EHTH - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q1 2020 eHealth, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please Instructions]. [Operator

hand over Sidorovich, to I may President would speaker conference to like begin. you Ma'am, Kate now your the today, Investor Relations. of Vice Ms.

Kate Sidorovich

thank and phone Inc's by webcast first afternoon Good XXXX by you. you for results. today or about joining discussion a financial all for quarter either us eHealth, Thank

its open Chief On Executive Officer; Chief lines Scott Flanders, Financial After the Officer. eHealth's call will this afternoon, we remarks, management questions. for completes Derek the will Yung, we have and

a webcast reminder, call. the our of A today's recorded As on conference call the of from our being is replay call and available following section will be the IR website website.

and Statements this to statements making relating regarding that competitive Medicare be our expectations Forward-Looking will enrollment. regarding expectations and We our including our consumer on demand, including online growth, expectations, Medicare our advantage enrollment statements events, call beliefs, business includes regarding future

in equity and Our business engagement enhancements plans capacity acquisition online Medicare our technology marketing use to telesales and strategy, and productivity growth acquisition to to current our offering generation our retention platform, customer the expansion our and customers including putting agent efforts, our Medicare initiative, of strategy strategy. invest demand proceeds

on including direct-to-consumer expenses of business. system profitability agent remote variable of Our and model, model, our the expectations upgrading our costs regarding impacts the lifetime churn, our our benefits customer COVID-XX of values, care business, the seasonality,

growth five and plan and update plans the further estimates year quarters member to Our XXXX year and guidance of our such and our the full-year revised our growth XXXX and content to third for plans. guidance, of this outlook second provide

today. represent as of this eHealth on call statements Forward-looking views

representing of information otherwise. the in future. this whether statements, You statements future in update obligation result no forward-looking events, new our not the should as contained or duty information, to or on views rely undertake a We as

differ Report to actual on section uncertainties you the may our XX-K projected our uncertainties filed XX-Q in our from risks with these relations materially forward-looking that Annual in investor website. Exchange could describe Forward- reports statements. through quarterly and results Form are SEC and and to subject risks statements Form the We from website looking the Commission, cause those other of and Securities or which access on and

will and be We filings, SEC financial the this futures which reconciliation on in considered Regulation of comparable SEC under can measures, financial on Relations included presenting each directly G. in The certain measure our financial Investor that call versus measures non-GAAP the information press be release non-GAAP found most GAAP our website. to are our

point, this Scott to at to pull And Flanders over returned I

Scott Flanders

result shaped Kate a We daily everyone. and global lives and the significant as an Corona disruptions in Virus. the first the by Thank welcome unprecedented our quarter you, finished economy environment to of

disproportionately impacted environment our in main connect important life In relevant person insurance are mission more by enrolled health right especially this with Being as highest and customer for being their to pandemic. they every circumstances seniors, than ever. the to important is segment affordable our quality, plan the this most is

Our agent depend face-to-face insurance interactions omni-channel them a in having on on their to a research plans. the to seniors without online allowing platform Medicare and leave environment sell to the avoid enroll in to to by consumer safe allows agents speaking that licensed or and phone engagement house plans traditional

a and workforce entire of major a in operations. having our is care model, outstanding of priority service transition on accomplished safety delivering we shifted agents. seamlessly including our our all to environment. undertaking our impact a to the This no our this the U.S. challenging to customers, days, of matter remote a In March, top customer addition in In with employees was

to our a to on mission. this past unrelenting acknowledge and compared our of quarter over weeks, work, major and productivity I to several average their change the resilience fact, year-ago express tenacity their in team's environment and want focus for In despite our increased gratitude first the agents routine. the my

our quarter, pleased meaningful are past to of growth. performance the fundamentals momentum continuing to of on performance. and another we in and are revenue business deliver quarter our XXXX performance Medicare for our especially Turning our Building we the drive years, two bout enrollment the strong are record to

XX%. Medicare First to a Medicare members approved year-ago, XX% grew compared Quarter members approved with Advantage growing

greater revenue Medicare will a strong Derek enrollment in lifetime quarter and of describe grew driven detail. members, at volumes by estimated First XX% the which favorable trend Medicare year-over-year, values our

to success generation demand continue diversified portfolio rapidly acquisition approach drive growing customer strategy. our our through We a to

Our and organic traffic, email, TV, response provide mail, customer digital balanced through search direct direct direct-to-consumer channels initiatives. advertising,

While pharmacies, of our unique business. and a retail affinity groups and large partnerships with substantial new hospitals, other remain strategic driver

our meaningful In the submitted year-ago. enrollments. applications assisted compared first major for applications submitted achieved Medicare unassisted of online, partially were medical first the quarter, number XX% increase of agent online we another year-over-year quarter online, to products one just in Medicare and XX% including

products quarter On major than an XXXX. for submitted applications of total medical of absolute tripled, compared more basis, online to number Medicare the the first

our is penetration reach are to As XX% we target and for well on-track achieve online XXXX to of it. reminder, the a full-year

market, plans disruption and remains to and selection large affordable of Despite market strong the available parts broader a Medicare seniors. major very healthcare economic the to with high-quality of challenges the

seniors provide significantly we be model outpace Our valuable tools an that to engagement our growth unique emphasizes and more to resource. and the social eHealth, light will and in choice to are that overall even continues distancing concerns and find market, to health driven by individualized omni-channel important the comparison lingering of platform COVID-XX, customer enrollment believe our related

revenue grew our $XXX.X first XX% results. quarter to year-over-year. quarter for first Turning of million, the Total financial

income flow $X.- from Our increase. first adjusted positive was was year-over-year operations cash $X.X quarter XX% a EBITDA $XX.X million, GAAP million in and net the was million.

the core total we Medicare the which years, offering of the represents was Medicare of approximately our of achieved strong Medicare raised growth in the quarter, last rates, our significant continued have Despite overall population the two market. an growth well-ahead in million still memberships equity growth just $XXX support During market through in country. each X% to organic

We additional build scale market and see tremendous share. capture to opportunity

XXst, March marketable cash sheet. $XXX and debt million securities our of equivalents no we in balance and As on had cash,

and our platform, customer including capacity, capital to We marketing expansion continued to rates. this plan boosting projects enhancements telesales as Medicare initiatives, retention underwrite finance online in our technology and business, deploy at fund aimed to further our of and engagement conversion increasing such

process capital of from the to the post last now the learnings operational as us annual year's for enrollment We takes as developing well important which AEP. some are in the account growth available strategy of our into this period, offering

us staffing the of One quarter remote for fourth the customer our high volume a of can successfully the in model interesting is model applications shifting to care this . potentially offer flexibility agents

agent a home-based space growth employed agents, up geographies our our overtime on overall agents. of on center and Deploying outsource opens decreasing boost new our call as reliance constraint produces by agent our acquisition, the could for office population talent productivity

While consistently had demand call our center at agents of recent had convert agents productivity applications internal into in increasing success agents, higher employed rates. we to employed our continue and outsourced

central our sales our growth marketing of a remains efforts focus strategy. of Optimization long-term and

XX%, declined members approved compared XXXX. to quarter plan family and individual the of first Our

market. losing which in by to carried in employer uptick the through and individual quarter IFP was turning likely second in has coverage and March, enrollments an saw consumers We driven

first months did the in However, offset activity not this sufficiently two of quarter. the slower

observing same for continue this higher retention plans quarter to increased members declined IFP year-ago. We as in in estimated business group a business. resulting the products existing LTVs Approved compared small XX%,

our have once and momentum, great with Medicare year for expectations significant generating strong again and this exceeding entered growth We the quarter. year the started enrollment

proving by and testament for of to a bringing is choice, provide transparency consumers increasingly convenience to the environment, significant challenging selection consumers eHealth to that insurance. this value important to we an health destination in a

that, I We reflect are raised specifically annual financing. the updating does our quarter the to reflect cash and not outperformance, XXXX deployment guidance revised of first guidance our in equity want our note to

plan period you and time of at second the annual share to last down the earnings. report we the into our operational are revised we lock by working Similar for year, enrollment with end projections our is it June quarter to

to of provides an our years. that with expansion Meaningfully, leverage potential to for continue our during platform. model online We further been captured combined of and by for avenue AEP percentage through prior capacity, has an work-from-home driving be additional our agents in available significant enrollments growth new that see Medicare profit the increased not can business telesales revenue the

perform In and well for the market. short, the to Company's demonstrate our in I we growth about confident model the remain excited differentiated proposition eHealth continues value XXXX opportunities and as

turn a Derek over And call our in revised now greater review the quarter ranges. results I first will who Yung will detail provide and financial guidance to

Derek Yung

afternoon good and Scott, everyone. Thanks

execution strong reflect Our strength first related financial safety business, public in Medicare the environment. results platform continued challenging despite underlying and our our of macroeconomic and quarter

the the growing XX% year with a (Ph) Medicare increase in a [tell] million, residual a strong recognized compared first in on approved XX% as $XX.X quarter non-commission quarter. or growth by members, to note revenue in year-ago, a revenue driven XX% well as an entered increase We of Medicare revenue during

of year-ago. an important open of was to XXXX. the members quarter segment enrollment compared this Medicare a The of The year period Medicare Medicare first first XX%, enrollments to $XX generated with contributor a approved quarter our particularly quarter million, first your growing to profit Advantage increase compared XXX%,

compared larger our Medicare quarter first to total of period Advantage percentage Medicare a enrollments attributable enrollment to approved the members, open represented of XXXX.

Medicare on estimated the number the generating XX%, quarter revenue of year-ago. members to end was increase Our XXX,XXX of first of a at approximately compared

year-ago, of the member It that primarily quarter. in average attrition QX during Similar we average was the XXXX. AEP by last during a first to in enrolled saw cohort Advantage into Medicare rates increase than above higher we to levels an churn driven

the due observed followed of XXXX the that the we open decline in by quarters. to will enrollment a is plan churn in to a patterns As their introduction behavior was seasonal QX and this during optimize subsequent member of new a you increase year. which in last churn later in first We quarter, recall, believe that likely less year seniors period in their similar consumer of

Advantage be advantage this as Medicare values case continue churn is the year of XXXX seniors it the to decline was lifetime open our later to compared to XXXX more roughly the We pronounced year's. expect for forecast currently took even platform be to with flat churn and The in year more a enrollment as in on last likely period to year-ago.

highest important and declined also years. our member one note is to year subsequent in churning base that It is significantly in

churn in churn digits. for rates our and year and have three. In example, decline XX% two year that four to beyond year year then under Advantage in first XX% member single is again to For to a average Medicare mid-thirties dropped just the

total higher of in growth a periods of our when implied member members percentage new result larger churn. we a base, a As high represent total see

average first have historical of quarter We earnings as relations website. slide XXXX posted our part by provided investor our year churn our rates on

due First Medicare quarter lifetime grew increase year-over-year payments constrained commission product average values our Advantage an in to primarily per member. of X%

As constraint of commission a are derived applying factor by reminder, a our constraint received. expected through lifetime estimates statistical LTVs

we to reflecting We expect adoption compared revenue what of approach. for estimates Since are plans revenue booked of generally collect. recognition, from the conservatism cash Advantage effectively we Medicare ASCXXX initial discounting the collections appropriate our the to have exceeded our

with paying new again has XXXX active an the approved recognition additional QX Advantage contributed or Delta new quarter quarter because XXXX of be members like every between paying applications the not result would Medicare and of and into of members in tail access QX revenue transparency members this dynamics. to all members for the note out added policy prove I of number The we in reporting that goal with beginning dynamics membership will XXXX. during reasons. our to quarter This various for providing residual of the in in

by For an a payments. application by commission receive the the also the carrier payments will new we paying this receive that between member is an when approved and rate time high conversion we the applicant possibly given as we commission as impacted lag period gets count for a

significant new paying For quarter of example, Medicare and reflecting approved a added members spillover of had QX members XXXX. first of XXX,XXX we enrollments from in XXXX XX,XXX the

during two generating effective. until between the enrollment difference prove to first do quarter fourth become to in pronounced plans annual not be when large the and the of fourth quarters, quarter, The start given in these the the metrics tend especially commissions period the first number enrollments

and XX% individual decline our business first was a small and segment, and year-ago. by to short-term a lower compared a XX.X segment increase quarter revenue IFP tail this from to commissions. group enrollments Turning revenue driven was year-ago, million family partially small by in business compared offset to This

business generating $X first segment compared million segment in to $X.X small family of quarter remained a of first quarter, The profitable individual the XXXX. the for standalone million, business profit

the the X% and increase XXX,XXX at number down products reported first membership estimated year-ago. members quarter to a business the membership quarter end estimated at plan The family estimated XX% a on approximately individual compared small Our year-ago. was a XX,XXX was to of of compared approximately first

total quarter of $XXX.X compared XXXX. Our increase was for revenue first the XX% to quarter the an million, first of

Our for all end the members. of quarter products total was estimated membership the X,XXX,XXX at approximately combined

Now I operating would profitability like to expenses metrics. review our and

quarter we the XXXX enrollment our second expenses scaled fixed a preparation period. reflect half in First operating in run as rate of our in higher annual business for costs open

in G&A third and year-over-year quarter. rates growth the and We in start anticipate to technology normalizing spend contents

in margin relative For the expect to XXXX. we the see resulting full-year leverage expansion to costs XXXX, fixed

per and which approved a per care center related member fall Annual grew acquisition increased of last by year. larger variable Enrollment The member Medicare number customer Underneath retain call cost overall as approved that cost spends Period to X% cost year-over-year agents X% marketing compared variable includes we Medicare - year-over-year. into

to mix a continuing of decline costs per March and This associated in channels, reflecting the marketing reflect our increase member with back this volumes in also grew in Marketing coming model in environment. advertising from increase some Corona remote with crisis. initiatives our of channel approved light from the Virus our X% contribution pull enrollment that partners in on call moving digital a center costs shift in primarily

continue total variable will Medicare levels that XXXX driven to down member primarily cost we in expect gains by acquisition For to XXXX, further approved the per full-year productivity. come agent

net the million million, of $X.X of for XXXX. $XX.X quarter million was first first GAAP was of for for to GAAP quarter the net income first for XXXX first of EBITDA to $X.X quarter loss the million XXXX. $X.X quarter compared compared XXXX the Adjusted

intangible adding adjusted and income. taxes out net liability, calculate depreciation, stock benefits GAAP incomes We amortization EBITDA of compensation, earn income change in for amortization, our based by fair value other assets, to

was million, internally which Our XXXX. $X.X costs $X.X operations first were expenditures, $XX.X of compared quarter include the million first Quarter first cash to capitalized from flow for developed approximately quarter. the for software million Capital

cash, As of marketable March XXst under had and we equivalents we in debt had XXX no line securities, million outstanding cash credit. a and of

long million $XXX significant next commissions also balance expected receivable approximately $XXX that of in collected is dollars and term sheet balance comprised a of the $XXX XX-months commissions Our reflect million receivable. over million

offering We our in to-date, updating our annual guidance our are accounts XXXX reflect to the March. share diluted outperformance and we completed an equity in following that increase

the not As working the AEP plan Scott as provided guidance upcoming by mentioned, investment this for the full result increased a does offering. capital of reflect our

now $XXX $XXX guidance compared in now of are range are to be to for revenues prior $XXX be million expected to We a range forecasting million, $XXX revenues $XX Individual, in of family a small to prior million prior to to million the of XXXX range range $XXX compared million, in Medicare to be segment to unchanged $XXX million. compared $XXX of is guidance expected which segments a revenue and is to business of to guidance. of to million $XXX $XX million, million.

for We million million. to to prior range a $XX GAAP net of expect of be $XX guidance million range $XX $XX million, income XXXX compared in to to the

million, $XXX $XXX in guidance expect to million. compared be million million $XXX a adjusted of to We XXXX range range EBITDA of $XXX to prior to

million, is in million million. and of XXXX $XXX which Medicare to $XXX in range be segment profit product small range to guidance. $XXX be range is now to profit compared a million prior business expected a to the unchanged $XX Individual, $XX million to to compared $XXX family million, expected is guidance segment of of to

unchanged expenses Guidance amortization $XX and were corporate and to compensation services expenses stock-based million. depreciation approximately excluding remains at million $XX

income $X.XX share share. to in GAAP $X.XX range to per share to of of expected compared $X.XX Non-gap be a a net diluted range income share. prior range expected per is per $X.XX, of is to to net for be $X.XX, to $X.XX of prior to diluted guidance $X.XX in XXXX to per compared guidance for XXXX $X.XX

operations $XX million, million $XX guidance $XX $XX expenditures is expected to is in used range million, compared range is in $XX XXXX million Cash expected Cash used million. to from prior to which a of to to unchanged capital to for million be for of now guidance. be prior $XX

year, of the Finally, I quarter to with in year-over-year in particularly XXXX. times second like Massachusetts lowest Last to second other our center trends. Westford trends, the May our in growth would period that comment XXXX previous comparison Consistent year. closure volumes are quarter on compared was sequential at sales the third week the seasonality a enrollment Medicare by of and included of the aided points

year-over-year of the quarter to would degree the comparison the While in increase due same last to to we growth remain just second benefit of expect weaker not rate strong, QX year. period

quarters. is [tel] revenue a posts we lower is critical majority productivity will in which our second the last in to be expected decline our selling agents the quarter season further QX, year, of to OEP, agent volume base sequentially. (Ph) in-healthy expected Second is third Similar during cost retaining in but also to during the and to adding increase result

a As quarter. we on a mid adjusted millions we second year-over-year revenue and approximately dollars a single-digit to quarter expect be currently of expect EBITDA basis XX% for result, growth our loss the in the

the quarter quarter. time anticipated plans refine fourth for plans well includes report. investments the an outlook those plan rest to this second as as at those We guidance five-year further to over sales the of provide that XXXX expect earnings our the quarter of continue to investment and updated results and marketing for We of our finalize updated

and may judgments of which judgments and current our based remind that result and current estimates, you assumptions in on may of our in assumptions comments change undertake no guidance. guidelines we are results inductions want comments any our obligation or changes our a our business estimates, to actual differ at time, update our our I as these to

closing call turn will I short now then for Scott's who and open make up to Scott. like some would to back remarks questions.

Scott Flanders

Thanks Derek.

Before prepared of team of ever our we global circumstances. lives Q&A, our Virus, affordable mission that and life resolving the wrap every highest the for most daily into from our our the person emphasizing to disruption get to by in quality, like economy than insurance I committed health their remarks Corona the more face connecting today the is up to would with

The most strategy of things our are should investments call to we strong of and are operating continued you out important by know clear achieving and targeted making improve growth. the executing coming a on fundamentals drive to this the metrics business across business

Any way reflect you we cut financial progress it, significant the results our are making.

agents customer effectively adds and to both engagement have we and in opportunities serve ideally positioned XXXX future. safely in to now leverage significant margin and platform omni-channel revenue work-from-home of and is the addition seniors more for the our capabilities The beyond. Our

additional annual with conjunction year's outperformance will XXXX updated be and contemplating These are planning not second in guidance reflects to-date, we results. for our investments provided enrollment period. the annual this Our our but quarter

value our positioned continue So challenging on I'm growth and environment efforts are expansion of of as shareholder to well our margin in driving growth, proud we that to deliver the this we strategies. execute and team believe

Derek I open questions. to that line. please look With answering and Operator, the forward your

Operator

Credit Singh first Instructions] Suisse. Our Jailendra [Operator is you. of from Thank question

Your line is open. now

Jailendra Singh

guys. hi lot, Thanks

does include for XXXX you I increased for churn it some like the the follow-up in in but not comments particular. in on guess well. the it release cohort confusion. the clarifying not the around those that that on first want investment, include as I the So QX looks to does your quarter made your thanks guidance creating benefits was comments investments press

from you last you Did not capture point what may year to Can on if saw build color this this seniors. among review be your that rate? and your the is perspective. to a that churn It I'm increase bad trying provide outcome improve get

your rate recapture bout seniors on those seeing your the so us you long get on platform, As are help stay as what us fair books.

Scott Flanders

did guidance you the are for your to on we in to And we intentionally point amount full-year of just correct and only very first Right beat by QX. Jailendra, well of our that then increased the clarify consensus our and the agent and increased that same had our when Xx staffing by full after plans thing over XXXX marketing amount we mix QX in call we our earnings in place. QX

we just is and be that process came to going $XX year remind $XXX after at to guidance. our a million we upgraded beat and last same everyone, to guidance year $XXX QX, tail without this undertaken increased The adjustment, million million, in to revenue

We and of what on not end counting of to are in position QX investment process increase the the type we exactly would this of same be be. the were at able year. in level the So quantify to revenues

of for in to of churn. saw we our To enrollment your the And an that was to plans. enrollment XXXX an come in XXXX, And model. seniors marketplace and other quarter question QX on compare elevated is Churn because are shop first where aspect the for churn we heavy switching. For CMS the opened up of off

same was recapture The recapture against this this X%. year. happened rate year rate a experience of XX%, The

only of but very This elaborate Tim, is into actual the this? let of area financial is someone our our for I assumptions and rates. all the you an churn baked improvement, up. modestly LTVs all we opportunity of can where see So accruals on

Tim Hannan

Yes, is by said the is Hannan. saw as Tim better. with excited of same behavior last What what extra data. understanding know, we slightly Scott recapture and think This we our are you was we saw year, year Sure. this I was rate

to to these be we able think how metrics understand during make period. on recommendations enrollment better able to the will we We go annual be improve will overtime, because and

can as target plans. adjust needing to should their we then potentially our And which or the OEP, of in members target

and now have, we scale a breadth it and animal we rate our we of And learn choice the of can part life a metrics. So here. faster with is think on improve at these

Jailendra Singh

advertisers all number I of want about the down. then customer acquisition advertisement to for being Okay costs And with thanks ask that. costs, the

customer benefit getting companies in your easier curious guys. could other as Just costs, various at some ad for on on around you see spending. on a If you be environment level are down recessionary that? thoughts thoughts Any high acquisition cutting that a

Scott Flanders

Yes.

So elaborate. Tim I and us. Tim for is who all of of chief Hannan let will all officer runs our revenue sales marketing you

Tim Hannan

Sure.

mean think different will think I by on disruption and I So channel COVID-XX to it differ could the it channel. from what

So places, open in in we opportunities in disruptive us market some it before as may other Derek or experimented But for inventory maybe in behalf. been had now that hadn't out places, noted on can places up with. advertise is to priced of certain our who to his comments, it partners

advertising does us, on to based So, vary our speaking, see to we to it be will channel-by-channel but generally and make available more what investments what adjust how inventory it observe. will we watching we

Jailendra Singh

And where XX%? By percentage curious you enrollment race of you any than the weeks last online Was higher with of XX%. break to down two weeks enrollment different online here of if on do how my question March? Just last respect much March? in your was in was there the it chance have Okay. last any percentage two

Scott Flanders

Did notice you Tim. anything?

Tim Hannan

during when do the the what annual exist. end but last see is in agents the pronounced It are - the does as it we of area, not a occupied. We very quarter enrollment as surge more our see

Jailendra Singh

Okay. Thanks a lot.

Operator

Thank you.

comes Craig question of Hallum. from next Our Sutton George

open. is line Your

George Sutton

anything with additional third-party this an referring give could more was technology, and kind if just further I'm of capital, or of you the I you. business of technology, internally built perspective is you you to are generically perspective more wondering things the are agents angle on types the M&A that question. the grow Thank from of thinking to contemplating us

Scott Flanders

Thanks George.

next we we see organic $XXX quickly content possible very raised two need and all to So, years, that XX% - have this the percent for in over year I are we get because script pointedly the online threshold. my of opportunities getting our million, tech as contemplating enrollment that, and not the have any commented growth fully targeting the budgeted spending we M&A.

half the from quite in will run more on G&A just you see have second the bit first we all We half in half we the need What also in and revenue XXXX. had year, is right last of our brought of the that operating the growth. a leverage

to maintaining investment go is objective agent and going additional So, overall the us our into with go customer it acquisition additional is going the into of to unit capacity economics.

George Sutton

be question got Medicare a wrong to for seniors Relative provide some was into lot the a may a expected issue plans which Tim. fair amount if outcomes a you in the that of turnover in of medicare.gov of perspective you do This obviously to curious terms QX. in have coming and Perfect. the of on And I'm consumers any benefit in QX, significant was those you. felt QX? Finder, - to Plan

Tim Hannan

question. Good

and see come what seniors best being during as not to undoubtedly the would did shopping anecdotal, it. be in enrollment part from plan. there has describe feedback increased say to right So, probably that is, would in the period, We our I of would be way QX we described the open

haven't we platform, the bullishness change think we I our in much. Plan hard some in that way, that seen benefited quantify for we mean, exactly market. Finder provide So, generally, And I would changes on we on how significant but that from any our Medicare the to value us think,

And disrupted has in anyway. so, not it our plans

George Sutton

answer. appreciate I Okay. the

Operator

you. Thank

question from of comes Our Frank next Capital Morgan RBC Markets.

is open. Your line

Frank Morgan

cost Good I work-from-home out afternoon. the first in to number guess question, a this you call a of much quarter? shopping on impacted how question. Can more migration list

Scott Flanders

Derek?

Derek Yung

continue the as Frank, see really can Yes, it we in year-over-year in and even take workforce I work-from-home. an to material, because seen physical have that. move comment not a Scott productivity location as into from It the earlier they increase work-from-home we is center call

really there the and logistics the them and on more moving cost are cost the is technology home any So to related moving material. side really

Frank Morgan

of sort seeing in different of are retention past and the across television the or and from all perspective? okay guess years difference the groups that the digital any you channels, advertising about, over channels noticed email, you mix you you. think have any whether and what the seen have or or it several I those change amongst is mail when in Got direct I variance

Scott Flanders

let handle will that. you I Tim Yes.

Tim Hannan

Sure. Yes.

based So say I you are we portfolio the performance ebb flow we it approach why investments, and know, we that and would have seeing do. the our is on that

direct times And are something so like into we more there mail. aggressively will that lean

particularly on TV We And new we see roll more creative will point will stop direct out creative will as that being take quite at volume. effective. response a and that

So changes we continuously downstream make any channel. want of monitor there do board. in to aren't we the enrollments very have too quality the or channels. quality across on been of enhancing We enrollment our become significant the are our variants the we but never dependent and general adjustments, In And experimenting channel-to-channel. one

Frank Morgan

Got more I noticed, I your capital, more included your guidance I you. negative. will and haven't a hop. anything and flow did but ops the bit notice seems just you in from cash for around guidance obviously little One assumptions

So I just are off. hop will they color and any

Derek Yung

Frank.

the So to to drive more is growth. additional investments actually that completely tied made we in QX

Frank Morgan

you. Got

Okay.

you. sort the will investment you if Thank cash operational So the flow. that of flows

Derek Yung

right. Correct. That is

Operator

Thank you.

next of Suntrust. comes question Our from Tobey Sommer

Your line is now open.

Tobey Sommer

work-from-home maybe that to Thank and profit you. give was some if home revenue revelation kind opportunities you additional color, agent us of of with examples you. you I that can wondering revealed could some has

Scott Flanders

nothing have flexibility productivity speak the let my more. impressed you at effort possibilities that stress week eHealth it do, I it I fact me will not was I would I will Yes listening, strain. might I wouldn't probably are But what was getting done done or say, just to But Tim, in specifically a I a and tenure Herculean commented a for seamlessly. afford of home Any the and before that work turn to want It without within or and pleased that was diminish, some us. eHealth that we that Tim. of executives and

Tim Hannan

Sure. I that agent real the it our our for been the have constrained is estate Yes, affords Scott. Thanks internal we one number flexibility by us in centers call so think counts.

we training make effort But so And effort. last we and from space. saw of into Indianapolis to to through order new the went in upfront opening that recruiting year, up up in create performance agents outstanding we sizable headquarters those that significant a investments it, had

at from we work-from-home this a much can our have asking we point. And With from than been to lot have been able a capability capabilities. work-from-home of agents geographical recruit for base recruit where broader a

a agents we the long to into So come not by to retain haul way need high to flexibility the giving this us performing office. the gives over think them

we and have So license we expand our And looking for agents remote as our that this on our of higher increasing base can those we their of been train, a we agent conversion higher have better, that because will will we agent are explore mix investments we see opportunity, sense will are far year. how all partner our share we internal how make will than performing at will basis. But just rates. better our how agents agents return appoint a given

Tobey Sommer

their were As change that does quite discovered not this as a the others perhaps competitive models landscape follow-up, flexible?

Tim Hannan

and Yes, have in this did and we dramatically information we strides conversion competitively. are I I you improving will our of comment don't agents, on made have more our tell a productive. outsource turtle lot deck, though still productivity in agents

limited, increase use higher of captive to does space to with agents to a that to extent and our and higher we the more this with us outsourced virtually space hub spoke increases, to not the quality And mix scale agents. are scale and productivity. versus can that that us more we expand without so enables extent enable strategy And

unwelcomed unexpected otherwise what an outcome was it was of So an quite crisis.

Tobey Sommer

experience for is? for opportunities long-term your question in the view informed for me, skew Last online is what your enrollment online

Scott Flanders

more proximity accelerate I Tim well. Well, telephonic even the online from mixed perspective seniors are shifts AEP know less. and our view to in both fears is more online answer ask experience would important experience enrollment as that and important, Anything is will here. we be being because that to into weigh our sensitive likely of my coming is I not you to and Jim, strangers. in and particularly to online shopping would think is think going to We of close say? what

Tim Hannan

those No, comments I would entirely. echo

online. preferences think of the all The but to will and have two Virus we telephonic are want it seniors, are would not exactly I ramifications models on I behavior and sure the of effects that Corona the shopping have and

that so centers, to online to year, environments through both our do use to the will in think technology call improvements we experience we we but both agent make that just the And in are positioned also workforce to do the to our with described, agents we the well the well.

Tobey Sommer

Thank you.

Operator

Thank you.

of question next comes from Styblo Jefferies. Our Dave

open. Your line is

Dave Styblo

proceeds office weeks agent using know to the make those Do just wanted agent those the and towards efficient in into some you to not just with opportunity there. for model model activity folks And talking anymore Hi there not XXXX marketing. you be some you the guys question. about normally a to comment what the I last folks is there. home, from appreciate Corona, when new estate the being typically the count hires. that maybe would of thing go foresee would. hire do the folks could I of would than expect? really is have talk you for five going you perhaps an you the agent real than working to folks the of earlier Thanks I'm earlier and back to that and million about on vast setting now in or work-from-home? you count, expect agents if count else then opportunity was spike we bit you unemployed to grab really is an are But this as wondering while and the little sure you unemployment, more finding need the one normalized are majority sort of more you those the are

Scott Flanders

calls the in listening you late. Well, been our of have on of some must internal

than of do higher get this think last summer summer this a is yes, things. some of One, time, of caliber will So Dave. we agent unemployment. I real we think I because But, two did

compensation. base reducing not are our We

In places are fact, increasing looking it. some we of in

to and enrollment as of more process are them. assisted they imagine more results not you We which looking agent and can any the able as agents calls, more in are our for compensation, decrease using are more commissions to online efforts, our of

ask, implied corollary of it sort a second you is didn't of this piece So, but the that in your question.

turnover. We conversion is of seasoned rate higher of the is That a an have in agents because agents are seasoned to with also season. than year our their more a XX% unwelcome aspect tenure lose expecting than model first lower agents,

to qualify recruiting, wish fall. instincts seasoned down turnover will agents go believe but our able and we passed we the us more will be their going which that as And licensing determined and speculation, training higher the this, I think by they all to expense that recruit and caliber we will exams, which are complete and have we is this so, more rate agents into give reduce at our

what So, yet, that, of that going is we definitive factors. to are by are QX we guidance early in after the because this our part reason don't and these all to so still know were we amount exact just increasing be of we

Dave Styblo

on the bit the that more in are that slide And you channels and have little any while to got you is those able existing capacity of it. to at is working those? pursue it are some what just well. because finding Got new been Okay. but Is there to on pursue look element past in guys it spend, down, where, commented to really there money coming you then or emerging you know able apps costs been you some that really that, marketing is channels going are generate the we about spending, a opportunities we likely submitted more limitations about the new spending more haven't some

Scott Flanders

you I be on defer that him. to the to like Tim would I for will to Well, answer, so hook

Tim Hannan

Thanks, Scott.

two there. So, first QX, did would not what we performance in are the for Corona working say a Virus affected significant in into lean in was by way. I And terms months of we

some seen last in is six cheaper I advertisers we the inventory and have channels. back change weeks think what make other in pull

some TV So, particular examples for us would be placements. Facebook, YouTube, even

these would and at a making on viable us for go-forward to be learn in at whether places basis price. investments looking are We what they

it can combination of what we what know, a portfolio. unique So, into broadening expand to but we moment is this to our horizons during see leaning us our learn

Dave Styblo

one then it. advantage. is the Got And on LTV for Medicare last Derek the just for

X%. rates digit. in I it your was for think think mid-single the guidance year know I still I you despite brokers is flat there, I the up are XQ for And mentioned up commission think

conservative is wondering, that there some just element to your call I'm increase something of by that - a posture in cause mid-single that more it other or digit. would So comes end not on that is

Derek Yung

Yes.

causing reason So were why cohort. is increase because are year-over-year rate in flat we of of you the increase for was QX - much right line. LTVs the really of LTV we taking periods that seeing that seniors increase largely right, that open in see ADP pretty higher forecasting are churn advantage are we And MA driven our that enrollment the the number of by the is of what

want. the here switch terms that normalize won't expecting that seasonal trend they we plan this there are they when certainly is that kind of when will after happens can when that when that last be in from We and which they seniors year to is in return, and that will which the of then think on out new see we

what anticipating LTVs. are is that So flat that and is what we forecasting

Operator

Thank you.

Hill from with question George comes Our Bank. Deutsche next

open. now is line Your

George Hill

I QX. we start. that the to model in on any LTVs Hey using taking Derek questions. question for started from in meaningful the guess afternoon housekeeping QX thanks there good Was just new And and a guys impact

Derek Yung

George. hey Yes

enhanced for rest out was America not rolled because So Advantage for Medicare we estimates IP change in medical and that QX. also Medicare adjustments million Advantage rollout that have model recorded did the the part We models in were of products. products enhanced for our major XX.X of that

and ongoing ensure to enhance we for a And we in appropriately are or those and But enhancements continue reported conservative in are to that did QX that LTVs we that and of the not terms significant increase successful. work estimates adjusted. decrease to in LTVs be do our to produce had

George Hill

broker for to maybe But call Okay. across the little bit COVID And guess on business Scott the given real thinking you QX because dates you changes meaningful? the become be the of the I and guys the question the engaged ground has between question the the this know of as week you ended country. in I it able would that you, recognize what is whether online happening hit customers on that now, into a of of enrollment that have you to at of data, of I kind how anything that the really to are talk meaningfully impacting kind way of crisis. time end up rolls March I'm of is third COVID in that kind I moment kind and like which just the about saw something crisis a speculative before look of permanent. don't kind

Scott Flanders

way be say have this would year permanent. as about we record the the early we optimistic respect latter going to with factors a field question, to I to enrollment I’m agents. that talked year of because very to I'm will too speculating Yes, are what to be

struggling think We appointments are book will hearing to reason we anecdotally that seniors. that It and stands they are continue. to with just

at finished And you weeks has work-from-home would God high here for momentum wave the the all Tim, forbid in our shutdown seniors. would further? of those March. that with comment We few in which productivity continued strongly there that We April. that weeks we well three of end - is first for second think model isolate and the telephonic. fall further plays of a that in online

Tim Hannan

before, mentioned I in enrollment say the But at see it wouldn't than more did a expecting. the we end online was I quarter. of we surge Yes, were

saw we we year. we again that expected typically it year or - So see to the this at that see last and

become outreach work if to continue of channels I before broadening affordable. mentioned online channels. those will some And on in We our

like and outcomes. for able are the shift are we may to with our behavior accelerate online where online. but of a in number of way sort yet, in we feel has a prepared durable some be we And terms changed making terms consumer that of said we of of as improvements sure it in not Scott how we are to But experience, to

George Hill

talk Scott don't perspective? ready But might follow-up. a you be are know, yet. considered ready I numbers upcoming talk about for from the at I AEP you what changes And strategic about Okay. a to know guys to the just quick aren't all

Scott Flanders

in we And up last up significant is Yes, because we were capital doubled and external agents. that, And one the XXXX. after not only our year, most agents just barely I stood we our Indianapolis, quite internal you this able do know agents think mean absolute our tripled raise when to we all internal which more out versus an agents would adding agents we that in believe external significant than up the George themselves external percentage in number, agents. do increase I end will year, end we internal quite wise, numbers sorts will

George Hill

you. is helpful. that Thank Okay,

Operator

you. Thank

next question of comes James. Peters Greg Raymond Our from

open. is line Your

Gregory Peters

you Hello. A capitalists? see versus agents I about number outsource versus of my if questions the level have you been talking asked. business a outsource from are just captive? curious, has your Wondering was of different produced churn

Scott Flanders

the don't I to data? know answer Tim, any that. do you have

Tim Hannan

don't any looking always we we mix. our on the data are that specific ways improve We can for have quality that of

I nothing And can out call that, so enrollment method, adjustments that it to marketing ways enough that agent at type, make improve here. are significant we channel, we but always looking would

Gregory Peters

asked. I just I would Okay. thought

we year. this is Do Can year? variable enrollment in this when refresh is the that we going and please? you and be that year could last beginning And I quarter. last is the the think you customer marketing costs on down of quarter determine just flow Derek second customer went comments, said noticeably pretty see that to you members costs probably that too sort year up that, tracking up approved of So fourth same before soft me maybe the inched and care dropping your in expect you said enrollment it care be it versus in the that were third and anticipate per you

Derek Yung

so I Yes did. Greg,

the look market driver invest and marketing to we more enrollment in probably care our do original reduction, more and cost also variable marketing initiatives customer share revised enrollments. of year. guidance, have and to component will was down compared care between per the in to to last component customer our guidance, we guidance to anticipate be total capture because member And see component, our to the marketing flat, and roughly original annul Medicare our plans in guidance, we have be So group that

XXXX handle year, so ensure that lean we meant capacity, you last, we on the if had that the remember had in The adequate and capacity in in which money did before XXXX we that to and order we early the to left agent year AEP, last in table we year. may And to do AEP. that heavily last inadequate want not agent into staffing demand

Now on vendor in incur we the have adjustments we a early doing cost, learn additional And bringing drive to this are allow and safe external part the lot side, are more agent process and people of to us side, those in were learned to really that would we vendor able agents investments that, addition what planning liked. technology is, too of especially on make or more we that in we year the productivity. would to be that

Gregory Peters

per costs peak But the quarter see on though, correct? what approved still in member customer you you should care third have done the based enrollment historically,

Derek Yung

Yes, Yes.

apologize. catch to new the that weeks I on prior prepare and to bringing are start I do they part. And when Because and didn't they can AEP. licensing are they we From seasonal they agents So, a in appointment basis, many absolutely. that, not for training for force. sale spend and productive,

that spike would So, number years. from Yes, perspective, to again, a seasonality prior to similar we see

Operator

Thank you.

comes Our Evercore. question Mike next of from Newshel

Your open. line is

Michael Newshel

highlighting and a said specifically as avoid you that due have if But safety to there are some logical COVID favoring to aspect? limited some marketing going and there message you you. an Thank will behavioral face-to-face. be Scott, internet like change as telesales

Scott Flanders

to whether and that were I with our conversation take one competitors, Yes. bold approach my a no. had is we actually of enough inclination asking

Michael Newshel

It behavioral a will natural be change.

make to sure you. think know about people I

Scott Flanders

to these of conditions that a we naturally. in online and just something is pace we think word I telephonic it accelerate and enough in have tailwinds and will happening secondarily case, this Yes, mouth think been year mix shift this has any

Michael Newshel

licensing the some due remotely higher as or think exams there? is trained is you can from little I the you are would training agents? how like logistics get but bit completely talk disruption now have mean, employment you to larger a I and that can home more how draw affecting of there to pool the affected, a just work people it have sounds well, and get and recruitment COVID just you And like at

Scott Flanders

will Yes. Tim, let answer. you I

Tim Hannan

take will one. that I Yes.

allow still to is it say would the I early haven't fourth a early, ramp I the say, workforce. because we we into our caliber would quarter. agents will are feel indications begun it our high recruit on So, us bit that, little full like towards

We regimen remote. been able our have to training move to

So, some we to up get training remote of first have agents this right and a deployed the on ones regimen now year. speed be to

that, we agents. The licensing state have terms already and vary recruiting we by and will or of licensed but we are confident evaluating that alternatives solutions appointments feel will we in that need

still are overall all positive be evaluating be is high going quality net to and we a outs, to to internal, attract caliber us. we ins but more able agents for So, think the

Michael Newshel

be is - whether on going last because like will worried like can You there the guys face-to-face be you are do will easier that just question, they think mentioned like do recruit we is just you the on to know but do they more [indiscernible] - about, know sales? you traditionally

Tim Hannan

Yes, we definitely think that potential a that outcome. is

we that So recruit we are, see we what if is see. to will watching as we be

Michael Newshel

you thank Okay, very much.

Operator

you. Thank

Jonathan Our next from comes question Barclays. Young of

Your is now open. line

Jonathan Young

me for here. in squeezing Thanks

a a you help try taking is right goes plan into XQ you just that there? are of experiencing member kind of kind that where the so to AEP the - rates with are without any kind are of churning in back coming the thoughts any about anything Just this that going could up steps retention you improve kind think churn you of AEP, you to year, as later there

Scott Flanders

our the tools not making into seniors the is some deployed but agent those, we more of you investment support of support right we get plan. will of must Tim, actually Yes, in tools I increasing elaborate. have of efficient concentrated example have another and we and so have them an agents days recommendation, making just the early let discussions, some that in deploying better but absolutely be we the technology tools in listening where remain our you past, to also internal give decision end been to

Tim Hannan

is that think right. I Yes,

their improve or observed through As we two change will have the we doctors, the I drugs, terms from because first from to do people plan right plan AEP data to into over complex year of this is recommendation, more in their area. into year. years could we of experience we less introduced the It how go plan and a what around time it now last But changed how new earlier, that understand their the the have we our of OEP decision is process. get plans making said

simple beyond can that, the our during in a OEP. breadth often get suited going win So, we we will at wiser choices this choice, we will also we a been know our not with than that and who recommendation I move didn't and change better them better is we have book, might and AEP who more we be policy think of know a look to then as the that forward. better And

help we So think will do fronts the to OEP both so. the and just us from use on better those data we we can acquired of do

Operator

you. Thank

Singular Springer from Research. question of Lisa last Our comes

Your now line open. is

Lisa Springer

of cost those to more all care is the the in technology setting the we you. that and the see quarter? going taken people was for Thank higher for work-from-home to now, pretty that are costs much are question second of My main up quarter, cost

Scott Flanders

Derek. ahead Go

Derek Yung

back it as the not coming material and this was the area. to the they that. in run additional expect It guidance. we and incur related technology share our increase services margin rate to XXXX In move unchanged investments year, revised expansion cost is not remains were expect normalize still for revised our relative We we driven and half not did get by leverage into of corporate our expenses do but in work-from-home The in of imply was technology to year. to costs, really our guidance, the the fixed

Lisa Springer

Okay. Thank you.

Operator

you. Thank back questions. any for turn showing remarks. over further no closing to like I’m the would management to I call

Scott Flanders

And at QX you appreciate you insightful we the July. we t look and call the updating very all questions Thank to second attention paid you everyone excited forward the you everyone. and the about for earnings are late quarter Thank today eHealth. in

Operator

and today's participating. gentlemen, this Ladies for concludes Thank you conference.

may You disconnect. now

eHealth (EHTH) 24 Apr 202020 Q1 Earnings call transcript