EHTH - Earnings call transcript Q1 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, everyone, and welcome to eHealth Inc. conference call to discuss the company's first quarter 2024 financial results. [Operator Instructions] I will turn the floor over to Eli Newbrun-Mintz, Senior Investor Relations Manager. Please go ahead.

Eli Newbrun-Mintz

Good morning, and thank you all for joining us today.

Fran Financial Chief first Officer, financial today, John Officer; quarter call results. Chief Stelban, will the Soistman, Executive eHealth's and XXXX On discuss our

a open prepared the we these with will Following line analysts. remarks, for Q&A session industry up

our is this press news website. the our our on recorded and replay website with available release, on of financial the filings later As Investor call webcast and site. are section Today's Relations our SEC a historical also releases Investor being our reminder, be today. of A from the call will available Relations

We on current or matters beliefs certain making and events will management's relating operating that performance. expectations company be financial future to forward-looking this call future and upon impacting statements are based the about our

eHealth's except this address this press filings as law. required during limited results no on in and actual and We represent statements on subsequent to described differ XX-K publicly The obligation statements to uncertainties SEC. of will statements the our forward-looking today, as call could any be those to, of but number today's materially. making risks, undertake we Form by a forward-looking update including, and recent views and or annual not in our most report are with release call subject Forward-looking

are Soistman. these measures also over to be financial call and measures non-GAAP reconciliations that, of in this on comparable I'll to release. definitions GAAP With will We most the Management's discussing certain measures today's non-GAAP Fran call. turn the directly press financial included

Francis Soistman

another by our financial and they to the of industry highlights This strong developments in model. our and plan may choice Today, address growth enhanced in how delivered both model double-digit fulfillment our carrier in and our positioning our execution the primarily quarter year. outlook gained strong and Amplify, and of Medicare was operational company's in impact important you, good enrollment and members. Eli, approved Medicare the eHealth strategies Thank everyone. eHealth key In recent during our we we for execution QX, period, driven morning, business. the and our momentum strategic agency, quarter maintained annual generating models, marketing dedicated review

was sustainable, last Advantage operational completed XXXX, increase in operating excess past the many Medicare by continue report a breakeven rapidly believe in transformation highlights flow for in let X been period. significant trailing of thoughts to an point. lifetime operating we testament million inflection with year-over-year XX, for operating our trailing values. target success review QX plan the flow these of X% growth post XXXX. cost views improvement years, industry of our the achieved was EBITDA. positive and have momentarily, will generation. accomplishments an that QX true first, onset at this we March that our to We about cash outflow year developments. sector, the was flow a the some pleased in I our $X.X to and approaching XX share we months In business cash for cash accompanied growth to on quarter our changes important Throughout profitable me our comparison, shared X/XX/XX and our million another there my enrollment of allowed of first but our eHealth sector transformation. I'm build can of a towards ended business organization the $XXX also cash in Importantly, fixed months adjusted and important reduction efforts, year-over-year exceeding for us early this year-over-year our that Combined ended achievement XX the is This

are brokers relationships. inflection quality, or market. That shift long-term to on adjust, marketing expected member arrived. a to and focus making who profitability cannot sales pivotal their towards point enrollment changes market the consolidation gradually rationalization. we and leaving Those has haven't building Specifically, strategies Medicare see and now to are

over last be exits more months, We week, past including and there have one may announced believe the transactions and coming. XX seen several

believe uncertainty, than important our our advisers. can from benefit eHealth's the published we when empowering CMS charge tools a and important Production complexity, and April tightening the CMS As changes technical to another developments XXXX. health AEP, will sources over carriers. STARS policy the financial sector, final favorable changes shares license In In their comparison suggest comes year the to methodology to providing of this some increased consolidation from emphasize during be trusted for medical market to on consumer of publicly contract upcoming Inflation Medicare their for environment managed recommendations trend its books, means increasingly coverage us. widespread continues, marketing respect on planned navigating carriers benefits assistance choice ever. from within are value rationalized competitive trends, face development see X, Medicare an carriers to to have preservation recent utilization include of market benefits that committed name we our In which reduction decisions large to in pressures, few. Advantage the plans eHealth lower-than-expected through regulatory expert we will and commented source growth. certain for These program environment, of accessing Medicare receive by spend unbiased proposition it further customers make a rates for Act industry including With free options. several Medicare the this reimbursement exits changes, that margin expect benefit several more being model, to planned practice, XXXX geographical a and Commentary advice make from their care enrollment good

it as eHealth from with provisions the related areas with views such compensation. employees, We've key excluded expected, us for information largely of distribution rule. the to discussions carrier rule industry. the are implications available appears ambiguity time, we extensive on a practical companies of were the As the on of partners the obtain in there some Based few at had broker hourly quite our final their this MA to to that the

will continue carriers confident the ahead industry, regulatory our industry our to executing this earnings are call. the in navigating XXXX last the players complexity We ability in on other with we the on while and and AEP continue dialogue shared plan of

As such, our guidance. annual we are reiterating XXXX

fast track record in industry. for represents Our competitive a and the efficient to react eHealth manner highly significant annual regulated in strong advantage of ability to compliance changes a and MA

to on our Moving first execution. quarter

flexible to which channels our allocating in approved key is opportunistic budgets and Medicare success AEP, different XX% Our of open in shift enrollment in also choice market resulting period the marketing enrollment to marketing a performance driver the brings strong our relative organization campaigns, in demand a of total to a platform, marketing to means compared which We drove remain growth. and our channels. dynamic The industry. audience

innovative during our and example, we including we ahead QX plan brand-driven direct additional in back us quarter, include shifting response rebranded For TV, work our towards ads. channel will again expectations. optimization. we which in AP, especially campaigns. gradually affiliate on our including paid TV in and and take channels, investing partners. scale and digital investment time emphasis investment digital It channels, channels, engine Within continue search search efforts, within outperformed fully our to the We're in-house which to search marketing meantime, affiliate presence paid for digital the the direct be the well with to and of these same performed our strength into in XXXX mail, time, in-house mail create pulled saw At this XXXX. We'll partner in

our grew Given basis. that program digital demand digital expectations, initial were discuss overall strong similar unit believe will again line the last to advertising of marketing of brand DIRECTV we that generation lift acquisition can in we marketing saw rebranded comprehensive detail. a platform, the impact Overall, component MA gain from We strategy. member omnichannel Medicare nature an while on a essential over year-over-year greater a our AEP. our time, response our meaningful eHealth is John in metrics with with costs LTV

in Moving saw for in platform, our at call customers conversion $X now continued Amplify dedicated carrier and with We call QX. traction million revenue expectations performing our above or just volumes which existing generated both carrier rates. to over

positive and building out our of pipeline dedicated operation a of business are new of also efficiency and We ahead receiving sales quality are the on the feedback AEP.

our In year-over-year XX% the addition exceeding to Total sales MedSup drove QX expectations grew MA across enrollments Medicare strong for supplemental contributed enrollment, Amplify meaningfully. models quarter. fulfillment and both Amplify

to an of achieving Amplify diversification scale revenue essential it Our offering scale for marketing. in corresponding critical to us Building allows a variable without business. our sustainable investment remains strategy, profitability is as eHealth's component

favorable in year, cash PPO QX traditional moving Amplify Additionally, a which commission-based to the be timing benefit has model. of customers model our to non-broker compensation compared largest this compensation of starting the of record flow fee-based will

to profitability on our core continue cash and to generation, and allocate Given programs flow capital intentionally we support emphasis and initiatives. our diversification product, thoughtfully

growth While expanding business, for technology and foundation Advantage time, of way our means In last marketing measured growth the the end presence at we business allows important will Recall, we returning and a enhanced to MA of continuing team, of our certain business, diversify before expand within Medicare to core while objective to record took in employer outside in rebuilding this on a our doing an the before our at is pause organizations processes that this sales, be approach strong so focusing growth. core to key our enrollment and individual similar year broker we margins. XXXX. us as same returning Medicare

retention to QX, Live the to transparency connection has feel their the in and and enrollment chat rates video On assistance. the empower This potential an shopping, feature platform or our to the process online and elevate the to selection. we level minimal Benefit with and through new Advise. between time, drive could education technology greater our the also close instant following more plan no return capability capability builds within Adviser of enrollment it members as enroll successfully We and this beneficiary. conversion agent transactions beneficiaries side, higher confident process, new Over enrollment provides believe piloted of even

to appointment, Start, online service gain offers fine-tune friction In are important annual of streamlining that We XX% suite still create greater conversion our lever. efforts, beneficiaries can with up includes lasting member in a This also questions needed. and PCP a visits users periodic to to make who set their sure access relationship. the as dedicated beneficiaries advisers unassisted Seamless them. meant helped for platform, drive to a initial optimal experience. and the conduct engagement and tools launched and and rewards increase an answer ePerks ePerks ePerks check-ups combined mail reducing these drugs order points program. helps lead our that wellness plan year-over-year the rate, a the we increase participants continue in QX, organization, Within customer operational marketing online quality,

Finally, partners. special offers our ePerks includes from

The that financial partner first retirement of these organization planning offerings provides access from services. and an Retirable, holistic comes to

excited about impact XXX,XXX than month, existing affinity. potential Medicare favorable We program Since we and the customer enrolled we have anticipate of retention this new ePerks. already and the in on more are launch last eHealth customers our its that

Additionally, on business goal discussed of tracking on improved last on to is Trailing our existing eHealth goals. had value-added to positioned the XX-month and strong nurturing, depending place our in on interactions provide and their year-over-year approach unique start our including both situations to and platform, a experience of These journey and support on profitability increasingly continues emphasis growth an conclusion, programs. the and Advantage quarter's needs. our and service, initiatives. The our Medicare turnover to call, channels include we rebuilt strong deliver basis. customer year all In with to well to our sequentially are we a lead members retention personalized book a each that

milestones and quarters. to coming our We updating are execution on in our annual reiterating looking XXXX are guidance you the forward

ended net in important including another and having positive March quarter trailing which booked flow to million for operating XX QX. cash months validated of generation. achieved $XXX.X focused the XX, on with million through asset flow contract or the achieving in positive we eHealth cash are significant ended goal Additionally, revenue tail the cash adjustment $X.X balance adjustments, be value, receivable in a continues free

begun for receivable our have costs liquidity goal structure, Blue to and Our for we our improve portion asset providing interest monetizing multiple a capital facility Torch XX, of avenues growth credit matures February of the initiatives. contract in lowering additional including exploring

additional website details previous City. our metrics New next will Finally, important investor provide further York now presentation our from latest as enhancements and well on in reflects feedback posted John? of the forward performance John will be many presentations. you look to key of It on quarter. our week. We it discussing for as our financial

John Stelben

Fran. Thank you,

savings strong with year revenue driven compared grew primarily organization, cash Our fixed operating results coupled segment. significantly our driven resulting to EBITDA million Medicare improved business, flow $XX our were Revenue quarter Medicare in and XX% cost year-over-year, growth in adjusted of by first by a ago. our across

segment QX Medicare members, was with of year-over-year growth revenue quarter to $XX.X up First non-commission million, LTVs and increased in XX% compared MA as revenue higher 'XX. approved

to transitioning sales Record, grew to results ago. QX First that Since choice deals recurring enrollment commissions we and this through eHealth Amplify in we BPO as as Medicare quarter last certain same launched in our center to of agency that arrangements Amplify model QX, approved XX% of cover carrier largest year. the core where XX%, the opposed been from payments. These members have costs eHealth commission enrollments, core our with BLR and Amplify year receiving on Broker and our model include our collects ongoing approved call end has scaling well enrollments are manner launch as XXXX year to the a are platform QX approved BOR, payments a well agency or enrollment business. total grew BOR Medicare all Starting BOR as Advantage Medicare Supplement members our fee where members virtually X%, compared as grew 'XX, as onetime of paid dedicated

in BOR between In year or Medicare our reported approved approximately models membership the move quarter clear, carrier earnings models. XX generated and in flow operating deck X/XX differences revenue Slide 'XX, members last financial QX. XX and of existing payment key agency enrollments and Amplify an not the approved year. has first the related of arrangement we XX fee-based BOR announced under to New and our member arrangement $X.X to the until generated through BPO QX these approximately be metrics. will our Medicare outlined a of This up detail estimated the remained XX% large quarter. in will in this million arrangement Amplify To

In arrangement up quarter to be QX will BPO first well. expect a fee-based picked existing that majority from as in BOR addition, revenue carrier in carriers, Amplify moving QX and we was to The and new we is of grow per variable member, to and these marketing add $XXX, the comprised Customer relationships CC&E Medicare acquisition and of approved is Advantage or as carriers equivalent cost platform. as care enrollment costs year-over-year. well up was new which customer costs XX%

number MA First higher activities. staff member reflecting well as member grew retention as equivalent quarter CC&E approved drive those per XX% year-over-year, advisers advisers, including dedicated model, who of our engagement supporting fulfillment a amplified

revenues improved volume, in are HRAs. While their typically well generate don't retention as such LTVs services to time, over application agents result as non-commission expected as

team our member growth advance by order in retained driven productivity intentionally our tenure as X% enrollment MA first of we approved larger post-AEP to advisers year, well increased this Variable marketing sales channel and equivalent year-over-year, mix. to quarter within per OEP average primarily AEP. increase Additionally, a percentage in tenured as support of

absolute still transformation rate Our the increased eHealth's equivalent $XX.X were the that flat profitable variable and than customer in last increased was dollar Total as growth year. $XX.X basis, increased XX% we hence increases lower XX are mode, process, costs Medicare to non-GAAP per marketing reflecting and approved these year-over-year. increases telephonic gains return XX% X%, and in cost care unit efficiency QX the QX XXXX, non-GAAP were MA a total cost. Recall and of increases. reflects our QX conversion of of year-over-year enrollment million million XX% On member per with

individual contract well to business. in revenue in This favorable compared for $X.X carrier we programs our greater undergoing employer was scale E&I as of similar as sponsorship to and high growth return million was X% compared Medicare quarter increased I'll is profit QX Medicare process to segment 'XX segment revenue Medicare in driven year-over-year year-over-year potential Advantage business move segment. a our Total $X.X by and of noncommission non-commission $XX segment million our Medicare of now as to million transformation year-over-year. to QX or to $XXX currently enrollment 'XX. segment. to existing generate increase million was we First by adjustment to trends that of driven $X.X completed mix. successfully reflecting IFP enrollments. continues retention LTVs revenue, and Medicare strong primarily transformation in carrier on a ENI attributable book positive profit improvement the This net primarily within favorable margins our loss the our

fourth plan First XX% quarter year, million These a Similar our profit E&I business revenue adjustment $XX.X which group reduction XX% of and XX% million Segment compensation, combination year. $X.X and million on in to we results in XX% reduction for and business, family vendor to transformation content QX quarter enrollments. 'XX. was foundation. in $X.X E&I segment $X.X and in the primarily our compared $XX.X reflect Medicare cost to costs. million expect operational reduction administrative Medicare and growth results tail last last costs, business. declined the external in $X to to cadence a a was of $X.X general in or QX revenue from we fixed as across and benefits million, compared define million reflect and an Non-GAAP approximately technology our enrollments, including or ancillary individual return enrollments in of net small improved the million by

charges, the million net process expected In them and a part to $XX.X to not did call, with model. costs. $X.X of quarter first We continue cost remainder to related of severance we as the as or On locations our remote It have year identified $XX million reductions we to includes we discussed first XXXX $XXX,XXX reduce of leased million with loss restructuring QX footprint we reduction our for charges fixed basis, restructuring year. of additional As QX, recognized a impairment planning the office physical compared our year. prior impairment the realizing and net largely quarter. last throughout in in our on our opportunities align last earnings loss was in also consolidated began any

to costs, year loss negative been million compared year EBITDA Excluding of a Adjusted million have ago. QX was for ago. would a compared million $X.X $XX.X million to $XX.X these a $XX.X as loss a net negative net

from operations sheet, our receivable negative satisfy and year at the We of combined enough was of than positive $XXX.X our operational These short- have and to changes Previously, our TNC Trailing in costs continue cash a our have 'XX we in costs historical for 'XX. our before M&A XX-month contract million for to our retroactively more of million. cash million we QX breakeven cash long-term future. was the liquidity footprint, As operating on line $XXX.X March QX of allocated change to and physical facilities reflected securities were The for $XX.X the some marketable QX the reduce million statements. which all up $XX.X item. in G&A under cash, million is consolidated goal to items equivalents foreseeable million, facilities-related line 'XX. with and flow been of from flow asset CC&E, first position ended quarter was financials XX flow in we $XX.X Operating believe cash ago versus our applied $X.X our balance strategic period. and the exceeded ending quarter and needs this

year As for during remarks, annual fiscal are reiterating we his guidance Fran our mentioned XXXX. ranges

a decision through CMS conversations based rule, we While our have is still partners industry the interpretation information collected carrier final am of there rule. to so is successfully competency subject Medicare the Advantage on our change done potential and core we years, have matter I with ability for our it extensive regulatory with this and ambiguity Navigating respect in do is continue to confident and in of eHealth, many experts. to

basis. year-over-year second on to about growth the expect an ahead revenue ex we tail Looking of XX% quarter,

QX $XX business recognized under in For in year. context, last just we across tail revenue million our

This driven expect Q&A. operator reflects last our by call With head count line will tenured turn with strive greater roughly an open QX increase in contribution to AEP. CC&E higher excluding agent from greater We tail revenue to that, we year-over-year, and up over I the in as largely to revenue. advisers the be for year, profitability this of

Operator

we'll our with Instructions]And Sutton [Operator take George from Craig-Hallum. question first

George Sutton

morning. of positioning CMS This potentially or out is see James Nice scenarios the on are final business we're Sort you given how managing you the those isolate this to you challenges? Can about the from talk this yourself for from hearing George. AEP playing the challenges rule results and payers?

Francis Soistman

to that remarks. James, because significant Medicare mentioned one There's through this but we we've this prepared on experiencing months Advantage of changes. accustomed right? anticipate and now, my level health the other of refine changes, really proposition plans Yes, supplemental a certain all that may what benefits and it in more benefits value the and see value offense, be to anticipate -- upcoming be of of who respect we we're going to carriers lot I strategies and that demonstrates they -- items the is working those Part a strategies, of pressures fair a are to beneficiaries for the Fran. to potentially that course, be are situations continue been past of to expect AEP several it's eHealth amount those in we'll we where best disruption of

And including resell pressures place stand-alone help we the by through new imposed of the they already doesn't on to them limitations market, may shopping. those in the D process. we MAPD cost carriers convert basically, with the out is other pressures to the them, the side total where said have the some of which source through automatically. allow come in and on the course, where and product Part table be introduce think then, phase both going to expect, and the having are geographic for exits them, that CMS D of everything to some beneficiaries are I up beneficiary end a national as publicly, that's a Part to products TBC market feel that of to and They going on of of to also have

be I to AEPs for opportunity So beneficiaries think it's industry through value of our services. demonstrate challenging that years, experienced they've than but in one industry, an going more the the the meaning to our industry, bring many for the it's carrier we to

George Sutton

you. then And capture you switching higher of strategy sort of your guess, do with shoppers? sort in expected, shopping Got higher or I of activity to those rate place have what improve

Francis Soistman

Sure. Yes.

fact demand beneficiaries continue emphasis to complicated put further the We the message the much proposition which there's already pent-up increasing because going so business, importance airtime, oftentimes, as so won't that as they past, of on know is election we've years of be in advertising of tremendous in and this example. activity persistency retention, through the we've a to get customer our election. effort lot in clearly done by much We why do in our cycle. that following book year relationships, so of value terms And is in an an off the results seen the election that as the consumes ePerks

can customers So everything alert on beneficiaries there's areas carrier can preparing and you're to exits and need exited be has knowing alternative going those that where we're product move greatest if for is they geographic the to will say current carrier. the an intervene for going to into the focus that to intently that. disruption. experience preparing we our more I'd We're likely where you that

book, great marketplace through that So defending And do then capture our a and you as precision. combination proactively taking need offense of analytics, perhaps the in the volatility do it's go share. in and also we'll it terms more to to greater on the I with of said, advantage of we'll

George Sutton

you. Got

assuming year the that full mix revenue years? Within carrier in look side you could the the relationships like to do from contribution of direct BOR what versus think next are few you And the what guide, business?

John Stelben

James, it's John.

I hopper amplifying high to it call revenue and new opportunities. will in today for we think to you the we the it, think business, have on what based digits when XX%-ish be, of that continue single the look about the

especially I we the that we -- distribution time, over looking you models years expect next looking expand a over forward. at would of our of as were could going Amplify think overall I business, guess of revenue. are what to total adjust you several revenues. years could -- to carriers over XX%, larger but the the approach percentage different I for But to sort become XX% ones, similar-sized -- as to the deals want several able to it can't to if really next don't BPO recent add Amplify be,

Operator

[Operator we over presenters back this at remarks. or And it now will that to any Instructions] have no turn program I time. for the further our appears additional questions closing

Francis Soistman

steady, Thank you, progress make everyone growth. of our operator, this for towards to profitable to eHealth and that call. dialed goal thank morning's in you continues important

and We by key Our quarter our results Thank this work continued look employees. our possible weeks. appreciate investors foundation made are strong team a coming forward to in and of meeting indicator you. management of all of support the the our eHealth's important we strategic, operational and your with financial

Operator

Thank today's you for teleconference. concludes That participation. your

Goodbye. disconnect. You may now

eHealth (EHTH) 7 May 242024 Q1 Earnings call transcript