EHTH - Earnings call transcript Q1 2021

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Operator

Good day. Thank you for standing by, and welcome to the Q1 2021 eHealth, Inc. Earnings Conference Call. [Operator Instructions]. Thank you. to conference like speaker to now Ms. today, would hand over the your I President Relations. of Vice Sidorovich, Kate Investor The floor is yours.

Kate Sidorovich

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

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

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

increase financial business, our member guidance. and will regarding Medicare XXXX demand, acquisition consumer of statements And future positive recapture We statements technology enrollment on churn, enrollments our statements values, and online seasonality and quality our operating opportunities; costs, our our expected our grow and and and beliefs and for financial retention our XXXX, that enrollments, force, year rates; engagement; agent impact Medicare full business, expectations annual our finally, expectations, of deepen enrollment regarding our operational including include on the expectations forward-looking investments business; profitability our including making internal events, to agent initiatives the our in member our relating lifetime growth, performance, of second productivity this be expenses. to outlook the estimates, expectations regarding customer market quarter call our period ability regarding and

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

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

that section that the on can included from SEC be to such other the Information proxy meeting in And and with the identity carefully all annual of our the section year of participants security proxies. shareholders file on be definitive or XX-K its website updated from proxy the SEC the XXXX, Commission, ended Relations the a statement in SEC. filed forward-looking company's for and through XXXX on participants risks advised XXXX officers of in actual directors reports intends otherwise, proxies XX, holdings in which they with can statement direct and statement and IR XX-K proxy in with certain you Investor read executive Shareholders website annual company their Forward-looking are contain of report available as SEC on regarding these SEC the connection strongly or Please encouraged Form These access the information could subject documents to We the and materially from entirety with in any through solicitation Shareholders. from obtained uncertainties projected company's the XX-Q materials filed found at company's the Form their December statements. company's our file may other of the the important in for will in of and Exchange and statements are results proxy website. report or the fiscal and to of and uncertainties annual our our company, those filed such the meeting differ annual Form other information. cause Annual describe for to connection website. be solicitation risks are its to materials in indirect the the charge with and the free definitive SEC. the XXXX quarterly the statement The with company's of or Meeting once with definitive by be Securities interest be sec.gov

We are will G. considered that under non-GAAP measures SEC this Regulation presenting be certain on call financial

measure directly press each Us financial release to in can our Flanders. most SEC found turn reconciliation and heading the of For in of section under financial our this And I to a comparable information filings, corporate the at to non-GAAP point, refer which the in website call the GAAP the Investor be Relations. included will please About over Scott our measure,

Scott Flanders

expectations. with welcome and to Kate, quarter a significantly XXXX, you, exceeding Thank had enrollment first start We our strong growth Medicare all.

positive people First And health business in over brings shop to evolving towards long-term a of insurance market. what past insurance quarter enhancements consumer-centric and technology continue that exactly way we to and operational enrollment Medicare are results deliver market. that on The have the are and a several and expected the strongly that choice, we we convenient to Most e-commerce robust our as these center is is eHealth initiatives Health number benefited are call positioned a consumers introduced is scale broader impact demanding. for months. changing, a transparency coverage supported from insurance importantly, capabilities. increasingly to process distribution and by model, health

our As and year agents enhancement this productive, enrollment increase make to our is customer operational profitable we further drive of continue call deepen more center to quality our growth, key one of operations priorities engagement.

stronger vendor significant our robust and shift the agents combined a This agent are shift our approved external quarter, agent We vendor we quarter initially away to affected a in are productivity process, a we from agents execution increase our to the quarter model, first primarily us. driven reallocation accelerated that toward in results. seeing predominantly average led in-house first call fourth cost that first of behind the compared third-party with underperformance During expected quarter telesales of now the issues center enrollment reduction more XXXX member. growth by a XXXX, Medicare believe per and acquisition than Medicare in

was increase. the million, to Our the EBITDA revenue performance quarter $XXX.X exceeding strong quarter, XX% Total contributed revenue, first first adjusted year-over-year all and operational in expectations. with improvements financial a earnings our for

adjusted Our EBITDA first and quarter was $XX.X million. $XXX,XXX, GAAP was net our loss

Medicare reducing per costs a grew Medicare agent XX% productivity. declining this approved growing compared per by to Medicare strong with total driven member our enrollments the acquisition Importantly, growth Advantage agent XX%. total cost ago, enrollments, XX%, member XX%, generated but We year we by while

First compared quarter that a that of through recurring generating operations commissions member an to also $X.X positive our to from cash and year. this significant continued in $XX.X is base per exceeded flow observe ago, expectations March collections in million at member million reflecting year we cash Medicare growth our cash increase

program. including significantly commission higher per to and traditional MA larger compared payments customers enrolling percentage benefited these who typically first are a of Advantage new to switchers. collections Our seniors Brokers XX for cash receive have rates paid year for Medicare member from the enrollments, fee-for-service consumers turning from commission new to moving

approximately members XX% MA of our of MA to with effective policies date total an January X, New represented XXXX.

applications, partially the XX% applications During growth. first agent-assisted online of XX% for enrollment submissions, unassisted Medicare up of fully Medicare Online applications a The year-over-year to products for quarter and XXX% number medical year Medicare quarter, leadership. overall our represented our major well we e-commerce above including advance from ago. unassisted our continue total grew products, medical major

to costs, still our pointing member cash generate total in retention potential and enrollments business. contribute While to better of tend a them significant enrollments, share have small expect XXXX. flow revenue our we Medicare lifetime fully and commission million lower acquisition relatively to values to These per in higher close online earnings unassisted to generation $XXX due applications of

who now market. center These which engagement gaining, relationships business our in has metrics data-driven the of customer XXX,XXX helps year and October competitive our and platform us been enrolled. trends launched a Our long-term accounts, customers with for we that last the has which traction demonstrate strong secular significant differentiation eHealth represents over with aligns in create e-commerce

that fourth Medicare biggest related we XX% XX-month more quarter on preliminary retention relative impact our a for was quarter recapturing churn were last AEP. to increased ago, churn Advantage switch trend MA trailing this members year primarily from who in contribution during is of declined estimates, clear is enrollments by of XXXX mixed. enrolled older we compared to XXXX. The cohort for member estimated was on online that successful Based year plans. better plans positive cohorts in First What driven to retention XX% from members to the

all we application switching plans a reminder, as on our count new churn. platform that requires a As

our rate For was the compared year XX% XXXX, full to recapture XX% XXXX. for

are quarter with LTV to metric unit While which higher LTVs, being they do policy into higher measured not We first cost improved enroll. a ratio acquisition in to our leading to and stronger, a profitability reflects acquisition on generation that members important the stronger translate considerably cost stickier manage to of recapture at that potential on flow volumes basis. business rates, costs and with Due reduced cash we has new impact reduced business our members. the economics do an basis, cost acquisition rates enrollment acquisition reflects relationships to enrollment, agent year-over-year Medicare productivity per our improvements underlying recapture ratio and LTV

improvement to to compared expect XXXX. year another the AEP We profitability member and see fourth full XXXX during the meaningful and for quarter

constructively execute Executive agreement our we our we on an continue As in Capital. we first shareholders. the Hudson operational plans, with with engage to Earlier quarter, announced

and Haas will John valuable in perspective of already Directors, independent is the Board. Board due our course. added John we to add that, of to another part As providing director

company over With new years. X X have added will the directors these last appointments, the

Starboard Value. of engage to continuing also our are We one with shareholders, another

understand and their a held to Board the and have open-minded extensive we'll eHealth We best with respect views with its to are all constructive that creation actions the are better is working discussions. to opportunities them and shareholders. resolution continue in interest achieve to and of take of these believes it numerous The eHealth to discussions value

first to are quarter prepare organization we the to starting for telesales XXXX scale successful the AEP. With us, our behind

compared agent to been agents. generated hiring year's higher career more who full-time this historically significantly a driven expect vendor be retention We growth to have predominantly enrollments agents productive headcount through and

effective and making In data the behaviors successful our hiring, major our experience. agent and model, make of and career development other more industry leverage training we changes are to make that with telesales internal develop are and addition a approach an more to enhance agent specialists. to care to criteria and a and We customer eHealth shift consumer taking organization set the and a enrollment further towards scientific targeted

the and use higher internal allows quarter. will digital have screener-assisted our identified process launch a routing ahead we screeners element during introduced first more AEP. be convert us an at to fully indicated expect team we The practice. enhanced first process and We them our that of to screeners call of scoring rates. we as Screeners center previously, the of As answer important customer best-in-class lead calls of

the center Finally, sales areas compliance. and experience top customer of have training, call we talent agent added in operations,

major The ramp-up a training making prepare important agent July planned for and still are telesales increased customer believe and in have rates but telesales training positive model. successful we ahead a We our year, hiring a enrollment and approximately that market percentage progress, attractive. is We experience. in to June agents this schedule, shift our recognize reflecting weeks impact combination our on do In of to which major an a of period. conclusion, enhanced of for eHealth is of large work remains X significant annual typical internal and our the a period will protocol, and longer conversion Medicare have

in of strong leadership. enrollments to eHealth past total double-digit still the Despite Medicare We in share in membership enrolled technology represents market over position a X% years, solidify increase our revenue growth consumers are in our XXXX. our several less and in Medicare than significant

note top Our represented penetration MA last from And to MA comprised of including new total We year, increasing. MA traditional Medicare of Medicare has turning and successfully have resolving this approved XX to we'll in momentum enrollments. last been continues which productivity opportunity, progress it's agent Retention in seniors operational the X% call area market the negatively that issues our and of Advantage that Advantage is between opportunity be those fee-for-service AEP, plans members building of believe this year. we and switching one improvement that our to the volume new switching as acquisition impacted annual the consumers our and our important and priorities, Medicare only been and agent resulting enrollment continue to on our headcount. report scale costs on center-related throughout we we'll

recommendation our channels proportion to of marketer efforts business, book existing our initiatives, expect well applying from a as that stronger as higher continuing to algorithms recent of enrolled greater online, retention larger and being generate a members of advertising benefit We channels. strategic percentage as team and such partner enrollments, LTV including online our emphasizing

And XXXX. positioned Derek. well goals With is eHealth call deliver for these operational on to our I will place, over now enhancements the to in turn

Derek Yung

in family everyone. quarter, driving our and growth Thanks, Medicare Scott, individual and good first planned strong enrollment. higher-than-expected and a afternoon, delivered We

achieved was products. per approved same the outperformance enrollment Medicare IFP costs and acquisition major medical quarter member First time, at while reducing for

and First XX% in quarter primarily The approved in lower year was year Medicare values compared compared Residual QX XX% a lifetime expectations residual close increase positive Medicare ago. million tail line partially revenue approved of by $XXX X, a in offset driven of revenue Medicare ago XX% a a Medicare in Medicare our impact a million by members, strong ago. or the compared year revenue members. in $X growth Advantage and enrollments to segment increase was to with to grew approximately our to including

excluding increase favorable increased as-adjusted to LTV our and X.X, contribution noncommission to costs, marketing carrier compared Acquisition of new noncommission XXXX. X% compared favorable basis, line costs carrier our X%, X.X. to subtracting This was MA approved COA by was per on COA expectations mix. with expectations to flat to to and XXXX. total was to QX The declined members revenues advertising helped Medicare XXXX. from LTVs includes year to the Advantage an grew Medicare of total Advantage XX% to a costs, quarter year On was dollars acquisition basis, and of X.X of member, this cost The which and care our compared X% a ratio was ratio Advantage it declined LTV dollars. in adjusted from customer Our X.X, first ago. marketing carrier enrollment an acquisition LTV by Medicare to compared roughly advertising our ratio revenue Medicare QX

first million to million $X.X software During with $X.X $X.X allocated million total the business companies. $X.X EBITDA in segments. capitalized XXXX, the IFP of the million to $X.X XXXX, million to to and basis, the first amortization was segment of was amortization segment segment the metrics software generated costs. we revised and the segments. of XXXX, public capitalized million development in quarter a IFP Medicare In allocated $XX.X quarter small with and the our with Medicare done the peer to of compared On and of that capitalized $XX.X profit the million small segment to first business million first profit This Medicare quarter of of was enhance of quarter calculation the financial of software and amortization comparability adjusted $X.X to exclude Total of XXXX.

to approximately number of Medicare the XXX,XXX of generating commissions XX% Advantage members first ago. end estimated members an at the quarter of was Our Medicare year increase compared or estimated XX% a with increasing

consideration we manage While cost level as forward. ratio, policy increasingly acquisition profitability will important level to be policy member profitability LTV to continue estimated going an by to measured

members, Medicare As we our involve throughout might with member build experience we with relationships across will stronger multiple emphasize carriers. which Advantage, policies retention various their

or rather improved Our from in recapture XX% XXXX increase. year-over-year XX% have XXXX rates than XX% in to a

of to center member platform, for grow providing expect on of cost our members recapture the a of trend and our attractive increasingly we down, enrollments we number the level transact economics. larger online As share customer

quarter As This and year first declined from Scott Advantage Medicare cash to estimate on partners view based historical data estimated a XX% to plans our preliminary XX% churn XX-month described, a our is from collections ago. date, from observations. carrier trailing

X% within an report on number on our estimates our ending membership have of also average been We numbers. actual estimated basis. membership Historically, the

second of overestimated in in QX quarter our MA experienced this to in membership number member by up XXXX, increase XXXX. for XX,XXX ending However, first catch had we and we quarter when approximately of an the churn,

adjusted on and accompanying our actually and Relations earnings Investor Please year, slides actual initially an more a emphasis on XX%, membership churn site as-reported was an conservative basis adjusted consult basis. on a QX we're placing as reported our result, posted numbers for As collections a for and XX% our XXXX was high This commentary. as membership on cash estimates. to approach churn

segments. small to individual Turning family business and our

$XX.X to in $X.X health year the million of million, this million segment an of quarter first from was plans combined lifetime family sell members, IFP This growth revenue segment and we to increase business year of qualified XX% quarter XX% in profit compared major driven in by increase XXXX. The ago. values a with generated primarily $X.X medical small was compared to a individual First plan compared segment ago. a a approved

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

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

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

metrics. marketing Medicare Now our well I customer than our reflecting to costs XX%, review enrollment slower costs grew XX%, also advertising care Non-GAAP growth. increased enrollment rates, and and would enrollment profitability operating expenses like our productivity. grew agent Non-GAAP below growth

restructuring due did a income and to for lesser a The in the XXXX. XXXX First our capitalized, compared expenses operating shareholder tax annual of ahead in million for net to was to quarter tech first million $X.X a year a grew of our percentage of meeting. technology loss XXXX. of of extent, compensation, quarterly intangible benefit platform, quarter we quarter by for combined assets. ago. adjustment small recent first QX of expense first technology to tax year to the the $X the content spend our to In G&A engagement income $X.X of $XX.X of quarter first net and XXXX. of a Non-GAAP our our was Adjusted driven quarter to quarter million provision related including a recur charges million in compared compared million upgrades for stock-based investments million was EBITDA XXXX not call continuing tools, a that compensation booked includes compared first of XXXX benefit center XXXX, was GAAP stock-based that and to acquisition quarter due costs, for the XXXX non-GAAP QX This first ago. was XX% of to tax amortization the $XX.X $X.X expenses and

that $X.X capitalized of revised amortization I the quarter of quarter XXXX, to we exclude a As development software the before, costs mentioned the first release our of ago. year of earnings adjusted to $X.X calculation adjusted in million EBITDA million first the year the in first full Please quarter a this we in of refer for quarter calculate EBITDA. and first XXXX how were description

flow commission expansion, quarter to growth Medicare per $XX.X in over to $XXX by cash million were first Medicare XX-month $X.X XX% of year membership from driven our cash compared operations strong collections ago, and grew XXXX. new cash member. first Our million base business Trailing for the was million quarter a and higher collections compared enrollment

per year rate Advantage Medicare XX-month of driven grew new trailing equivalent new and ago, to Medicare and Our commission commission XX% percentage carrier increases larger enrollees by to a cash collections member mix. partner a enrollments on compared favorable

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

commissions months receivable in and is next XX million approximately Our a comprised balance sheet also expect significant longer-term $XXX $XXX to commissions that receivable. million balance over we $XXX the collect that million of reflects of

to to and of million. the And that XX, $XXX million adjusted million to of profit of at from our reflect is XXXX $XXX strategic change to is to these guidance $XXX million to to XXXX. segment the XXXX expect metrics our million would range compared capitalized amortization the in reaffirming estimated compared are $XXX for adjusted million million million. investment previous to business to million profit expected software our previous Medicare H.I.G. in guidance XXXX in be $XXX $XX like to $XXX for approximately $XX to and ranges calculating announced expected excludes $XX back of to Capital previous guidance individual, in compared be aside $X.X subject segment the also now EBITDA on in pending our $XX profit methodology increasing to segment million year be annual EBITDA guidance the of million. which of XXXX, to XXXX small million million to range financial $XXX costs, range We $XXX full January I compared million add conditions. now this million of the We the certain which guidance from to potential our $XX is closing highlight is to family impact $XXX from

would rest like the discuss outlook to I of the Finally, for our year.

to We enrollment expect Medicare growth in that slow down year-over-year QX we posted. just rates will our compared growth

Advantage in This and QX enrollment the period introduced more to As rates demand a a transact. were conversion on that consumer favorable COVID-related reminder, last a agent market. CMS impact given year, seniors had special Medicare for allowed

in booked In approximately we revenue of had don't that we QX, addition, to expect million any to to tail recognize XXXX. in $X.X compare QX

low to Second same Advantage expected agent decline a These in to LTVs quarter Medicare year. forecast our compared relative in hiring At we to XXXX. Medicare a still revenue flat the ago. the combined year QX starting roughly lead early quarter of are second to time, digits to mid-single factors are

to will cadence. lead QX compared our increase enrollment larger care sequential customer in to into this We from expect much QX historical expense

quarter currently to we million. EBITDA loss of a As be in result, project $XX excess second

telesales a to force in agents. a a that's We the payoff eHealth see significant comprised stemming trained, productive expect full-time quarter, better more from predominantly fourth

in member Specifically, in enrollment better current total Medicare guidance at strong that AEP costs assumptions significant based ago. business change which approved to may our in to year a reduction compared on time. judgments, for our and current indications our I acquisition these and to expected a this want remind comments any are conversion rates are and result you estimates, per growth

no changes obligations Our result as of judgments. to in or actual differ update guidance. comments We results a our estimates, may undertake our assumptions our and

Hudson just remind today taking quarter here everyone With the value. we're first and like year fiscal the talk commenting to please actions open any now I'll about open and we we Executive to up the won't Starboard the shareholder like to for performance questions that to focused your and on with questions, keeping I'd results. or further appreciate interactions growth call line open We consumer line. today. of XXXX enhancing Operator, drive our be Before our our you and we're for questions. that, on

Operator

[Operator Instructions].

comes Your from line Jailendra Suisse. from first of Singh question the Crédit

Jailendra Singh

the on And little behind into was on here. quarter comments congratulations keeping a full I if favorable following more few wondering good despite your there. QX year last Derek, up essentially reasoning there year Maybe a unchanged and want you you can XXXX? a the LTV, bit outlook other double-click trends experience just strong the we across pretty are QX, are be given appreciate takes and keep last we early enrollment mind board to on color And still or productivity? should and but puts I prudent on in all any the and in

Derek Yung

it's question. good Jailendra, a Yes,

in of performance continue business mid-single be QX There to is in the that therefore, takes. to many QX, that as you the make on as areas, of AEP, you seen to expect sure LTVs we continue the see see lot flow year. expect you and looking digits And our many low prudent we that expectations to and It's are strength too a quarter same. tail QX in saw down obviously, through early. we've heard, rest to us, in we profitability. guidance especially QX And still strength still and revenue are be this the of in QX and keeping our outperform those metrics, biggest are to we for So and and QX continues we conservative. be puts in and we right

Jailendra Singh

around last of after year the happened Okay. QX period. to comments reporting with and in for And some one respect attrition QX follow-up observed QX on membership what your the

such looks this to curious Just Just you've like you gives It better what little understand view risk year? a there. taken trying visibility. conservative any there's if

fact by just ratio in if how turnover is year in trying again played conservative the of the step-up that saw Just sequential driven phenomena member are that this similar to you understand terms much we being year. out of last

us understand comfort help Just the there?

Derek Yung

That's absolutely. good question. a No, yes. Yes,

collections, year, last so patterns used last what -- our cash QX carriers to be, right, estimate year and historically which -- or to out year. of higher turn to membership, than So in combination historical be we last data QX it ending a from out had turned of

the year, this more accelerated obviously, reconciliation with thought we that are compared on And collections. our conservative year. prudent, status on also, cash being of to this be in or enrollment And member seen we've in pattern year year. that that between QX. also is third experience given more now which seen the open in QX last And period we rely and and of the past created carriers QX, last we've has switching kind So a different terms membership would we've than

to variance, we small estimates that terms line more and our what see be of in compared actuals. to comfortable factor we're variance with expect we so and in And there, in

Operator

Your from question of next Grosslight comes line Citi. Daniel the from

Daniel Grosslight

Congrats on a strong quarter.

in commissions to And What those can period? go-forward some MA members. did in describe on gave delta like metrics your on basis? new the for year first what are And the new You year look a ago you expectations folks? that

Derek Yung

Yes.

for than January is XXXX into last for of year percentage this enrollments the obviously extended better and in XX%, So the back in the metric Medicare we've remarks. the is a seen half which that that what that's year, AEP. That the came of trend we enrollments reminder, improvement effective prepared really in just from an policy, are you heard was -- new predominantly which AEP, to

of additional the So of to Medicare to be new fees. $XXX administrative delta could an roughly a renewal enrollment

new new as One fairly compared of in -- Advantage. is are fee-for-service Medicare and the is turning we obviously Medicare a that Medicare this portion of it to are for you it's the people just people a part and material, populations something other and, Medicare see folks who in of Investor for significant significant X portion XX, to are are So time. Medicare consists agent Relations the is the that to Medicare into can the our And switching In new enrolling agent, Medicare size overall target. original can Advantage a first who especially qualify is reminder, how to bucket Medicare folks renewal. be portion, Advantage who of a the And people. fairly and the that market therefore,

any contributor business LTVs. our, it improved from that Tim, is say, have add perspective? a higher to to do better a to let's and rates So you comment

Timothy Hannan

think up it well. I No, summed you've

Daniel Grosslight

proportion a you that then go-forward And expect to grow? on basis, do

Derek Yung

We do...

Timothy Hannan

that take one, jump and I'll in Derek.

that aggressively. audience So that, it to audience higher members engages And than is online more something and more that we at that are older do. address working know rates we

as more so designing of features will marketing we segment. and adoption on materials, us enrollment, market cetera, more and segment, it with more particular, address market et we're help that to so think the online we that website, in And our see

forecast on. So we for but is specific it, don't working have a we're it something

Daniel Grosslight

it. Got

Okay.

they online impacted higher LTVs are commissions the coming higher channel? and by it's through persistency So because

Timothy Hannan

Yes.

Daniel Grosslight

are expect And on -- you're know be split do versus your a but hiring it year? a for then hiring mentioned I Okay. follow-up, earlier, agent XX-XX to any you you this of year? changes for this internal still account external you agent kind

Timothy Hannan

Yes.

early estimate. fair hiring outlook this a that in change point. that's that at and would seen There's we've our our think recruiting been I nothing

Operator

RBC from Your Morgan next Frank from question is Markets. Capital

Frank Morgan

on should you about recapture some retention on we level I progress to? and it there on like made looks of sorry, some there, to today? target of subject Is your you customer the some that I'm kind curious, there get could Is XX%. up guess staying suppose, I'm you think efforts the there. rate -- of us of decent share with I level subject the

Timothy Hannan

trying target So is to. that we're no Tim. get There to This I'll take that is one.

I X were definite we ago basically retention serve still when on was we this exploration. into of that. started rate for realized recapture And one path And less to our there year a think better that customers. see that than down what that year being opportunities that us we're sign just we

we be lot from AEP learned the serving customers. And more a so our we've that ways on could effective

sort approaching or up. of so go level that to diminishing think But would there at we think we will isn't continue we are we returns. And it which stop a

effort we so. in clear the far, we progress put as do So more we see here,

Frank Morgan

to them guidance, fact you. people in I'm that your and change bring light you hiring going in in and the outlook with just Any bringing on regard flow be more are people to burn sooner. use sooner the cash these And with Got cash any or on changes cash burn? cash curious you'll of regard and to

Derek Yung

year change more earlier on ago cash flow and do and relative we be well. use cash and burn, to staffing pivot cash staffing, year likely full to But for QX internal expect outlook given No our to agent more as a unfavorable operating Frank. a

Frank Morgan

it first in help you? fourth more would would to the next year -- a say, you Okay. of help it of -- that because going was first you But would help you'll previously the I it would I change the fourth think that, know or don't sounds quarter, the that you quarter you from contemplated. in it's well, what by that no -- Is just but like before quarter it by quarter

Derek Yung

the in ago. to later agents It because be staffing we than productive, compared a be fourth will year so more agents wouldn't will the help quarter

cash a is So our with consistent use still our year basis, on guidance. full-year full

Frank Morgan

Okay.

go -- Lastly ahead.

Scott Flanders

QX. after at flow cash the the it are plan, our significantly exceeded We from first quarter,

Frank Morgan

And one it just a get commission Got into growth you. I any that? I'll there of obviously, new have on Any kind Or could impact -- Are on that? Is other mean, there churn, of And any final indirect it benefits anything Medicare. this better is market? better hop. paid you here. like that

Timothy Hannan

take in can one, I and that jump Scott.

or there's from of number acquiring new customer new So Medicare the product. benefits to to of a sort

is with the that healthier, have from with less younger familiarity just duration being a for of to reasons There's longer switching. variety tend and product. first they The

a to win capabilities, be earlier they of getting online be top more whether gives -- a as longer to a chance tend duration. have they So tend we telephonic, techniques and Then to or later. our us them retention enhance a customer on that, it'd again

future. can we customers win front once, it's But those think to And the that the great gives helpful then on in so end. chance if win us them again a we

Operator

next from George comes line of question Sutton the Your from Craig-Hallum.

George Sutton

with the you could. your improve. is just that the improvement, operating if could to submissions, impressed focus wanted curious online I'm was if how I which and cost And to and trend there, I I screeners. there? And to continue relative agent to member per talk shopping first, your that to use in use could And wanted secondly, understand screeners. expectations? we've we were our any in to planning of I then there sense where better secret how assumed on go Honestly, you're the past, screeners.

wanted how they're better understand to being I just So utilized?

Derek Yung

talk and question, the specifically I'll pass piece, to George. Tim to me take it online screener on Let off then the

online is are on with our guide the we so full target last XX% year XX%. So -- year submission

of given LTVs which what unassisted We costs, interaction. enrollments, no out that lower online favorability The acquisition are that given comes more heard. that favorable coming of cost performance you our higher and out there's has goal obviously, online ahead of from of tracking QX,

So more financial that is population important perspective. is the benefit that from a

QX. to full be we're it's conservative, peaked where online -- really still want but good you target. about not to year given about Tim, that's obviously, And But So Again, question? talk changing early. enrollments in a want tracking. the really, screener we're feeling

Timothy Hannan

X first, QX what really our productivity, very overhauled through the the those Well, have continued during in QX. was And and saw that that sales fast we put a agents. position we got we leaders in start, performance a And agents took the on down of a really actions in we And quarter. leadership impact. then our us off was the months. thrive big And for our to year Sure. last last these internal organization to made vendor then dragging agent the

momentum sales real so we the it's giving within that And leadership giving just the agents, we're our them, as to organization we're tools the them, go and organization forward, training not of why the which sales so there's is that it's look we're a the optimistic.

On the screeners. screener question, used particular, have in periodically we

limited we that licensed use or and a did calls to customer see were off calls during primarily so. low we of we service And was So benefit the fashion AEP, our kept agents them that doing calls. in benefit very probability prospect

out first of we're test X get still out our in we the rolled we help And And agent population. and seeing so are the of our licensed us two they more leverage classes more last that can screeners encouraging. them, And train how can our how way and seen we is early so days, investing into we've it's everything learn early there to very to say use so that but and far them, I'd months.

George Sutton

the should quick on aware you of? you. Got we is there that a And conditions, closing just H.I.G. conditions unusual in question anything be the closing timing, mentioned

Timothy Hannan

No.

Derek Yung

No, nothing unusual.

to George. We close, transaction expect the

George Sutton

a finally, Scott, if hard then radar, business, the comment, but IFPs and growth to And could, Great. turned sort Okay. been long, little it's it's I a battle, under a of into nice see. nice

Scott Flanders

more makes it to George. cap And become that proposal the observation, expecting really on Biden of for make us of elimination a business term. telling the poverty longer for it's us for the growing. Thanks Yes. XXX% double-digit the that be permanent and subsidies, Carriers profitable, to they're interesting are

our upside not it's -- is on it year. So not for guidance plan in we're this it, but changing a modest our

Operator

comes next of Jonathan line Barclays. the question Your from Yong from

Evercore. question of the next line to Elizabeth Anderson from from will We the comes proceed

Elizabeth Anderson

more that that recapture bit talked of in mentioned, switch. sort of and some One next some about metrics a back increase they about how it sort hoping sort of sort time were to little was that come of maybe was the of of the like your progressing of than forming some you see sort sort of thing I with when over and Could sort touch that keeping there imply intrigued of more in time? what signing you them rate just they talk your you then efforts relationship by sort you you up of other and are seniors want

Timothy Hannan

Tim. absolutely. take one. that Yes, I'll This is

we with So with from data of number serve in to. them inbound we with that were last to team that felt that of And different calling. best tests. take our profiled we science But different better reach be reach to basically a outbound would set things book would calls direct existing than our year, We of series we things, them the up and some ran is identify sales of other out we teams email, we customers that implemented agent. where business served a regular we one more did to customers out mail, the reactive,

definitely proactive out And reaching a were out customers. better them. did us, in So they more job to where to we serving may our reach we then

different there iterate and deployed we're populations, will And for we that So we'll year. again, a assessing last basically well with levers year. -- of like how combination still on different we I this was things before, said that work

Elizabeth Anderson

just one -- And helpful. more thing to a That's of clarification it. question. Got

the us that With think closes, can second to you you the presuming H.I.G. share likely convert, you tell the -- Capital was could in count quarter? what be

Derek Yung

signing a floor is conversion being answer that So details the of sheet. the not to the of there But set transaction the Elizabeth, that. term after until has because a price is XXX not ceiling yet and days the

So conversion until is there's price exact a the based set. on fully range, but the the -- know conversion diluted we don't count

Elizabeth Anderson

Okay.

us So Or... number? that you update when you'll have

Derek Yung

will count Yes, then well right. adjust convertible, And is on price that time. over a also, so that's it as right. That's based stock our

Elizabeth Anderson

Got it.

that to have you that. know Yes, helpful would right. All be Okay. when

Derek Yung

EPS Elizabeth, into but as obviously be you that count, other think stock, than clear, preferred which will no a this, share well. other know as to I And flow there's given impact P&L

Operator

Yong of Jonathan the from Again, line we have Barclays.

Jonathan Yong

you now? Can me hear

Derek Yung

Yes.

Timothy Hannan

Yes.

Jonathan Yong

Okay, great.

Okay.

going again. new back MA to Just

You've them -- that. you're guess being about Because like between more cetera, et already. obviously on talked doing? you I targeting online by a different And driven been But how bit targeting plan being better what's online, them already retention, things what you've more.

what already done? So going what's versus different you're new approach the market MA how getting normally and switchers of in you've to members those terms get to

Scott Flanders

to October. retention in But we though XXX,XXX factor to note with Yes. I'll let depths it's get seeing that. site think important the just registered Tim seniors that even our customer And have launched that longer have I already authentication X of we we're that into center.

our the a to we the engagement comes members up stepping But easiest enrolled So but obviously, elaborate, cheapest advantage members digitally having and and is customer please. big engagement across with centers are could us. Tim, you the board,

Timothy Hannan

and research, deeper transact, delved Yes. into a that the all different you see to as them different confuse customer we've consumer is just What way a underserve and we them. the a way you a and understands then if may switcher plan, somebody of can is presume elements shops. would that looking And shops deeper I is say to than Advantage new Medicare

when are explained. we sure through make experiences things the so easily website making agents our talk updating content sure can consumers for building the process. It's And about educate them, sales to it's on the

Medicare new And could to is and was plan And the choose a geared for so our little higher. bar new Medicare more historically for well bit the think somebody a understood Advantage customer, I Medicare Advantage right customer experience who to effectively.

Jonathan Yong

Can like your primarily agent hiring of then doing there. are And now? cohorts Great. they those us flavor training tenured flavor some you've in done other on already. agents? any us a give how it give you Were sounds -- just with Just

Timothy Hannan

Yes.

we've agent are the are our to and on really on our a screeners, create workforce, before, because before. as licensed we it's leverage lot as track We not opportunity classes I in focused see something our earliest with we mentioned an of We hiring. that used

to targeting. level early, recruiting But classes job come. and agents productivity seeing classes So previous come the are the a at some in them encouraged licensed in floor, of large a of the we a performance are than lot on But are maybe we're coming Very the to data we the of of still that we're we're where years. on doing early is focused higher on who screeners. have classes better more the how

too So we're much not from inferring of sort that.

Operator

Your Deutsche line of next George Bank. question comes from from the Hill

George Hill

of an accounting little kind Derek, bit. guess, I a first, question

result. You would that big to on LTVs segment grow, drive impact the we have be before new to to did like how the it meaningful expect in And a it talked about Medicare up? I beneficiaries kind quarter? can to of would guess, revenue contribute they the if in how continues increase LTVs have much to

Derek Yung

Because will as of the new make have as Advantage year-over-year, in Medicare also was our and continue biggest obviously, that to only of be we QX enrollment quarter. impact to being So could end And LTV more further George, it X%. did for XX% a that. contribute increase the AEP Medicare LTVs. potentially expectations LTVs the kind to progress, And we to our down down did driver up up still for positive drive

George Hill

willing I and little plan, guess a if or of the talked look of question don't Biden I you a kind outlook And this the a Okay. know out combos for but you on my business bit the you if IFP year -- with helpful. earlier, could little That's Scott, the you carriers. the about kind preempted X, execute to permanent then, put plan, how of the like talk maybe the about be you're I don't you of business could if the the big that business would be? goalpost proposed helpful. changes And business become segment infrastructure MA a how differently a kind Biden as know bit part that if any around of from little

Scott Flanders

Yes. And it's $XXX-plus be it, and a highly million about business, revenue we definitely could are it profitable. and thinking

for it business the us because merits still, Medicare of the attention, though the cash is very biggest dynamics far, are attractive. reasons by One is flow additional

faster than costs. a customer acquisition have the on payback X-year We

merit does attention, get and will additional it it. it So

Operator

last Your line Truist Tobey Sommer Securities. from of comes from question the

Tobey Sommer

on terms strategies partnership on was Creme age-ins, exposure wondering customer to in to if touch I you Creme to the have of which member increase characteristics, drive your would little in really the care a la also center and you try de think. to growth bit more strategies the elaborate of be could I kind

Derek Yung

Tim?

Timothy Hannan

about center. care the first the how scaling the Are on customer question, agents? So growth our we're talking up in you

Tobey Sommer

members And how it? participating drive plan more to you in

Timothy Hannan

the the center, center. for customer In online customer

Tobey Sommer

Yes.

Timothy Hannan

customer think enrollments are our have online this there's that very encouraged the of exceeded the a engagement. I center, expectations. point to for we And drive far different greater that ways number we So can

have check and or on status additional process with and experience, easier of greater prominent enrollment online plans and the the through they their in so helping a people that to app can details. this more the enrollment it customer enhance in place terms but of to integration We for and is then easier center, make in the get telephonic the sales get people understand go

the right, of question with put a traffic I closely how mean, traffic. sort We that there is absolutely we work with knowing on So unbiased And our where And far incredibly best them, uptake we've what makes serve you're through a looking with we limited that I partners. out agent difference. so can their big partner our sort consumers, very on-ramps to that with our their tends will we your was great we agents think it because is consumers. work for be partners important -- our customers now growth. to have specific seen integration accelerate saw we're second of then and

quality of And we of well. serve I are market track their handoff customers, we've how that we partners. out we those have longest to being the the think -- established our can really tenured them, speaks of reach record a And to the to with effectively have those really them cadence growing customers we so

So of the we see We have high portion small a QX. opportunities in in for outperformance with it's plenty growth hopes growing, see the partners. pipeline. membership our been it's we of existing And historically, but really and

Tobey Sommer

Okay. million would $XXX growth cash My resources your last in How impact available and implementation? question. addition of the strategy

Scott Flanders

year But administrative grow our experiencing these even we if would had help the Well, know, than end cash raise flow, we eating stronger than stronger to having and this to need we on original to that more while have you anticipated, flow be cash money positive might Medicare if It still, the higher the in and Medicare growth we and months break also off of plan. enrollments. to cash as member table. we an when cash year are by we the look, through positive don't cash cash that the the of XXXX. in rates, will all the of balance fees timing at this per -- continues, flows Advantage Because, obviously, that us XX takes new we well. infusion as And we first said place the higher get of

be have, of closed be So will getting and could some about this great year we will using unconstrained we what cash. the is the in that be growth that deal H.I.G. momentum driving with we

Operator

the turn question-and-answer call I will over back Mr. Scott to That Flanders. right. session. our concludes All

Scott Flanders

We're Terrific you, next support. for have finished strong analysts into great calls of Thank major you, on shareholders quarter, all Thank this the over a and this our QX note. to week. QX particularly. strong, everyone. to questions now. with balance forward starting and and equally we of Bye your It's out week everyone, look having

Operator

conference This call. participating. Thank you concludes today's all for

You may disconnect. all now

eHealth (EHTH) 30 Apr 212021 Q1 Earnings call transcript