GOCO - Earnings call transcript Q2 2022

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Operator

Welcome to the GoHealth Q2 2022 Earnings Conference Call. My name is Kevin, and I’ll be your operator for today’s call. At this time, all participants are in a listen-only mode. [Technical Difficulty] prepared remarks, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. the to turn Farley. now will call Brian over I Brian, begin. you may

Brian Farley

Thanks good GoHealth’s and you, for afternoon, call. Thank earnings everyone. joining XXXX second quarter

or Jason may statements based are Executive our current This today Kotte, risks on conference Schulz, and future these of the Numerous control factors and uncertainties afternoon’s cause actual from forward-looking materially me Officer. ability Many differ predict. beyond those anticipated company’s Chief will statements. contains determine Joining call results results expectations. to Financial or are Vijay the projected in that Officer; Chief to

on You quarter the forward-looking any should not market of issued a closed new second information, containing place undue obligation to or due and reliance no company today, results revise we to future whether update for release the any undertakes XXXX. press events After the otherwise. our statements these of statements, or

forward-looking listed tab. factors Investor We press release, have under statements. We in Commission the in consider described additional website posted have Exchange factors and Securities our the Form number GoHealth conjunction the the to you on information. XX-K the with risk XX-Q In you our other Form the should a of Relations release for consider and we reports that risk encourage filed with

call refer of And Vijay. this earnings I’d call. turn like will Please financial release. to and that, press measures, the During most financial to measures measures. set certain comparable GAAP in during over today’s the discussed release we measures comparable discussing the this These call, to press non-GAAP for reconciliations the reconciliations GAAP the non-GAAP be with to directly to measures are most reconciled forth are

Vijay Kotte

afternoon our you results. joining us quarter to Thank you, XXXX all for Brian. discuss Thank second this

often will our supporting Let me and in proud quarter earnings Jason navigated Schulz, greater plan detail. new as team start they saying am XXX,XXX review a for I complex process enrollment. how GoHealth’s frustrating of CFO, beneficiaries the Medicare over this health of by results

plan plans does, understanding as have and I Before position GoHealth GoHealth to all joining, my and joined establishing experience of for GoHealth introduce doing needs. By e-broker and the better space. through bit plays leader After about developing the industry. been is drive in matching role their surprised and volume company I to the essential an pleasantly the have the platform. recruiting the marketplace, he myself customer our Encompass we meet carriers independent beneficiaries by best Medicare CEO. evaluating a June like the to them an within by I’d work in measures, spent time post-enrollment with share are a GoHealth with in

company the considering was While extend I its for position. opportunity to there a significant role, felt this differential

I has solidified. believe growth I’m efficiency. that my platform in and to conviction is serious on seat, that point been second Now the to none, and drive see here I the potential

should in experience. improve this with priority doing attained time the my freedom space. of with uniquely it Our overall health difficult a beneficiaries beneficiaries plans, on decision choice so, they are retention the at have and beneficiary drive deliver if stressful an the differentiated solutions, worked support scale, and the to the GoHealth their and sought able greater develop they In that their are leading Medicare. I’ve career health complex health as to decision in making decision very supports has effectively goal process supporting I Medicare? consider which around Should scale GoHealth And my to what and to time. over to expected with greater receiving satisfied care. traditional benefits to at they is to is choices, and I to focused ensure career to alternative a they Medicare and my choose. of beneficiaries, much options make providers plan for solve technology position ability

changed the our us natural partners worked However, our amongst a new well oriented. order carrier from competitive best we happened inflection of enrollment reached the what reflecting in to as we and beneficiaries needs point to what for role, future evolve. being more position has focused I’m dynamics as and on being have In my shift engagement

value Just talent, to we the able inclusive to the proven enrollment capabilities and technology carriers, the beneficiaries to deliver leader engagement I’m extended consistently and platform and GoHealth utilize efficiencies in has data confident unique race. win of industry, to be the our to be will incremental to the all

we we laser-focused have identifying drivers and cash down Since imperative a spent high journey path, it’s are As flow significant quality. on the key maintaining driving this amount time that started, we the I challenge opposed of our to end, revenue To efficiency to maximization. of the announced deliver we company. as the lens recently continue that greatest that a performance to organization the towards with restructuring value of

headcount by just On refined agents. salesforce, XXX our the we of quality front, under our the have reducing size

profile quality to our dependency thus the quality, in Connect positive so, deliver new performance We conversion able In to tenured I’d report highest resulted happy lead focus external a agents higher more Engage much that update each brief deploy and With with us doing will our Encompass confidence business. allow at has around higher the to major we our and deploy we’re contracts minimizing teams on interest partners. this year a I’m gained with carrier that the sources. modules. like cash enter ever. of we to received on our for effectuation on programs provide metrics cash and that our on AEP a X initial level, efficient

foundation platform to that into team ramping is of economics, evolve The driving has date so been in get parallel. into us to serve to we for market, The come and to focus in also GoHealth needs XXXX optimistic to within and making this for has programs leverage AEP. be better reposition some also shifts is instead we and can this some refocus desired efficient in cautiously level time past more expectations while of a How scaled, you and put into of deployed for fully monumental with historical industry leaner, provides do possible. the the prudent with remainder provide predictability, new our of XXXX in more the transparency, strong all restructuring as most expect achievements but to our that commitment standards enter efforts team at critical these Encompass feel only our This and can I dynamic size all feel point, cash and where guidance unit and we suspend current from I comments. it market. this success members a experience and operating With with data, model support be growth. this company can we’re a to depth These to we qualitative it’s evolve. innovation the and this acknowledge but not We’re business. mind, our up will the risk, important given quantitative

on today, ability second, will still rate As that basis in be run a second believe impact significantly third, strengthened we lower; here our revenue to EBITDA, restructuring meaningful first, be adjusted our will measures few slightly breakeven and while a half will will our our positive we cash sit flow ways: lower; be materially. achieve XXXX results

changes in this fulsome at them technology I as XXXX, announced and We now afternoon. winning continued on more our come around tools services interest Jason? fall. forward over update expect experience. engagement as our only joining all not sharing digital to I’ll for later leadership, at the look close for excited for provide quarter volume differentiated look call to we when and numbers. in customer us earnings story, unique year turn I’m to you we more our the his for third full and color Jason reposition GoHealth XXXX. Thank for but your to this we for

Jason Schulz

everyone to Thanks, Vijay, today. our call and for joining thank you

about of results, into want of some get I from personally the future. to meaningful and to that with share to share itself quickly Vijay’s why became the prospects separates foundation optimism to today opportunity truly the company of tomorrow. perspectives the Before market, make some the with was I contribution clear a as I rest I me challenges and exciting in the that GoHealth see I financial It reflections. built joined early the

we financial results. communicate have we of is it our to we deepened understanding business, important the determined to As how take improve steps

in still We’re the early assessment.

Our our of intention unit to provide is products, key economics the associated profiles around and clarity business, greater impacts. of margin drivers cash flow operational the

predictability our process around taking forecasting look the these increase linking our to external We communications to are projections of our forward-looking and at guidance. a also fresh

flow from focused and covered, improving suspending we these factors the importantly, business guidance cash materially For XXXX. Most for continue the are reasons, just and be Vijay on transforming we to operations. other

I first our from the an million last is the of half same such, to operations year. flow $X compared to pleased As of share improvement am XXXX, period for $XX million cash

transformative the of we actions we cost from the the cash are taking aggressive goal management breakeven and achieving by discipline, operations anticipate mid-XXXX. With flow

downline XXX% by to which the same in LTV is as $XX impact our $XXX $XX XXXX. important period posted while million look-back QX the for largely we same the our EBITDA partially segment was respectively. policies offset into from decline to loss the number current QX we declined previously revenue $XXX results in in partnerships driven our by result and reserve change, $XX loss policies quarter, a To million which improvement sharing blended year. revenue downline This was of partnerships Moving relates lowered of took revenue million, have Medicare for overall and is with $XX The in in new discussed. the LTV year-over-year segment, growth our of further year. of of largely decreased the quarter, XXXX revenue financial the recorded arrangements QX posted last would of adjusted million impacts $X the constraint for in million I’m agency approved increasing Consistent $XX methodology going and drill that quarter. adjustments our with improvement QX the of million it in XXXX, adjustment sold revenue agency Starting of EBITDA to QX we million, year, increase of move of kept To a the million. carrier a the reporting. on with is explain to sold million by million we revenue our this External $XX and to an The a profits last the the adjusted compared into to submissions, X% of normalize $XX quarter, by

loss million. million $XX a This decline Moving we versus million a segment, of to XXXX, our of million is recorded $XXX and revenue QX $XX Internal respectively. Medicare $XX and a

and enrollment in marketing discussed, that compared LTV adjustments already this last year to there impacts were of timing the higher of revenues quarter. partner we some Beyond were certain QX

our the has significant opportunities submissions. the in conserving However, segment carrier profitability most driver an less was also decline our Internal sold. Much million marketing, our and cash in fewer was of slowdown decrease as of in revenue spent and of overall we intentional, Medicare approved agents our a $XX resulted for decline in while XX% in policies

changing as and economic are We headwinds, rising inflation landscape. industry rates, facing interest as such as well

return As flow the actions such, on week and opportunities cash near- believe generating the long-term thoughtfully highest economic strategically. We influence ensuring and the aligning our deploying cash provide with to success. while drive company, the acquisition probability have the highest most we in want customer to we last plan our for and We the the to over, best levers focus our for and are costs invest activities. namely and taken we stability margin

preemptively that mind. I your on up, might want to wrap be I items touch couple on of As a

and First, our speed avoid related covenants. operating our closely for about agreed covenants to our lenders concern with expectations. better long-term that to have them any mutual align revise work on up debt to strength. our trajectory plans existing They with our and debt bring goals to challenges We to sustainability

to fall authorize requirements, We’ll stock a Nasdaq’s listing if over more meeting by we shareholders stock in a shareholders information the price and minimum Second, related board. anticipate price topic our our to holding request later necessary, split special reverse on coming months. stock this provide to the current

queue to how Before I operator join to want have I to GoHealth. your am reiterate I hand the questions, it back to pleased up

for now of questions. we what but be to good this Operator? know we early excited a call handle part the the the call. updating look on the in stages time to business, do of and We’re We’ll I’m you up I and we forward next. to Thank today. need here, open our in you progress your transformation for a QX have

Operator

[Operator Instructions] Our first with Anderson Evercore. from Elizabeth question comes

is Your line open.

Elizabeth Anderson

a would know last weeks for first question, your like you’ve just or Hi, to guys, I plate thanks so on my so. obviously guess, sort X for had I hear, the I much question. of the lot

of of adding of anything salesforce. from given Are the of of terms year? expecting trainings key I or at sort AEP of you operational of that point Just Any to Or of where approach you’re sort CTMs with or sort in in things obviously go we more prep, tenured you’re the said you’re last we AEP you that doing noticed as differently sort to there this season? that are Thanks. capabilities kind some a sort missing? any are that

Vijay Kotte

question. the appreciate I Elizabeth. Thanks, for you the joining today, and thanks call

and the prepare yes, it; we’re anything – Just reiterate a there’s to where going AEP short, in on. and to otherwise to question lot we are around prep and operation doing for that more be with

a time regarding major their just out of seeing learn how busy about been and the we’ve plans know, year, carriers’ trying As is you they’re to marketplace. this positioning benefits, very within our

of deploy we’re We’re how to have agents, AEP, so and Engage of ready And the – are those modules to be doing quality count enhance against testing we’re as the way final extensively around possible, really our in alluded through all we our their tools as front working and approach good platform. for training major of have time. importantly, on we doing tools then technical to our those period, factoring those the And alluded a refined since comments, that the to we’ve have at in at is really on that to Marketing that’s think, even in agents what to last But, stages Encompass board. into those parts of is unique of to last the us is refined and job marketing. this dynamics though as that Jason the we’ve we’re right our we on our those to And the conversion as have also I do the prepared going sure quality, point. active that And now the Connect we tools. that focusing focusing ready modules all want key more of the can investments. agents, effectuation we in avenues. sure AEP quality the their our make highest working to progress partners with we on And highest prepared during the such as we’re AEP go all making those that that have marketing across ensure we’re training that the verification those well as both rates return those been to end so most in one

that’s So, you to to is think, say would respond what I what responsive that to were I for? your looking question,

Elizabeth Anderson

just in this sort the point, pulling you’re how prior to sort mean, us in of sort at follow-up of year? changed and a terms what Yeah. terms I my look to guidance about thinking is, of pull the you I No, guess, guidance company the wanted that that take sense. fresh And, makes take question of the of at

Vijay Kotte

it’s of good those a Yeah, probably listening obviously lot now. the right a minds on question of

be known most the dynamic full AEP carriers which year. our no lot of anybody surprise their we of of periods a the have, at is of in fulsomely factors important this at one to we that of October structures, As year it’s most space. it, benefit and to in the of anybody the period won’t the at of understand which year, There changes look that got look some this are are in until and yet, we the most don’t play we’ve way looking some performance

and different Marketing amongst we Second, versus their got have all may all how we’ve looking be past, pieces marketing who were that changing staffing, the as are this versus and those those we different. changed the inflationary going year, strategic competitive in counter year, this dynamics the And who periods. prior how is at downlines, are where environment, shoppers tactics, to options. the Organizations peers year, shoppers and changed that of they’re behaving we’re regulations our be their also reacting won’t the this so to then to those. be have –

into that in suspend of get thoughts more as point. indicated our this – guidance of compounded did as all led our for sense color restructuring then we So with And pre-recorded a it activities the and prepared we comments those consider fall. that us to this the all to we made obviously, around we will the week, you come give that past conclusion at it the

Elizabeth Anderson

last And one. quick Okay. one

time entire those that sort in couple debt ago. the you of a For to mind minutes things terms salient debt read of you us – us who X-K summary and haven’t points of there? of covenants the released just a in the new Would providing

Vijay Kotte

negotiated there’s the really related of to points salient holders. what want with we’ve debt you X that? on think touch do Jason, to the just I

Jason Schulz

Thanks, Yeah. our ratio. points. and for covenants call. an we the update leverage which and ahead number updated And also, went associated rate, XXX is Yeah, have one, thanks with we of basis our increase an so to then, Vijay, our

Elizabeth Anderson

it. Thanks Got so much. Okay.

Vijay Kotte

Elizabeth. you, Thank

Operator

Our Instructions] Michael question next from [Operator Cherny comes Bank America. with of

open. is line Your

Michael Cherny

drive not that program, wants as little big and the thanks that dynamic very of a AEP Maybe to to How right something of any for you about strong But ever field do. right that motivation, afternoon, levels levels program obviously, team Good about as going chunk and essentially performance it’s possible? on bit went think the through if AEP have I workforce, the the that’s into can do to sure taking question. you sentiment making a they how of notice, process? the you company what make think restructuring dive obviously, into a your you

Vijay Kotte

Thanks, Mike, the for question.

going AEP really that to higher the at across the period about think the go obviously and as demanding transformational the restructuring and We we we organization. process, staring period most as quality deliver we market mattered know As us an for into and this need through board. period, what evolutionary is

focused selection that who We to top-tier the so. them our quality the reflect do we able augmenting focused training refine who those been get went had to those additional to and were become really had our on upper who echelon tools to and we as potential there, criteria, agents on with performers, those through So workforce and that. there

As we do think about quality going some had have before, volume, we of agents so tenured the to we’ve have and utilize, to going more along sources the and tactics into the what can smaller we quality us said that be lines. I those allows period, it ever as even marketing into AEP. And AEP us highest allows the with that we a selective in highest highest choices

productive our beneficiaries way. feel it and in have of do a serve us carriers actually our demonstration we allows to capabilities that better So a to quality very

Michael Cherny

resources? maybe the as partner, potential obviously, AEP, investment external. the How proving own yourself forth versus public considering agent for about well that you push they’re to thinking terms process last of salesforce the their with and comments of to especially in carrier for best in order year, work a pull value-added to that number making know, additional Understood. continued you’re going internally just with, I the And made sure make ahead as are thinking you’re you about their I’ve that desire internal

Vijay Kotte

describing. would we how do portfolio what major to to modules conversations, you’ve to our aligning the most Engage we really great at And most of problems extensive them, partners. just and pull seek our push overall them It what with partner been No, products. been to the pleased that is of had solve, and in that. interacted their Encompass of question. under and We’ve I Connect actually we’ve how carrier very as it’s platforms, that trying all our with and completed balancing say It’s tug getting can have what they’re that they the a matters to discussion, germination I’ve look capabilities with gotten the contracts our all

advanced as respective been doing carriers. being as how products as These well So describing, not we’re it’s helping And in they’re they’re alongside we want definitely in trying our them new to go we’re supporting both absolutely we to our position that done goals. where their feel to of as a evolve vacuum.

Michael Cherny

Got it. Thanks so much.

Vijay Kotte

you, Mike. Thank

Operator

Instructions] next [Operator Sommer from Tobey question Our comes with Truist.

Your line is open.

Tobey Sommer

to an a mean salesforce from cuts agent you where workforce your where perspective forward your perspective? and a you for be a sense do were will go give and What you on basis Could agents? Hi. us

Vijay Kotte

First, the question. Tobey, thanks for joining and appreciate

to or other between again, the our haven’t got, organization, between by As functions mention all put restructuring. hasn’t Medicare over XXX the allude out of numbers been really But, at impacted we to Internal of – External within to agents different the in that agents as so number and we’ve metrics downline channel, those enterprise to provide prior this the in have XXX areas our precedent, time. that partners solutions the the were position a under not those so we as and many you we not in just just Medicare, did

Tobey Sommer

the know some agent force, this keep adjustment needle? marketing that attrition that I the to fueled have to of and workforce do living enough as busy got you pulled but of with. and employee can – with them Okay. yield to business associated sort How you sort the and that’ll you’ve guess guidance, enough turnover thread give plan to of kind I you’ve part live of

Vijay Kotte

great question. No, a it’s

enough what right And exactly we do the tenure the for agents? could back do that And you the were identified thought towards quality? staffing key some to we where going how do us. strong on about overall. and we high produce to levels a that what end the are we quality How enough balance you’re describing? of leads As actually get how with There balance was we

definitely our who at was also we’ve we drive and and balance the and place we looked engaged and in structures So compensation as and feel our then have and analysis, staffing we a at ways satisfy we incentive with looked them put thresholds, good balanced that productivity. models we at what for quality volume can keep the high went agents, levels, that that on and motivated through to

for what we’ve to definitely all is that while we refine there the more coming course in that continue we done. us little opportunity the of over feel an may to what And So dynamics ago. months is put I those market about a described as the learn forward

Tobey Sommer

the of you But Okay. I a not long but too growth? do and probably there get I future. appreciate and targeting revenue think cash At flow generate volume been can this there, breakeven in the top-line feel distant cash business positive haven’t great. know the doesn’t to that a the time, point, simultaneously contracting you

Vijay Kotte

question. it’s an think interesting I

can that And One at to that need equation But we different angles. quality. now, doing. happened. As right function want exactly what would it of always it been been And from strong more quantity think and think And we’re a quality, and quantity we drive believe, position ourselves times both of fill quality that’s lot the value. refocus I we on a is that’s And shift really is motivator to the void. I forefront. we’re say has the on I look to definitely the value that’s a

growth can ways better you those we that think upcoming And year-over-year. it’s provide we the you we that to our as But to time think new be exactly further get the be of well going be. forward, test deliver value will color those able going more year. really partnering driving what deliver services. tell AEP, with cash we’ll we’ve these we and to when as will carriers into us some as these as some finding And product to So drive of through this that, about specials described, segments

Tobey Sommer

comes breakeven months run a the in all after And of Or is and flow the of a next basis? AEP, away in the episodic cash that to target of sustainable follow? is that sort Okay. your middle year, around from in, cash on

Vijay Kotte

I Keep was we’ve trailing set up in mind, the think way the on basis. target XX-month a

that an not you has those just described. quarter it’s So characteristics episodic cash one

to the it’s the rate going business way should on way so run And a operate of about it, the think forward. basis

Tobey Sommer

Okay. Thank you.

Operator

[Operator next comes Yong with Instructions] from Suisse. question Credit Our Jonathan

is Your line open.

Jonathan Yong

for taking question. thanks Hey, my

done? guys you kind be guess, of other roles, where costs, variable Are obviously there kind you to I costs, you more the nature? work. things other the further work As jumps did areas there are into of you that think where But you stepped of any any out areas restructuring reduce can where any can that

Vijay Kotte

appreciate Thank the you, Jon. I question.

Or for mitigation? me you the I make to got sounded costs. and Let were question repeat coming a bit at right? look lot had to a the major cost out you of want or little I we it, there. – done that fading It on with there sure like are said other restructuring work categories areas to

Jonathan Yong

Yes. Correct.

Vijay Kotte

the on opportunity we’re of more of those cetera. our seem on think, that the on the and business, I a for the et return focusing the quality done maximizing good getting areas we’ve best to organization, side review that So, cash, drive ensuring

of that any need there’s focus So look means. cost known material are at to I’d say at that are but by gap side glaring the areas areas of on things, we no to this time, that

Jonathan Yong

comment agents, Okay, great. And then, And staffing about you you the as current of is right the too think that? about side it Thanks. of still side, Or kind to balancing then the on obviously guys? cut is agent X-year as more than there think you of commission go level you enterprise for the kind is forward, the favoring other? XXX kind level, the early versus about regular

Vijay Kotte

long feel a good the baseline comfortable The of for for fairly run. now, right staffing are operate we have us off levels we that to

different to have that develop We have opportunities offer definite able pipeline to the continue we talent. be nurture to we to products grow, and the a within and

from previous that different have coming that the we’ve versus we through help maintain develop experience want is AEP you the amount years. the agents tenure, a we and tenure outside onboard something pipeline previous into If of nearly the channels. the And it’s of look that X times of tenure to were at this that had in to

than between level the this off traditional looking diversification So type go model, have at set see some at at have more jump of think skills to of the is to opportunity don’t the products specific other those payment the staffing expect also this point, directional talent anything other should And our into those provide this products. and our and distribution of. To diversification the forward, right profiles move product to point, and your both the towards enterprise we businesses. as question to of I you, we those we develop to on right of you bring

Jonathan Yong

Okay. Great. Thanks.

Vijay Kotte

Jon. Thanks,

Operator

showing not questions I’m time. any to And this our turn I’d team. call like to back the over management at further

Vijay Kotte

to wanted today progress time lot for over the to interest and Thanks. work a our we’re you of and talk quarters, you thank all you to in organization. and to Obviously, come coming hope all we updates Just again looking our to forward soon. providing your on close,

Operator

Ladies and conclude presentation. gentlemen, this does today’s

wonderful and now may You have a day. disconnect,

GoHealth (GOCO) 16 Aug 222022 Q2 Earnings call transcript