,739 ) (15,848 ) Stock-based compensation expense (2,569 ) (3,131 ) (4,702 ) (5,681 ) Depreciation and amortization (751 ) (631 ) (1,513 ) (1,250 ) Change in fair value of earnout liability — (2,500 ) — (2,500 ) Restructuring charges — (9 ) — (1,865 ) Acquisition costs — (18 ) — (76 ) Amortization of intangible assets (260 ) (547 ) (520 ) (998 ) Other income (expense), net 298 296 575 480 Loss before benefit from income taxes $ (10,170 ) $ (16,624 ) $ (14,006 ) $ (23,160 ) |
Schedule Of Long Lived Assets By Geographical Areas | Long-lived assets by geographical area as of December 31, 2017 and June 30, 2018 were as follows (in thousands): Dec 31, June 30, 2017 2018 United States $ 11,211 $ 12,973 China 550 469 Total $ 11,761 $ 13,442 |
Schedule Of Revenue By Major Customers | Carriers representing 10% or more of our total revenue for the three and six months ended June 30, 2017 and 2018 are presented in the table below: Three Months Ended Six Months Ended June 30, June 30, 2017 2018 2017 2018 UnitedHealthcare 1 21 % 24 % 22 % 23 % Humana 16 % 14 % 16 % 14 % (1) UnitedHealthcare also includes other carriers owned by UnitedHealthcare. |
Restructuring Charges (Tables)
Restructuring Charges (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Charges | The following table summarizes the total cash and non-cash restructuring charges recognized during the six months ended June 30, 2018 (in thousands): Employee termination costs $ 1,605 Non-cash employee termination costs - stock-based compensation 251 Other restructuring related costs 9 Total restructuring charges $ 1,865 |
Schedule of Restructuring Reserve | The following table summarizes the accrued restructuring charges activity during the six months ended June 30, 2018 (in thousands): Six Months Ended June 30, 2018 Beginning balance Charges Payments Ending balance Employee termination costs $ — $ 1,605 $ (1,490 ) $ 115 Accrued restructuring charges - current $ — $ 1,605 $ (1,490 ) $ 115 |
Summary of Business and Signi26
Summary of Business and Significant Accounting Policies - Narrative (Details) $ in Millions | 3 Months Ended | 20 Months Ended | |
Jun. 30, 2018USD ($)state | Jun. 30, 2017USD ($) | Jun. 30, 2012USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of states in which the Company is licensed to market and sell health insurance | state | 50 | ||
Book-of-business transfers | $ 13.9 | ||
Book-of-business, margin earned | $ 0.4 | $ 0.5 | |
Pro Forma | Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease, asset | 31.7 | ||
Operating lease, liability | $ 31.7 |
Summary of Business and Signi27
Summary of Business and Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Disaggregation of Revenue [Line Items] | ||||
Commission | $ 30,646 | $ 32,451 | $ 71,353 | $ 71,288 |
Other | 2,011 | 2,115 | 4,374 | 4,834 |
Total revenue | 32,657 | 34,566 | 75,727 | 76,122 |
Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Commission | $ 23,808 | $ 22,766 | $ 52,494 | $ 47,263 |
Medicare | Medicare Advantage | ||||
Disaggregation of Revenue [Line Items] | ||||
LTV Commissions | 7.00% | 7.00% | 7.00% | 7.00% |
Commission | $ 17,738 | $ 18,677 | $ 39,673 | $ 37,882 |
Medicare | Medicare Supplement | ||||
Disaggregation of Revenue [Line Items] | ||||
LTV Commissions | 5.00% | 5.00% | 5.00% | 5.00% |
Commission | $ 5,355 | $ 2,886 | $ 10,947 | $ 6,800 |
Medicare | Medicare Part D | ||||
Disaggregation of Revenue [Line Items] | ||||
LTV Commissions | 5.00% | 5.00% | 5.00% | 5.00% |
Commission | $ 715 | $ 1,203 | $ 1,874 | $ 2,581 |
Individual and Family | ||||
Disaggregation of Revenue [Line Items] | ||||
Commission | $ 2,744 | $ 4,622 | $ 6,347 | $ 11,527 |
Individual and Family | Non-Qualified Health Plans | ||||
Disaggregation of Revenue [Line Items] | ||||
LTV Commissions | 15.00% | 15.00% | 15.00% | 15.00% |
Commission | $ 1,069 | $ 1,988 | $ 2,510 | $ 5,761 |
Individual and Family | Qualified Health Plans | ||||
Disaggregation of Revenue [Line Items] | ||||
LTV Commissions | 20.00% | 20.00% | 20.00% | 20.00% |
Commission | $ 1,675 | $ 2,634 | $ 3,837 | $ 5,766 |
Ancillary | ||||
Disaggregation of Revenue [Line Items] | ||||
LTV Commissions | 10.00% | 10.00% | 10.00% | 10.00% |
Commission | $ 1,713 | $ 3,076 | $ 7,293 | $ 8,104 |
Ancillary | Short-term | ||||
Disaggregation of Revenue [Line Items] | ||||
Commission | 1,293 | 1,029 | 2,543 | 2,875 |
Ancillary | Dental | ||||
Disaggregation of Revenue [Line Items] | ||||
Commission | 147 | 1,003 | 1,366 | 2,850 |
Ancillary | Vision | ||||
Disaggregation of Revenue [Line Items] | ||||
Commission | 391 | 282 | 731 | 852 |
Ancillary | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Commission | $ (118) | $ 762 | $ 2,653 | $ 1,527 |
Small Business | ||||
Disaggregation of Revenue [Line Items] | ||||
LTV Commissions | 0.00% | 0.00% | 0.00% | 0.00% |
Commission | $ 1,772 | $ 1,532 | $ 4,131 | $ 3,456 |
Commission Bonus | ||||
Disaggregation of Revenue [Line Items] | ||||
Commission | $ 609 | $ 455 | $ 1,088 | $ 938 |
Summary of Business and Signi28
Summary of Business and Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Balance Sheets | |||||
Accounts receivable | $ 846 | $ 846 | $ 1,475 | ||
Commissions receivable - current | 88,246 | 88,246 | 109,666 | ||
Prepaid expenses and other current assets | 5,441 | 5,441 | 4,305 | ||
Commissions receivable - non-current | 179,150 | 179,150 | 169,751 | ||
Other assets | 9,035 | 9,035 | 7,287 | ||
Accrued marketing expenses | 2,742 | 2,742 | 4,693 | ||
Other current liabilities | 3,523 | 3,523 | 2,008 | ||
Deferred income taxes - non-current | 45,089 | ||||
Other non-current liabilities | 2,197 | 2,197 | 1,920 | ||
Retained earnings (accumulated benefit) | 187,866 | 187,866 | 204,725 | ||
Statements of Operations | |||||
Revenue | 32,657 | $ 34,566 | 75,727 | $ 76,122 | |
Cost of revenue | 151 | 56 | 303 | 237 | |
Other income (expense), net | 296 | 298 | 480 | 575 | |
Benefit from income taxes | (4,610) | (8,664) | (6,301) | (13,580) | |
Net income (loss) | $ (12,014) | $ (1,506) | $ (16,859) | $ (426) | |
Net income (loss) per diluted share (in usd per share) | $ (0.63) | $ (0.08) | $ (0.89) | $ (0.02) | |
Operating Segments | |||||
Statements of Operations | |||||
Revenue | $ 32,657 | $ 34,566 | $ 75,727 | $ 76,122 | |
Segment profit (loss) | (2,090) | 52 | 4,578 | 5,893 | |
Operating Segments | Medicare | |||||
Statements of Operations | |||||
Revenue | 25,468 | 24,162 | 56,231 | 49,572 | |
Segment profit (loss) | (1,473) | (2,013) | 1,707 | (2,942) | |
Operating Segments | Individual, Family and Small Business | |||||
Statements of Operations | |||||
Revenue | 7,189 | 10,404 | 19,496 | 26,550 | |
Segment profit (loss) | $ (617) | 2,065 | $ 2,871 | 8,835 | |
As Reported | Operating Segments | |||||
Statements of Operations | |||||
Revenue | 27,957 | 106,896 | |||
Segment profit (loss) | (6,703) | 35,071 | |||
As Reported | Operating Segments | Medicare | |||||
Statements of Operations | |||||
Revenue | 11,014 | 68,988 | |||
Segment profit (loss) | (15,107) | 15,588 | |||
As Reported | Operating Segments | Individual, Family and Small Business | |||||
Statements of Operations | |||||
Revenue | 16,943 | 37,908 | |||
Segment profit (loss) | 8,404 | 19,483 | |||
Accounting Standards Update 2014-09 | As Reported | |||||
Balance Sheets | |||||
Accounts receivable | 9,894 | ||||
Commissions receivable - current | 0 | ||||
Prepaid expenses and other current assets | 4,845 | ||||
Commissions receivable - non-current | 0 | ||||
Other assets | 7,317 | ||||
Accrued marketing expenses | 4,088 | ||||
Other current liabilities | 3,815 | ||||
Deferred income taxes - non-current | 0 | ||||
Other non-current liabilities | 900 | ||||
Retained earnings (accumulated benefit) | (20,796) | ||||
Statements of Operations | |||||
Revenue | 27,957 | 106,896 | |||
Cost of revenue | 204 | 1,833 | |||
Other income (expense), net | 90 | 116 | |||
Benefit from income taxes | 125 | (1,448) | |||
Net income (loss) | $ (17,260) | $ 16,161 | |||
Net income (loss) per diluted share (in usd per share) | $ (0.93) | $ 0.86 | |||
Accounting Standards Update 2014-09 | ASC 606 Adoption Adjustment | |||||
Balance Sheets | |||||
Accounts receivable | (8,419) | ||||
Commissions receivable - current | 109,666 | ||||
Prepaid expenses and other current assets | (540) | ||||
Commissions receivable - non-current | 169,751 | ||||
Other assets | (30) | ||||
Accrued marketing expenses | 605 | ||||
Other current liabilities | (1,807) | ||||
Deferred income taxes - non-current | 45,089 | ||||
Other non-current liabilities | 1,020 | ||||
Retained earnings (accumulated benefit) | $ 225,521 | ||||
Statements of Operations | |||||
Revenue | $ 6,609 | $ (30,774) | |||
Cost of revenue | (148) | (1,596) | |||
Other income (expense), net | 208 | 459 | |||
Benefit from income taxes | (8,789) | (12,132) | |||
Net income (loss) | $ 15,754 | $ (16,587) | |||
Net income (loss) per diluted share (in usd per share) | $ 0.85 | $ (0.90) | |||
Accounting Standards Update 2014-09 | ASC 606 Adoption Adjustment | Operating Segments | |||||
Statements of Operations | |||||
Revenue | $ 6,609 | $ (30,774) | |||
Segment profit (loss) | 6,755 | (29,178) | |||
Accounting Standards Update 2014-09 | ASC 606 Adoption Adjustment | Operating Segments | Medicare | |||||
Statements of Operations | |||||
Revenue | 13,148 | (19,416) | |||
Segment profit (loss) | 13,094 | (18,530) | |||
Accounting Standards Update 2014-09 | ASC 606 Adoption Adjustment | Operating Segments | Individual, Family and Small Business | |||||
Statements of Operations | |||||
Revenue | (6,539) | (11,358) | |||
Segment profit (loss) | $ (6,339) | $ (10,648) |
Acquisition - Narrative (Detai
Acquisition - Narrative (Details) - USD ($) $ in Thousands | Jan. 22, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Business Acquisition [Line Items] | |||||
Change in fair value of earnout liability | $ 2,500 | $ 0 | $ 2,500 | $ 0 | |
Acquisition costs | $ 18 | $ 0 | $ 76 | $ 0 | |
GoMedigap | |||||
Business Acquisition [Line Items] | |||||
Cash paid | $ 15,000 | ||||
Cash and cash equivalents | $ 71 | ||||
Shares acquired (in shares) | 294,637 | ||||
Earnout consideration | $ 20,000 | ||||
Earnout consideration (in shares) | 589,275 | ||||
Goodwill deductible period | 15 years | ||||
Trade names, trademarks and website addresses | |||||
Business Acquisition [Line Items] | |||||
Weighted average remaining life | 9 years 3 months 24 days | ||||
Minimum | Trade names, trademarks and website addresses | GoMedigap | |||||
Business Acquisition [Line Items] | |||||
Weighted average remaining life | 3 years | ||||
Maximum | Trade names, trademarks and website addresses | GoMedigap | |||||
Business Acquisition [Line Items] | |||||
Weighted average remaining life | 10 years |
Acquisition - Purchase Price A
Acquisition - Purchase Price Allocation (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 22, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Allocation | |||
Goodwill | $ 40,233 | $ 14,096 | |
Share price (usd per share) | $ 18.99 | ||
GoMedigap | |||
Acquisition Consideration | |||
Cash paid | $ 15,000 | ||
Fair value of equity awards issued to GoMedigap members | 5,595 | ||
Estimated fair value of earnout liability | 27,700 | ||
Purchase price | 48,295 | ||
Allocation | |||
Cash and cash equivalents | 71 | ||
Commission receivable - current | 4,371 | ||
Prepaid expenses and other current assets | 11 | ||
Commission receivable - non-current | 11,103 | ||
Property and equipment, net | 174 | ||
Accounts payable | (110) | ||
Accrued compensation and benefits | (132) | ||
Other current liabilities | (131) | ||
Net tangible assets acquired | 15,357 | ||
Intangible assets | 6,800 | ||
Goodwill | 26,138 | ||
Total intangible assets acquired | 32,938 | ||
Total net assets acquired | 48,295 | ||
Technology | GoMedigap | |||
Allocation | |||
Intangible assets | 2,000 | ||
Trade names, trademarks and website addresses | GoMedigap | |||
Allocation | |||
Intangible assets | $ 4,800 |
Balance Sheet Accounts - Schedu
Balance Sheet Accounts - Schedule of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||||
Cash | $ 7,396 | $ 5,098 | ||
Money market funds | 23,378 | 35,195 | ||
Total cash and cash equivalents | $ 30,774 | $ 40,293 | $ 66,080 | $ 61,781 |
Balance Sheet Accounts - Sched
Balance Sheet Accounts - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Prepaid maintenance contracts | $ 1,849 | $ 1,945 |
Prepaid insurance | 1,169 | 490 |
Prepaid rent | 508 | 311 |
Other current assets | 1,915 | 1,559 |
Total prepaid expenses and other current assets | $ 5,441 | $ 4,305 |
Balance Sheet Accounts - Sch33
Balance Sheet Accounts - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 19,507 | $ 12,707 |
Accumulated Amortization | (11,279) | (10,281) |
Total | 8,228 | 2,426 |
Indefinite-lived trademarks and domain names | 5,114 | 5,114 |
Intangible assets | 13,342 | 7,540 |
Technology | ||
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | 3,700 | 1,700 |
Accumulated Amortization | (1,978) | (1,700) |
Total | $ 1,722 | 0 |
Weighted average remaining life | 2 years 7 months 6 days | |
Pharmacy and customer relationships | ||
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 10,100 | 10,100 |
Accumulated Amortization | (8,358) | (7,884) |
Total | $ 1,742 | 2,216 |
Weighted average remaining life | 1 year 9 months 18 days | |
Trade names, trademarks and website addresses | ||
Schedule Of Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 5,707 | 907 |
Accumulated Amortization | (943) | (697) |
Total | $ 4,764 | $ 210 |
Weighted average remaining life | 9 years 3 months 24 days |
Balance Sheet Accounts - Sch34
Balance Sheet Accounts - Schedule of Intangible Asset Future Amortization Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fiscal Year Maturity [Abstract] | ||
2,018 | $ 1,092 | |
2,019 | 2,187 | |
2,020 | 1,494 | |
2,021 | 535 | |
2,022 | 480 | |
Thereafter | 2,440 | |
Total | 8,228 | $ 2,426 |
Technology | ||
Fiscal Year Maturity [Abstract] | ||
2,018 | 333 | |
2,019 | 667 | |
2,020 | 667 | |
2,021 | 55 | |
2,022 | 0 | |
Thereafter | 0 | |
Total | 1,722 | 0 |
Pharmacy and customer relationships | ||
Fiscal Year Maturity [Abstract] | ||
2,018 | 475 | |
2,019 | 950 | |
2,020 | 317 | |
2,021 | 0 | |
2,022 | 0 | |
Thereafter | 0 | |
Total | 1,742 | 2,216 |
Trade names, trademarks and website addresses | ||
Fiscal Year Maturity [Abstract] | ||
2,018 | 284 | |
2,019 | 570 | |
2,020 | 510 | |
2,021 | 480 | |
2,022 | 480 | |
Thereafter | 2,440 | |
Total | $ 4,764 | $ 210 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | $ 23,378 | $ 35,195 |
Total liabilities measured and recorded at fair value | 30,200 | 0 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 23,378 | 35,195 |
Total liabilities measured and recorded at fair value | 30,200 | 0 |
Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 23,378 | 35,195 |
Total liabilities measured and recorded at fair value | 0 | 0 |
Fair Value | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 0 | |
Total liabilities measured and recorded at fair value | 30,200 | |
Earnout liability - current | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 15,766 | 0 |
Earnout liability - current | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 15,766 | 0 |
Earnout liability - current | Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 0 | 0 |
Earnout liability - current | Fair Value | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 15,766 | |
Earnout liability - non-current | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 14,434 | 0 |
Earnout liability - non-current | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 14,434 | 0 |
Earnout liability - non-current | Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 0 | 0 |
Earnout liability - non-current | Fair Value | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total liabilities measured and recorded at fair value | 14,434 | |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 23,378 | 35,195 |
Money market funds | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 23,378 | 35,195 |
Money market funds | Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | 23,378 | $ 35,195 |
Money market funds | Fair Value | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured and recorded at fair value | $ 0 |
Stockholder's Equity - Schedul
Stockholder's Equity - Schedule of Stock Plan Activity (Details) - 2014 Equity Incentive Plan shares in Thousands | 6 Months Ended |
Jun. 30, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Movement in Shares Available for Grant [Roll Forward] | |
Shares available for grant (in shares) | 1,409 |
Restricted stock units granted (in shares) | (499) |
Options granted (in shares) | (111) |
Restricted stock units cancelled (in shares) | 112 |
Options cancelled (in shares) | 17 |
Shares available for grant (in shares) | 928 |
Stockholder's Equity - Sched37
Stockholder's Equity - Schedule of Option Activity Under Stock Plans (Details) - Common stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Number of Stock Options | ||
Stock options issued and outstanding (in shares) | 983 | |
Granted (in shares) | 111 | |
Exercised (in shares) | (46) | |
Cancelled (in shares) | (95) | |
Stock options issued and outstanding (in shares) | 953 | 983 |
Options vested and expected to vest (in shares) | 909 | |
Options exercisable (in shares) | 437 | |
Weighted Average Exercise Price | ||
Weighted-average exercise price, balance outstanding (in dollars per share) | $ 17.38 | |
Granted (in dollars per share) | 15.69 | |
Exercised (in dollars per share) | 13.47 | |
Cancelled (in dollars per share) | 25.19 | |
Weighted-average exercise price, balance outstanding (in dollars per share) | 16.45 | $ 17.38 |
Weighted-average exercise price, vested and expected to vest (in dollars per share) | 16.45 | |
Weighted-average exercise price, exercisable (in dollars per share) | $ 17.38 | |
Weighted-average remaining contractual life (years), balance outstanding | 4 years 8 months 19 days | 4 years 7 months 6 days |
Weighted-average remaining contractual life (years), vested and expected to Vest | 4 years 7 months 28 days | |
Weighted-average remaining contractual life (years), exercisable | 3 years 6 months 22 days | |
Aggregate intrinsic value, balance outstanding | $ 6,344 | $ 2,522 |
Aggregate intrinsic value, vested and expected to vest | 6,083 | |
Aggregate intrinsic value, exercisable | $ 2,945 |
Stockholder's Equity - Sched38
Stockholder's Equity - Schedule of Restricted Stock Unit Activity Under Stock Plans (Details) - Restricted stock units - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Number of Restricted Stock Units | ||
Restricted Stock Units Issued And Outstanding (in shares) | 1,745 | |
Granted (in shares) | 499 | |
Vested (in shares) | (264) | |
Cancelled (in shares) | (112) | |
Restricted Stock Units Issued And Outstanding (in shares) | 1,868 | 1,745 |
Weighted-Average Grant Date Fair Value | ||
Weighted-Average Grant Date Fair Value, Balance (in dollars per share) | $ 14.24 | |
Granted (in dollars per share) | 14.03 | |
Vested (in dollars per share) | 14.04 | |
Cancelled (in dollars per share) | 16.05 | |
Weighted-Average Grant Date Fair Value, Balance (in dollars per share) | $ 14.92 | $ 14.24 |
Weighted-Average Remaining Service Period | 5 years 9 months 7 days | 2 years 3 months 14 days |
Aggregate Intrinsic Value | $ 41,286 | $ 30,313 |
Stockholder's Equity - Narrati
Stockholder's Equity - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | 51 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |||
Number of shares repurchased under share repurchase plan (in shares) | 0 | 10,663,888 | |
Treasury shares that were previously surrendered by employees to satisfy tax withholdings (in shares) | 660,493 | ||
Treasury stock (in shares) | 11,324,381 | 11,324,381 | 11,237,995 |
Incremental stock-based compensation expense | $ 0.3 |
Stockholder's Equity - Sched40
Stockholder's Equity - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 3,131 | $ 2,569 | $ 5,932 | $ 4,702 |
Marketing and advertising | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 553 | 220 | 923 | 435 |
Customer care and enrollment | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 206 | 124 | 371 | 136 |
Technology and content | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 383 | 274 | 726 | 668 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,989 | 1,951 | 3,661 | 3,463 |
Restructuring | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 0 | 0 | 251 | 0 |
Common stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 436 | 714 | 934 | 901 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 2,695 | $ 1,855 | $ 4,998 | $ 3,801 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Loss before benefit from income taxes | $ (16,624) | $ (10,170) | $ (23,160) | $ (14,006) |
Benefit from income taxes | $ (4,610) | $ (8,664) | $ (6,301) | $ (13,580) |
Effective tax rate | 27.70% | 85.20% | 27.20% | 97.00% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 4,610 | $ 8,664 | $ 6,301 | $ 13,580 |
Effective tax rate | 27.70% | 85.20% | 27.20% | 97.00% |
Net Loss Per Share - Schedule
Net Loss Per Share - Schedule of Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator: | ||||
Net loss | $ (12,014) | $ (1,506) | $ (16,859) | $ (426) |
Denominator: | ||||
Weighted-average number of common stock shares outstanding (in shares) | 19,063 | 18,481 | 18,968 | 18,424 |
Dilutive effect of potential common stock (in shares) | 0 | 0 | 0 | 0 |
Net loss per share-basic (in usd per share) | $ (0.63) | $ (0.08) | $ (0.89) | $ (0.02) |
Total common stock shares used in per share calculation (in shares) | 19,063 | 18,481 | 18,968 | 18,424 |
Net income (loss) per diluted share (in usd per share) | $ (0.63) | $ (0.08) | $ (0.89) | $ (0.02) |
Net Loss Per Share - Schedul44
Net Loss Per Share - Schedule of Anti-Dilutive Shares Excluded from Computation Of Net Income Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 2,653 | 1,935 | 2,594 | 2,025 |
Common stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 1,021 | 841 | 1,013 | 916 |
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 1,632 | 1,094 | 1,581 | 1,109 |
Commitments and Contingencies
Commitments and Contingencies - Narrative (Details) - Breach of Contract - Maximum | 1 Months Ended |
Jul. 31, 2017USD ($) | |
Loss Contingencies [Line Items] | |
Litigation settlement, amount awarded | $ 250,000 |
Litigation settlement, amount awarded, per individual | $ 2,500 |
Litigation settlement, amount awarded, period of extended protection (in years) | 1 year |
Litigation settlement, amount awarded, period of protection | 3 years |
Litigation settlement, expense | $ 245,000 |
Commitments and Contingencies46
Commitments and Contingencies - Operating lease (Details) $ in Thousands | Apr. 25, 2018USD ($)ft² | Mar. 31, 2018USD ($)ft² | Jun. 30, 2018USD ($) | Mar. 31, 2012USD ($) |
Commitments And Contingencies Disclosure [Line Items] | ||||
Future minimum payments related to operating lease | $ 37,246 | |||
Santa Clara, California | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Office space, square feet | ft² | 32,492 | |||
Operating lease, term | 123 months | |||
Future minimum payments related to operating lease | $ 17,700 | |||
Austin, Texas | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Office space, square feet | ft² | 27,000 | |||
Operating lease, term | 90 months | |||
Future minimum payments related to operating lease | $ 4,500 | |||
Standby Letters of Credit | Santa Clara, California | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Letters of credit, amount outstanding | $ 1,500 | |||
Standby Letters of Credit | Austin, Texas | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Letters of credit, amount outstanding | $ 600 | |||
Standby Letters of Credit | Mountain View, California | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Letters of credit, amount outstanding | $ 100 | $ 600 | ||
$1.5 Million Standby Letter of Credit | Standby Letters of Credit | Santa Clara, California | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Incremental reduction rate | 20.00% | |||
Reduction of standby letter of credit amount, Percentage sixth year | 8.00% | |||
$.6 Million Standby Letter of Credit | Mountain View, California | ||||
Commitments And Contingencies Disclosure [Line Items] | ||||
Incremental reduction rate | 25.00% |
Commitments and Contingencies47
Commitments and Contingencies - Schedule of Future Minimum Obligations (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Commitments And Contingencies Disclosure [Line Items] | |
2,018 | $ 3,140 |
2,019 | 6,647 |
2,020 | 5,957 |
2,021 | 3,769 |
2,022 | 3,881 |
Thereafter | 13,852 |
Total | 37,246 |
Operating Lease Obligations | |
Commitments And Contingencies Disclosure [Line Items] | |
2,018 | 2,177 |
2,019 | 4,966 |
2,020 | 5,238 |
2,021 | 3,769 |
2,022 | 3,881 |
Thereafter | 13,852 |
Total | 33,883 |
Service and Licensing Obligations | |
Commitments And Contingencies Disclosure [Line Items] | |
2,018 | 963 |
2,019 | 1,681 |
2,020 | 719 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total | $ 3,363 |
Operating Segments, Geographi48
Operating Segments, Geographic Information and Significant Customers (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 2 | |||
Revenue | $ 32,657 | $ 34,566 | $ 75,727 | $ 76,122 |
Stock-based compensation expense | (3,131) | (2,569) | (5,681) | (4,702) |
Depreciation and amortization | (631) | (751) | (1,250) | (1,513) |
Change in fair value of earnout liability | (2,500) | 0 | (2,500) | 0 |
Restructuring benefit | (9) | 0 | (1,865) | 0 |
Acquisition costs | (18) | 0 | (76) | 0 |
Amortization of intangible assets | (547) | (260) | (998) | (520) |
Other income (expense), net | 296 | 298 | 480 | 575 |
Loss before benefit from income taxes | (16,624) | (10,170) | (23,160) | (14,006) |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 32,657 | 34,566 | 75,727 | 76,122 |
Segment profit (loss) | (2,090) | 52 | 4,578 | 5,893 |
Operating Segments | Medicare | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 25,468 | 24,162 | 56,231 | 49,572 |
Segment profit (loss) | (1,473) | (2,013) | 1,707 | (2,942) |
Operating Segments | Individual, Family and Small Business | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 7,189 | 10,404 | 19,496 | 26,550 |
Segment profit (loss) | (617) | 2,065 | 2,871 | 8,835 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Segment profit (loss) | $ (7,994) | $ (6,940) | $ (15,848) | $ (13,739) |
Operating Segments, Geographi49
Operating Segments, Geographic Information and Significant Customers - Schedule Of Long-Lived Assets By Geographical Area (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Segment Reporting Information [Line Items] | ||
Total | $ 13,442 | $ 11,761 |
United States | ||
Segment Reporting Information [Line Items] | ||
Total | 12,973 | 11,211 |
China | ||
Segment Reporting Information [Line Items] | ||
Total | $ 469 | $ 550 |
Operating Segments, Geographi50
Operating Segments, Geographic Information and Significant Customers - Schedule of Revenue by Major Customers (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue, Major Customer [Line Items] | ||||
Commissions receivable | $ 267.4 | $ 267.4 | ||
UnitedHealthcare | ||||
Revenue, Major Customer [Line Items] | ||||
Major customer revenue, percentage | 24.00% | 21.00% | 23.00% | 22.00% |
Humana | ||||
Revenue, Major Customer [Line Items] | ||||
Major customer revenue, percentage | 14.00% | 16.00% | 14.00% | 16.00% |
Restructuring Charges (Details)
Restructuring Charges (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Feb. 28, 2018employee | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Positions eliminated | employee | 110 | ||||
Percentage of total workforce | 10.00% | ||||
Restructuring Reserve [Roll Forward] | |||||
Charges | $ 9 | $ 0 | $ 1,865 | $ 0 | |
Employee termination costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected cost | 1,600 | 1,600 | |||
Non-cash employee termination costs - stock-based compensation | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Expected cost | 300 | 300 | |||
Other restructuring related costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Charges | 9 | ||||
Cash Restructuring Charges | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 0 | ||||
Charges | 1,605 | ||||
Payments | (1,490) | ||||
Ending balance | 115 | 115 | |||
Cash Restructuring Charges | Employee termination costs | |||||
Restructuring Reserve [Roll Forward] | |||||
Beginning balance | 0 | ||||
Charges | 1,605 | ||||
Payments | (1,490) | ||||
Ending balance | $ 115 | $ 115 |