eHealth (EHTH) 19 Feb 212020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. And welcome to the Fourth Quarter Fiscal Year Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] 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.

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

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

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

and our and strategy ‘XX the operating ability churn, full business, our our force, sales and agent agent including outlook and acquisition our and high growth, values, our and of expenses, total investments forward-looking guidance. Medicare events, capabilities growth quarter increase and and lifetime and consumer to member seasonality, business profitability expectations returns our expectations financial We lifetime making statements will technology per to improve our future this initiative market and opportunities, our of our statements the our of engagement, online our beliefs our including call enrollments internal be values, life productivity our estimates, persistency, year Medicare cost member Medicare strategy including that of strategy enrollment these enrollment for expectations expectations, retention quality regarding XXXX demand, to channels, first strategic customer investments, regarding includes and and drive our expected achieve performance, partnership on relating regarding increase statements regarding grow marketing financial in

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

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

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

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

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

Thank you, all. welcome and Kate,

fourth a ago, three a to ending important As the quarter soft preliminary year. weeks outlined strategically our report in marked

back our into we is Although, With going are has quarter out that eHealth in a want are to our capabilities, and evolving differentiated confident success. we built, the growth affected speak fiscal our from that address mind, strategies have take and XXXX as why and foundation and in we where ahead. others presented opportunities springboard that industry. step new company to will performance taking we eHealth the help made actions challenges, and to the we issues eHealth strong of next that are last and phase our significant our market notable capture enter I progress a year, positioning a building what

rooted consumer-facing organization We a technology platform. with are ecommerce an in best-in-class

penetration. Medicare continuing We to members rate XX% and XXXX our the while has accelerate annual of approved grew drive significant compound four deliberate Over a plus over that last online we years, XXXX, plan at executed growth between us a growth. have to enabled rapidly

estimated our and stage initiatives we revenue higher Medicare engagement of XXXX, are launched driving the market. grown focus our this values, ended we rate members scale commissions strategy, proposition. receivable. same eHealth’s of with strengthening segment quality evolution, this a period. time million of enrollments, profitably of to at our two on respectively, At the an in over XX%, and continue share Medicare enhancing of customer while We Part have important and over Medicare grow XXXX value annual we at lifetime strategic XX% in compound profit XXX,XXX and growth and Our $XXX aimed

to them new The first dramatically accuracy to in to needs superior of improve tools improve plan was an recommendations. ability with provide technologies investment consumer and our analyze

is member to second program a improve The multifaceted retention.

of Our engage that element those higher have online persistency to users Online strategy major significantly with is telephonically. program. compared is us this a that

enrollments result, for costs, member these a per higher while agent LTVs, As lower member superior also have requiring economics. providing

and their while a Our plays our also launched customer our capabilities center members, October was member role customer brand and that our retention. is experience our and last around leverages order awareness. data to built deepen in key with personalize increasing year customers online The improved customer center of relationships in in

is this can start clear to customer is extended Capital our Medicare that year. driven Medicare validated that retention that binding HIG share a and customary us to This a To trend on leadership, engagement we toward accelerate blue to But rapidly platform our strongly HIG’s for drive ample model is by technology quality to form leverage closing in belief of and eHealth. a subject growth. these in investment view of is achieve early a expansion and quarter to have transaction. million enrollments. further shares that shopping this through into be positioned. liquidity moving market chip distribution uniquely high on our our HIG execute near-term. investor entered investment our with seeing conditions opportunistically type to efficiency, this the flexibility as strategy market expect provides We comparison agreement returns investment as the make recent this $XXX growth announcement is and of We the investments our believe first in progress

to and the excited We companies helping also HIG’s of to Managing are valuable Aaron Director, addition leverage Tolson of Aaron their about industry. disrupt expertise brings our technology Board Directors. pending

our results for full Advantage of quarter, Medicare approved to XX% QX product year for the XXXX, compared and grew main to our now XXXX. fourth the quarter in fourth Turning numbers

we we’ve the continue sight at in not moment. our enrollments quarter it’s the are grow to While our to these address we overall But to rates from actions the I’ll market, those below a into made. important of that progress taking above and the were volumes the Advantage get lose Medicare expectations. challenges

which improving of and is significant flow long-term made have quality towards to the generation. we profitability First, progress cash critical Medicare our enrollments,

online, mix characterized higher unassisted better agent-assisted fourth for fulfillment historically our shifted channels products up retention toward quarter medical applications Our enrollments online and from partially were of a submitted by LTVs, major year XX% and including Medicare ago. XX%

to fourth Additionally, agents were the our compared before. XX% of in by enrollments fulfilled the quarter telephonic internal XX% year our

addition enrollment dedicated ongoing align strategic mix, compensation agents. quality retention. segmentation retention for our In sales and lead we customer introduced team with All and and organization better process fulfillment and our an shift to revised broader out on effort a an in allocation focus member have rolled to enhanced structure in internal

of critical interactions to on another the out a switching signs early number and has launched our encouraging a their of a customer preserved, choice already policy on center, them existing and increase, members the Further, part their plan whether will by our our believe recently same or based with member some plan seeing retention. already XXX,XXX over relationships are their more of and retention satisfaction has customer platform. garnered and eHealth’ customers on team Medicare element We to-date keeping center accounts our become we confidence of

cycle actual that quarter to that compared just by enrollments retention described. of Medicare recognition values the will application a We our in fourth I on our fourth values not our observations, will superior lifetime metrics fourth the standard, into enrollments That we fourth in is of initiatives enrollments our retention booked lifetime expect from quarter historical as the first year do be we Medicare lifetime XXX on which excess revenue our we for results AEP ago, into expected when ASC cohort commissions quality of expect estimated a of initiatives April. visibility said, from revenue report will more quarter that enrollment have based in new in the take have to this initiatives. quarter these This Under our large drive the quarter. we XXXX are the these perspective for based part because prove impact driven account business,

assumes these values currently the family quarter X.X% Biden in qualified on individual our LTVs XXXX increase. for through the plans plans the the XXXX X% will business, qualified the approved of a subsidy have environment. coverage plan we retention return plans in plan unprecedented enrollment lifetime over enrollment Administration’s guidance this medical of to that medical additional increased for period driven over For consumers XX% XXXX. last to roughly growth major a growth XXXX observations IFP The levels market full also declines extend year compared We a favorable decision reverse a and compared In our or year Advantage several to Medicare year XXXX by in members of years with eligible driven in major allow year. XX% to the to first these end to opportunity get by ago, support of by year

agent converted our rates consumer The identified. Same more Americans time cannot quarter our of to afford expectations. fourth who as were fourth quarter and outsourced below expansion outsourced setbacks, large our as included soon demand A ACA they encourage our was for main We address external our of began driver also shortfall portion enrollment at which an plan. of agents internal currently the taking steps well we of underperformance subsidies model.

onboarding supervision were agent a to years. Some remote of training forced taking due model. COVID, Because also in was and later compared of prior we this year place to to the conduct

telesales agents. model limitations of access we of high our operations. This as more saw also became We obvious to scaled the quality in outsourced terms

roughly As soon their worth the exceeding performed our above by our external projections XX% force. in agents agent we improvement. during a fourth XX% as of is agents, the we action, of bold It with increasing expectations, terminating quarter year-over-year one-third with our that internal AEP conversion outsourced recognize aggregate, our our took rates noting issues

compared pull expected our lower lower to generation to increase our volumes period competitors DR quarter, on call from On in this to vendor costs leading we combined agents, significant spend return contain To annual TV by relative acquisition a our observed this in the enrollment acquisition the side, costs, reduced member our the back on than during we ago, the with channel. investments our spend channel, rates Combined channel. significantly carriers by higher TV a expectations. the and conversion leading direct per year this during in to DR demand TV

pandemic the extent, the on consumer to including our factors external demand that and a believe cycle, also impacted We platform. prolonged election lesser

Going enrollment or the into traditional Medicare a tailwind annual for over shopping face-to-face meeting phone, XXXX expected of a the online more with period, broker. instead Medicare for senior we

However, was we led on health to reduced demand there seniors care, now switching. which an offsetting in non-urgent our Medicare view, plan believe postponing impact that from

Given be of work their our negative services critical goal, fix this come and foundation the quarter beyond. that me of believe channel, and isolated to the to can portion networks We impacted enrollment fourth we issues conclusion, including hard XXXX a in our we leads took traffic corrected our that partner hospitals, reduced decisive had leads strong pharmacies, factors long-term were continue a which strategic on these near-term. from utilization for performance and the sizable foot the impact a and towards and submit to action volumes. performance our In believe provider and

the just issues have performance. quarter of fourth our heard we have that describe, me you an As impacted understanding

address We in a place defined plan also have clearly to them.

to Medicare We our are plan, continuing and while this expansion pursue market share. executing enrollment growth on of strong

agents this telesales XXXX. First, XX% vendor in away agents toward our gap Historically, agents. better internal in-house and widen compared accelerated that on produced vendor in a shift are agents further we have the rates third-party and average conversion to from

we grow year’s AEP. and Our less than goal total of headcount our plan our to for agents telesales care oversight new our a agents implemented Both will agents that lessons agents through have also We during combination have productivity that last groups we and onboarding confident help performed the AEP. learned from remote environment Notably, internal this external remotely. agent force work is customer well and XX% in in this taken we program success. at to centers a work are increase onboarding the

largest our our by optimizing marketing and plan leveraging channels, and our are we among like the the lower unique where emphasize LTVs our to competition the to strategy compared Second, can channels. we of at strategic broker channels platform from member better also acquisition capabilities online costs more channels the The traditional the ecommerce differentiate selection platforms. partner case and in forecasted per partnerships, drive online enrollments partner and higher

described, Importantly, the demonstrating initiatives that are results. I’ve just already

First ago. strong performance a a in initiatives increase us quarter channel, increase seen we pursue compared in reaching in with approved online quarter these XXXX. have gives to agent member’s contributed Combined marketing same this to-date The XX% broad strategy. Medicare year has of success confidence and period to sales XX% over the marketing to-date, compared our Advantage additional to productivity in changes to our early to

We activities campaigns and member driven that to span lifecycle, are to range products. with on broader transaction customer moving marketing cross-selling a from away focus focused retention that acquisition onboarding of

points. XXXX, I over emphasize XX% enrollment sales made and quality marketing grew our want to We a we a implemented major members key In and engagement. approved number strategic Advantage few it a of turn shift initiatives key Before and I customer bolstered towards and to Medicare our Derek, organizations.

aggressively end our the have to performance. growth. financial our proactively Ultimately, factors we that year our is and firepower addressed business strong have We impacted and accelerate the

Derek long-term scale and Directors I the making in next meaningly growth the on a to the have in very of its the its over one to we we’re phase us of initiatives into innovation. months now that member to am Board turn we our CEO, meaningfully of company I CFO, put largest Yung. approve and and performance The individual it eHealth deployed investments As XXXX. -- foundation of track excited built shareholders, recent about

detail, annual XXXX today’s guidance our fourth Thanks, key our everyone. On afternoon, assess greater Scott, provide drivers over quarter projections. and and go will good call, I behind results XXXX the our financial in

counts Scott while increasing year, in expect XXXX year will us improvements of our allowing on the profitability. this XXXX. drive today’s growth, Throughout our Medicare into meaningful outlined references rates I the unit quarter high enhancements quality full fourth by growth to to impact will making be We operational presentation, translate Medicare enrollment to and relative

a As our emphasis worked accuracy increase valuation to an lifetime statistical in we XXXX, retention with estimates external member Advantage fourth the quarter improving the on forecasting corporate Medicare consultant reminder, of an tools. value by of incorporating our with

million plans cash XXXX in estimate since As selling a of result of a XXXX. impact booked enhancements positive Advantage a in Medicare revenue of to we our we for from LTV model, collections change and these $XX.X began expected through commission QX quarter for products the third

today, Medicare by growth in this was Advantage that it to an the enhancement in from consistent For increased our $XXX.X QX values Advantage year were full the It remarks for XXXX will approved an Medicare year in full XX% driven last million compared XXXX, quarter related non-commissioned XX% compared results. generated particular, reported be Advantage ago, lifetime for XX% is declined segment million year-over-year the comparisons in XXXX. primarily revenue our a expectations XXXX the purposes XXXX from XX% of in value million, which members LTVs was for also our XXXX. in Medicare non-commission full respectively. primarily reflective of the increase and members program. year quarter XXXX our growth quarter our to In Total offset an XXXX Medicare the excluding model. excluding revenue year revenue revenue $XX.X of fourth of fourth Advertising in $XX.X MA XX% quarter declines grew year. year was million my Fourth in XX% XXXX compared to was the and increase Full earlier revenue. a Medicare in year or excluding Medicare year-over-year ago, and approved XX% churn to revenue with revenue or $XX.X Plan of reflects Strong and $XXX.X I million the our fourth and is in constrained lifetime increase levels the growth of LTVs. Medicare business by in X%

on to As we observations. accounting, churn lifetime ASC values XXX are reminder, estimating in-period based historical a pursuant revenue

members volumes discussion put reflect from XXXX, an the Prescription decision I of The year. seniors and impact guidance XXXX projections continues driven PDP center the this gain continued decline positive in was compared full the PDP a built and increase to our marketing year our activities on towards Plan Medicare the coverage and a have plans ago, Medicare that members drug business, among number lower in as For Supplement these to which to by rates approved reduced demand the to Supplement known with in in MA declined this driven selection Drug prescription place, plans as combined Medicare year In a in of for was primarily shift fourth broker MAPDs. expected and The will LTV the for call ago. to to PDP quarter was popularity XXXX compared channel, will we partner as resources our quality, well increase. from which as standalone affordability pharmacy product, share later year cost the approved retention call, commissions products compared Advantage by

the Medicare the million For compares quarter of of quarter in to the qX model. the $XX.X the of a enhancement LTV XXXX, of generated of Medicare Advantage $XXX to fourth million. $XX.X the excluding XXXX, fourth related million This impact segment of our in profit XXXX,

unexpected on marketing AEP. the the segment of review the year the of $XXX.X during compared segment well detail reduction primarily ahead fourth of demand consumer was was later million, as driven my growth million profit more number reported to the by underperformance was of certain Medicare For overall XXXX, operating I year commission’s approximately CMS. reflecting the Medicare XX% compared growth XXX,XXX generating The in quarter suffered end $XXX vendor the will in full an of during excluding channels was The estimated $XX.X call. the agents Medicare profit over year of by to XXXX, enrollment at the and of in our members expenses XXXX, increase into go that XXXX, Medicare million.

line and Medicare rate members XXX,XXX was growth Medicare the compared of membership that estimated in Please grew note quarter in reflects XX%, year. calculate States. XX-month and that observed previously reported the Medicare efforts report we our to significantly the Advantage new April, our improvement trailing United Advantage XX% in QX Advantage in When business expectations. churn we to on still we also churn that show with we Our we that our estimated rates our impact be last enrollment implemented overall XXXX. the our retention reported fourth membership of estimated first initial elevated results TTM paying and we in expect would the ahead churn quarter of The an early XX%, based in able

XXXX their period to churn enrollment from We during highest is in policy any that the year at expect from of annual a AEP has AEP compared period the it first Year enrolled a the critical XXXX. lower churn members in were a been rates that MA standpoint, cohort one last will in life. QX because of historically retention during

XX% report from as was churn QX segment place about Full we increase time the year opportunity during open residual about plans. have the this $XX.X some we’ll small our segments family XXXX. driven switch and data MA Fourth period XX% growth that $XX on members XXXX results, existing XXXX a While we more individual ago. compared given the takes in family an plans. churn, have offers or ancillary of learn comprehensive impact individual, quarter million, a revenue was year and of revenue data by was members more tail when increase later our a to year compared primarily and from in and lag to Revenue view million, to business Medicare revenue a we’ll another about on enrollment QX

of for and products year to year continue on small in from standalone the for fourth and a segment X% and quarter remain to continue ago, as in basis, particular ACA increased Commission our We profitable XXXX million for small we eligible of in investments segment subsidy this group the business. declined see XXXX. full products. short-term to focus $XX.X profit XX% and for business a in retention our the million a business business, individual, plans Medicare $XX.X full the quarter family fourth The generating member year revenue compared

compared fourth to XX,XXX estimated and end the members increase at fourth or The a compared year-over-year revenue in end Our XXX,XXX, the quarter products a approximately XXXX. quarter -- the X% XXXX. year, estimated Total ago. of we the million and on XX% QX fourth a to the million a excluding XX% reported year ago. of family membership individual million, down year plan the the number estimated XX% the the impact of of approximately $XX.X for year XXXX membership in at was end the for of XX% at growth Revenue million $XX.X small business a was quarter $XXX.X full was $XXX.X excluding increase, was

our Now profitability expenses I’ll operating review metrics. and

plan agent achieved for to more member leverage XXXX per and enrollments to online. XXXX. two fixed build of We through EBITDA plan lower EBITDA Medicare and costs conduct on approved in profitability was XXXX targeted margin years improving expansion and consecutive of Our cost our

to down our the successfully vendor slow XXXX online fixed was agents of enrollment increased the fully offset our overall shortfall. XXXX relative factors enrollments, impact cost in by positive underperformance we and percentage of unassisted Medicare While and growth these from

per the agents demand expectations relative During rates acquisition resulted in quarter, with costs in that lead member our TV this channel, fourth levels. our higher business. Medicare we and in converted Combined the observed AEP, unfavorable costs XXXX to our Direct vendor this lower at

to earnings quarter This or XXXX. and to year $XX.X our net margin. margin, quarter XXXX, the of EBITDA impact description intangibles increased representing refer income by XX% the excluding the of EBITDA marketing in a XXXX $XX.X fiscal investments costs adjusted fourth for campaigns quarter was for Adjusted in investment. care a full margin, the quarter to Total volumes and growing expansion, XXXX year for XXXX. anticipated, growing XX% compares EBITDA compared variable we to adjusted to how XX% XXXX that for the quarter, over the our full XXXX, call the QX fully rapidly QX and XX% involves time year and XX% improved, enrollment not $XX.X of fourth marketing vendor declined period. costs during was in acquisition of enrollment prepare $XX.X the but compared XXXX. agents grew side, enough XXXX XX% the XX% acquisition quarter cost agent million costs $X.X Non-GAAP the prepaid of quarter member underperformance periods. we member $XX.X costs. fourth revenue X% restructuring overall and for After or and million including GAAP costs, compared acquisition customer we the charge on Medicare per with non-GAAP our of exclude vendor metrics amortization productivity vendor agent In $XX.X by costs, excluding AEP compensation, general fixed Fourth same Please EBITDA $XXX.X million approved a impact time at addition, mitigate and XX% a million the content million we technology ahead administrative terminated On was which over to which million. larger underperforming made of or costs the of same impact fourth margin released the center upfront XXXX million meaningful the the per calculate million, stock-based positive to EBITDA. of fourth capacity a

negative fourth Our quarter XXXX quarter fourth for a flow the operations of from compared million, negative $XX.X was cash $XX.X to XXXX. million

expenditures, operations software developed full costs flow the full million. for capitalized Capital cash year. million approximately internally include negative from of were $XX.X the year, was For $XXX.X which

potentially million. Our December ended our transaction $XXX cash, a We as with were XXXX excludes its with our annual receivable marketable debt. HIG of closing. year cash the no from Capital now, this guidance And XX, commission’s note XXXX equivalents provide securities balance that Please with I’ll guidance. and million pending impact $XX.X of

million, We’re million individual, small forecasting to in $XX and $XX of range be to revenue million revenue million range and million, for -- family $XXX with the in $XXX segment the $XXX to of XXXX $XXX the in revenue Medicare range million. of segment business $XXX to

income We $XX to expect net of for million. GAAP XXXX to million in range be XX the

in the $XX Cash GAAP to is $XX per share be share $XX to million. low in expected compared million. to we range last Advantage to year. family expected and is We expected $XXX be Medicare to enrollment be to $XXX in of expect for be our the in XXs $X.XX Medicare million profits in per lifetime and cash range to and in Medicare use per EBITDA Medicare XX% of share to guidance is Medicare share. net a Medicare range to range the products segment capital XXXX enrollment the XXXX million approximately XX% to in is levels million revenue a the full XXXX. XXXX stock-based to individual, XXXX to XXXX expected non-commission range share. revenue growth of million our compared to is expected XX% for $X.XX to in Advantage million, range expected X.X% an small be grow the $XX for expected to At midpoint range total XXXX. net $XX is projected of for be income and growing of year profit expenditures flat roughly expected used XXXX $XXX in million the of be in year. Non accompanied is adjusted million share and is service the with $XXX segment compensation shared million. revenue to depreciation $XX expansion income in of for growth $XX growth, Corporate The increase GAAP to be diluted of time, million business implies currently excluding approved XXs expense amortization diluted $X.XX to XXXX the million. of operations our main of per to be forecast expenses, year with we driver to expected growth per growth the $X.XX of per to will be last Medicare after revenue all with to same this high the roughly members to values, expected by enrollment compared $XX close which range

total Medicare and decline member be our combined margins our by of these in adjusted the compared costs roughly compared an expansion offset expect net will tail addition, deliver on XX%. contribution XXXX meaningful guidance, applications. in to expected EBITDA reduction we of see leverage member and IFP margin DR our in year-over-year with force unassisted our impact per XXXX. ‘XX. Medicare acquisition by enrollment of due across The year. in margin our have agent a we’re productivity XXXX, some revenue in XXXX. our revenue. to contribute to This a tail to enrollment expected Medicare, driver to continue for and around in our Medicare margin full our in XXXX as in in like enrollment also into to to our margin quarter or expansion a partially improved marketing seasonality we a to booking reduction The comments to Medicare areas timing business to including to result the After fixed LTVs Based disproportionally positive is economics selling residual by revenue of of from would generate TV no The open Medicare $XX expect In a in aggregate with I revenue to to non-commission expect annual items mix and driven revenue a the with per a XX% primarily factors cost on changes extent EBITDA member ACA decreased in in period our year acquisition that currently and respect residual decline to is Advantage products be to reliance period of adjusted lesser increased forecasted we and revenue these forecast earnings season. and million make the on EBITDA of increase fully will to ancillary our midpoint fourth this revenue higher costs, little a online tail

in our In majority expect vast fact, drive we will to fourth XXXX. and revenue growth compared of a quarter XXXX EBITDA the

QX terms In half of churn for down of prior to LTV and the the XXXX, LTVs we largest we’re significant LTVs, projected year-over-year in year, currently of the enrollments of increase that a the We deployment of by driven first will fourth quarterly primarily our the second our the QX last with MA increasing XXXX. of in in or to compared of quarters expected reflecting in in increase Advantage XXXX, Medicare in to better program. be believe first what XX% cadence start of quality year-over-year impact quarter, forecast was QX of retention

growth will offset in revenue So digits while strong total resulting member growth in lower QX by be revenue, LTVs see the to in it first quarter, lower we expect to low-single XXXX. and a tail compared

expect also We the to down quarter be and revenue. due tail lower first first also XXXX adjusted quarter compared lower to LTVs EBITDA to

enrollment comments online guidance are business may XXXX strategy, Medicare current and based our these judgments, we medical total which time. and online represent major remind any that XXXX. current want enrollment, of will to XX% to change our for indications our the estimates at on to Finally, our assumptions our XX% expect I in you and compared with respect

assumptions no our that, differ guidance. obligation While our judgments, back result update or for the comments over With I’ll our as changes Q&A. of to a actual turn the results operator we in call to may estimates, and undertake

Craig-Hallum. from [Operator line question from Instructions] Your Sutton comes the George first of

now is line Your open.

what I you online goal wanted address Thank just XXXX to your about for XX%. you. being said

I’m curious as higher ended QX that XX%. in given have a that strategic the number advantage isn’t clearly why market? you with You

to and XX% it’s conservative, is with percentage that in year end -- fourth hope historically, did QX. George, we the But proves weighted we it the Well, quarter.

So always off started target we’ve QX. it in and annual below up then our made

you. Got

you’re growth. the you investment well, mentioned you HIG Can accelerate you you give You say cash give need that than business. your growth give to a But to? us pertain of your did to would might accelerate or more you sense it operate what opportunistically will opportunities

opaque, ability conservative to guidance be it’s intended not grow than it’s establishing. about Really, faster that to our the we’re

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

now line Your is open.

you a grow, sort Thank those proportion and are guidance pure to of forecasted online about whether enrollments this XX% talk year? you. as figuring that within Could

Tobey. Right.

our for increased we year last So guidance QX.

the agent. It’s were efficacy are the as came shy are our and is online not XX% at but where we in partially same a hit range partially e-commerce which Our agents that did and agents. expectation XX% It deploy enrollment our agent for and unassisted and we that as seasoned assisted assisted just And tools of because missed. non-assisted between XX%. to number was and a newer with the it’s

to the, Could and think Okay. you how start and and how. customer this up catch when the on the about went center will you rollout us the maybe talk impact business

spot it the encouraging. XX,XXX us. We Well, October, between would launched QX and hope, in seniors XX,XXX bright it for was Yes. we register. Certainly, of very

authentication through information format, by Where if will logically, DRTV mail very they you’ve to data less As information of ad hour senior coming registrations, entry you now, time were XXX,XXX of doctors at us two what a of all bullish over about it, we it reviewed to have it protected. the direct and number drugs know responding center. when just be they amount it. that’s piece think at will enter phone. our of a their you a the in prone came or password in - that repeat to retention. on believe secure to benefit for switch about over to we think customer be it have predict that invested would a on both requires feel factor and and I least It’s good But early an enrollments A

think that be engagement this we effort have So also going on persistency the improve the we all is seniors, enter our of made to with long seniors to very feel information. will the that but that

agents Okay. Last the and keep company different have your seasons. question on needing non-Medicare the to well strategically, what from you selling productive to your me, during busy, paid of thoughts some internal businesses, have are

would Tim to but like Yes, on in weigh I then I’ll start, this.

We have with seeing you outbound forth we’re perhaps improvements relied of enables could all to efforts back primarily this agents productivity but, inbound on a them an the inbound speak system that, from model and and our cloud-based we and outbound, deploying that between are to Tim, telephony empowering and toggle bit. increasingly

you’ve point, mean important hit an I Sure, Scott.

for are inbound more to them then versatile We productive switch the Scott in outbound pushing during ways our agents productive inbound only. be have past, and more than in with and as saw they mentioned to more the been be and internal them we just AEP piloted having agents

between experimenting we success, toggling acquisition QX. provide additional for have agents and with activities but agents as earn our other retention also and We our business lines are to that QX will activities, are and we in opportunities

vendor could it’s more more becoming is as workforce, and we aggressively in workforce the we’re able the an them versatile So invest to with internal than workforce.

comes Your Credit next Singh from Jailendra of from the Suisse. line question

line Your is open. now

figure. that Just XX% external not XXXX having curious with first quick clarification any on groups? vendor target your versus XX% in any about these contractual agents of XX%, curious your agents. agent Just there just internal why of go all that and obligations XXXX Are comment

we that are of came our But average we let logical. year, And What agents. as the we a go third I when agents our agents. found terminated at typically vast the than Yes. external Year, question. the we XXX performing higher majority we have into seasonal rates New and the it’s a understand internal over of over

up reduce are against third it third-party much that outstanding. not, why be our And as think agents. on and agents. be of staff that’s capacity it going anything to magnitude did Jailendra. reliance might perform to not it our of just don’t us party model you for we’re external could agents, when that going So, them be XX% some so that materially did It’s last to have the We year as of we

did you in like year to this add XXXX. fair. plan many figure the total give how you That’s And agents

It’s a Tim. lot,

giving not is specific be but focused will it we’re side. entirely on the - ramp agent a internal Well, number our

have our on ongoing just the vendor starting high the flexibility this to partners. So to earlier we our build But and and intention and will year. the we’re side performers the keep relationships internal with ramp is

first been has Our class already hired.

for underway later will and guidance So the AEP on provide we’ll in is ramp our the already year. more

bit little out outlook Okay. XXXX. which your to flat flush respect you And you then expect one, can in a about non-commission be one more to last with year-over-year business

Some of your drive talked expanding these to dedicated insurers health non-commission peers have these partnership with business. about

your business? prospects the in about how about thoughts non-commission long-term curious think do there. Just growth that you And piece of

you take one. let Tim, that I’ll

Well, really, I It the ways some think non-commission piece. in performance. the lags

shift we non-commission QX, in future. outperform have modest underperformed think to in having of the much can we the of line as how expectations us the then see strategy expand expand we’re that in and we but able this expectations, with so benefits And can again

the comes line Your question Styblo from Jefferies. from next Dave of

open. Your line is now

Hi, guys last Scott the XXXX. thanks good It over a afternoon about and time. talked from outlook question on or just the Derek, margin mid long you business XX% question. in almost for you from wasn’t a margin a the - year for that until growing

would, approach cash XXXX. then in positive something turning XXXX would and So in that XX% that operating flow,

sense peaks harder or are it attainable. be objectives. there that a the of glide it’s will to in in how change the much a you way feel give slower, can those us They make way to So that that such not achieve outlined or be might you Is longer-term those business about those targets? just going path a

I’ll start to pass Derek. it Yes, then and

We are behind. a year

last So have the, period cash the issues issues. out we flow which and by Dave, AEP that they’re face, were positive extended issues but that will not a sure, we with isolated we really the for industry dealt achieve

So end to we the work. just ran seasonal our into of the make model agent natural ability

XX% actually our had in improved to improve the formal commented the, would projected missed the internal underlying productivity opportunity improve. they agents We margins productivity QX, And that by are by in We notwithstanding over script XXXX. that our XX%. so our

expected. in what we So productivity XX% had to we our compared a overperformance

XXs achieve plenty the not, maybe margin see doubt no So have high XXs. to of it in the will I we levels. Will we those out-year room. will Derek? we but that get be

of roughly a side. breakeven flow Yes so, cash in cash we on in that what year flow we Dave. right operating previously we behind our of is relative expectations Scott stated the terms cost, to where are are terms have

an economics, in unit in levels the to to our economics closely saw implied guidance in ties new which we XXXX. margin the On that improvement is

we’ve So been year where a tracking about to again, behind on that.

cost that online with or which leverage is as in unassisted an for online. we of said, did targets succeed expand area we XXXX Now biggest enrollment

still get online ability to item leverage is in to terms financial an give leverage. favorable that us more So that will of traction

produced. the that fourth quarter. Can area it. third of you the have there you external guidance, and tell is I the how that of those on got me the about rates versus of productivity guys you a eliminate there. can But you’re of is about then retention follow-up them. X.X% question quality Okay, I outlook, I are talked of in any risk those agents the concern Obviously much a business the to sense that a decided improved on seeing. you one that that’s that in would capture the the get signs guess increasing comfortable retention improvement us LTVs encouraged that folks And to? the give expecting embedded that and would expect the would you just guys do there some going MA is know be by you duration and you’re not long we just to having as really you’re as retention how

Okay, Go Derek. ahead, go ahead.

Yes, going in and retention. I’ll on the to LTV relative Tim you, it back expectations to And I pass improvements Scott. as was well the to

also that improvement impact retention and we AEP that, within quarter that commented least prepared is more important expect the at given is that obviously biggest improvements, that to seasonality it remarks, the benchmark the important in LTE XX% where Dave, and talked LTVs, that about happens the X.X%. you on behind the full the year on I in X.X% of in or but given keep is so efforts that the QX, which So in mind basis, the XX% the is

year. will this of CMS half come rate given what the as terms through of increase So in increase that determined for more rate than has maximum

outlined the to us would and actually retention churn we in be earlier of those what the of set implied full than If improvements plus and we when last rate have initiatives guidance. year, better initiatives change drive you - potential improvement of initiatives aggregate churn our recall, the

that come hoping will actually we are that through. is below So level. guidance that But our obviously

our which What XXXX in agents internal I enrollments All we higher would have XX% enrollments. of had our XX% and the this year right. by agents was of external that to fulfilled course than persistency, of add is,

in from shift mix to should we internal team significant to our sales and had all conversion agents, just the to LTV which segmentation initiatives, on of being retention compensation on revised toward a focused changes profitability. to lead other addition So and focused total

for upside really those Dave, factors, to LTV us. should of All significant contribute

next Your Raymond the question Greg comes from James. line from of Peters

Your line is now open.

is guys [ph] me hear for afternoon, this Greg, okay. in calling Good you can Marcus

Sure. Yes.

the year. that Excellent. approved My first in so fourth congratulations XX% than correctly down first I question Scott, membership number again is on that and better you on And heard mentioned is quarter. churn about quarter the if far last here in

apologize, of year, reported the churn some that’s you think you spiked. first last similar - quarter - of growth reported and churn when ‘s quarter last and that in when I the fourth that rates, year,

year? I churn last guess be first you relates is should half happened as the over question how it about quarter, sitting thinking So guys quarter what we here, first as are being the to of of this done,

Yes.

in the that generated AEP. we learned XXX% we when related that elevated we we experienced we believe that last churn So that the the XXXX MA to had it growth year that churn,

QX. in So it but the, the enrollments related churn was was happening in QX, to

show a a end point and to have we there that churn a is, line we both these reporting that on tried in be. on I QX. at I healthy decrease bottom of read exactly So, have we in are out reported what don’t when lag Derek the number is to will But, mean churn expecting statistics.

But slightly to what decline to track expecting out a limb significant on we’re churn so is And that speculate want today TTM XX% was are and we indicators don’t down from but more after QX. QX, to favorable is, all a XX. continuing number go that on in favorably,

give at presentation, green year, in it really it but that down, And the of your on guys last helpful. pull there would cash there dipped looking anything Was add remained pretty, clip. could number? here and that color follow-up there you Is pretty forward, any different line us collections. slide be Could a That’s in X commission I’m Excellent. helpful. year there? more something My stable healthy is some this you

Impact, whether does collect and is so someone around data indicator effect cash not any was or as still coincidence policy that’s us our is analytics it for churn, corollary operationally on pull monitoring since not on an a have improved collections not. have a forward our also to we There cash, ability of a

the perspective. to There That’s record carriers, reconciling been are allow reflected we whether operational with we’ve So along improvements retaining our data also some also status broker improvements to collect from improvement. us commissions. which lines our of has continue an been will to that making

in. more If it. can Got I squeeze one just

So taken for be on the does operating include the Does include the the with preferred shares not dividend. it impact out be we’ll and agreement to paying special of the the outlook dividends go EPS?

Yes, that’s a good question.

the it So impact as is today. you’re of affect investment it - impact right, the does and guidance of not the impact the include would not our investment

it EBITDA On security. the revenue a below side, complicated was EBITDA. It’s

the on the common because expect in to a we net the convertible in income of the valuation. line which on price is, expect a be below range shares would what EBITDA. current that price terms income. between impact is will EBITDA the the So net could given I would has which strike will will terms on impact below convert impact And items be ability see also stock it of the fluctuate dividend depending I the be there and and diluted then of payout, in that

comes Anderson Evercore. Your the next from question Elizabeth from line of

now Your is open. line

have of so the numbers, talk XQ, understood on you we’re to I that last XQ sure those comparing churn apples-to-apples did that an know numbers sort and some about, Can terms of shift in get wanted that basis. make you we just we in I to when of XQ year some

happened churn was good Advantage We QX really XX,XXX commented of post disclosures, reporting have reminder. last rate additional in in Medicare year we for in then subsequent observed reported had that a had churn XX% that’s QX. Elizabeth, that our Yes a TTM we and that

basis, adjusted comparison QX an the in right year and we TTM closer XXXX. have to XXXX XX% the that should is get as on into for been number So this QX

you talking one persistency, Got in of it, both Telephonics. the that the on that’s just and ups Does internal online of external was you maybe of agents the thing super the, more sign helpful. And versus about were terms the the that online persistency in ahead clarify quarter? can the

that take historically had enrollments method. higher than online one. I’ll telephonic Yes, any Scott. have persistency

telephonic. Any

was wasn’t Okay. sure sort It I it just there. should whether external emphasis of just. and have or external. to of internal the growth the just It’s point

So..

Yes.

Kinar Goldman Yaron Sachs. from Next question is from

Your line is now open.

guess you questions to as wanted one points Why of well? in was that my, answered, I wouldn’t new have ask the agency. as I are internal about out pressure external you onboarding the called as but thing impact been the my most internally agency pressures well onboarding agents those

Tim?

Yes.

the same divergence to able be effectiveness were as and previous the the it management with see a in done wasn’t the to agents the experts way So subject that actually expect so in did we in internal vendor think rest par primary our to or our deliver same reason years such has because agents our workforce. not is we with of hands-on the matter just season that on remote

feel weren’t able have So we past it that were them like effective. them same was site way that that be less the they in we we coaching on to in with years

Okay.

first the you prior measure if or years would internal the year agents would, how the measurement were compare productivity success? year to compared So of productivity to you this of

than mix, internal be overall internal in our expected be. the We years internal it workforce a to than productive were they higher workforce. were previous because They we large more total our portion of saw

so, expectations years And of those as ahead well. first were

I’m incorrectly. thinking about it maybe then And

Derek. be So when, And appreciated. any help would there

I’m really I of that think bit expected guess in lap kind I a you little mentioned confused is, of LTVs you second half have improving improving. this the you churn had and year. where start

half? LTV why think the XXXX lapsing you wouldn’t the earlier second improve I see lap or the the we off cohort LTV have measurement, than coming

Yes.

our which by is, way actual model is looking the prediction at works, observations. So

data not picked policies the see AEP we people are January have get who of just up effective that in XXXX which coming projection. out on XXXX, LTV until will that became the So

QX So will quarter that in that improving the will with be those come be enrollments expectations group being, will that which following was in LTVs lower, churn drive year. for that the this will year

quarter? the you don’t data But, churn by the observations and second have the Right. the around

We are will, those reflects but QX. data that cohorts enrolled in

a on. year So prediction cohort also on is the monthly all

someone So October how be when we who persistency for of to predict we what and we based historically. January hey, we’ve enrolled for do say, effective off expect different in seen

our historical seen have we again. have the against we’ll measured right, month be you’re are that to observations, those that So cohorts

Next is Barclays. from Jonathan Yang from

Your line open. is now

for Thanks question. my taking

from through if shifting provide your away had generally, normal channels on, channel. member that shift of channels, but any you count You for channel that then your will approved DIRECT and more year. make pulling mentioned TV up other of and can kind pull How out much color and to on

Tim?

Sure.

a because to used up this due spend be and performance weren’t third channels. cut. down to channel the that that when in demand of the in just We mix there of year the poor the vendor previous available pulled AEP of much that to we saw, able our other to ones a we challenges agents, TV of seasons our So converted was some portion larger we

So shifted away we mix we’ve into seeing, as from are QX, DRTV. we’re

on sources. our lead rates other We’re these growth of strong seeing healthy performance agents and

So as of it. we feel is down lessen dependence plenty our there and we available offsets take like on DRTV

count not a agent considering count where external I get the amount goal you’re agents. the to And but cutting year least, you’re a to of mean, back then or ended at, significant is year, at know specific hiring fairly you for giving I the

more I heavily we shifted who and be it of using joined we people towards the be but internal, that. versatile in take finished more will are ways. I’ll mean, will where earlier vicinity the much who in year, have

from Hill question from Bank. George Deutsche Next is

is line Your open. now

start X% came you I’ll go expensive seems the excess can Derek. seems this how that the but pretty I the or answer kind capital one of in I suspect market. was financing about off you the HIG know Scott this, right cost - a on guys of guess to talk to with that, capital, raise with I pretty to way route

a guess follow-up I I about to as that then have love well. ask So I’d and

in were it with was competitive stake them, There as in partner had understanding improvements, wanting invested and see the management had was Yes, eHealth substantial we a as our it. right. on give they my other that and opportunities. opportunity perspective, expressed getting contagious very who excitement with also investor accelerate an and onboard base business. went the process. from alternatives. someone about who They us we us those them a That would but that to capital aligned the a as thought We they well bringing this tremendous HIG, because they All was with and George, for operating equity early act both was institutional right our do,

and in and refusal a well that, again on is probably the months. need probably Okay, the it if about that’s should, capital subsequent would give let’s I to but does targets if grows, at have way model the think near I HIG guess I helpful. capital the meet business Derek. be as I my I them then the term, you the guys the kind how in And guess, agreement you right like know to position business it ask it capital, growth of look sounds guys might guys you you with call first XX raises? of the

good Yes, George. that’s question, a

this pursue we half capital materials, When So that outlined. raised for so and not now that the only another are improvements we you’re capital to seeing do year would that we of right terms the and of need we and improvements year right year we to is if the unit a that we HIG had that a was out expect look we drive course But both from improvement. also make LTV important cost growth the we’re would growth. in expecting that

more we and of we CAC don’t improvement. we’re too want until to ahead land in growth around are get about kind of have terms far seeing LTV just of terms I will discussions rates where to ourselves of thinking what where heading, So in

is guess dollar buy, do put investors of to Okay. next question the market But they, do public right do? kind the I they the have before to in

answer the is No, no.

there refusal to no, the that first in provision. that provisions raise that are agreement allowed there us within all, So or capital consent and without their of is

online phone the I guys guess enrollee talked you the to go gives better put assumption, I and are be I back year and seems but that I confidence drive can more understand you been next completed came what has to talk color about tends which enrollee And increases be that up. I should last testing in model. is to would than what kind kind in were enrollments, versus to of underlying of the more love able gives retention the then higher. given guess, going Xth numbers guess of ask, in forward, there around, hear Are my would the one, that the that of would the what over the is the new half to online, just the of in the those you the persistence market a pretty in that have you you about to quarter confidence back new I be applications LTV know persistence,

Tim it. take let I’ll

Sure.

of factors us the are there out you confidence. that sort give mixed So called that

more agents, So of channel came enrollments the more better online mix. internal that from our fact growth,

much churn. more on and there through GAAP All to clear helpful even and But impactful retention going consumers. call customers there email by to questions be had. customer can up job the better phone them. outbound needed, we’re the and and not proactively get questions have they still doing ways that a experience teams customers past based should where to exciting basis they on back was an or answered of those And we with a probably experience help experience be our is existing they’ve would been the things whether our is following the what’s they with that if connect And by efforts in it understand that

meaningful ever some of we’ll the things indicated cautiously compensation the signs July onwards we’re should in plan be have should churn like it getting on be, we of so these than had that they watching and our So we’ve from of movers suggest better sign every the a what’s of read and, sort better. and teams but book early of and before, going be numbers

be And differentiating result follow-up. control. think lot Are add, MA know a tend here quick talked something churn I’m churn, and I retention between ask because is just a as about we’ve to we to that to something that market while retention then I churn going in your of at least should a as and you that happens the of

differentiate churn you could could improve if versus of, for me targets you So I reduce targets kind guess to if just retention. to

for a are seen policy, and very never we development I calls a use and plan on of interchangeably the different you’re again a plan experience to for context things a customers and give not the may and you Yes, a plan just policy started on, before, continue things you’re little that’s to all right this pretty like Sure. beyond. inbound nothing looks bit do them different take and do that it’s customers the through we’ve than your our the reach losing data mean basis. as because existing retention team right on season, say, customer where be to ‘XX in in center to them will of done to customer or between we to hold year difference hey, But to the we go good, and anymore losing use our to from someone proactively are that build out this the

better to retaining to and expect we with retaining do the customers So changes better made. do policies also expect we we’ve at

Next RBC from Markets. Morgan from Frank Capital question is

Your is line open. now

agent changes the, the from more productive in that the from there of members? attrition terms a in of sales result losing follow-up you seen any One the as compensation. Have fallout

agents them them experienced because we’re to by encouraged way an earn people where and the mean route we’re have what right know sell in opportunity in system. to put a higher, in we how more score we the really who to know plan We more aggressively. built this I No, plan seeing calls how

performing system. the high system in have in old better than would this So agents do

upfront some structures to competitor cash on also receipts. changes just improve was about there call cash collection And commission in the discussion or some the the

similar had you if are where Just curious you’ve thoughts or what, on that issue.

can take that Yes, I one.

sales having top terms more same, other don’t, fairly what the and they’re performance help we cash we’re structure it in can’t I manage is and Frank, moving say actively to carrier I a something payments will engaged I’ve the partners. collecting more cycle upfront how closely was given on marketing investment cash commissions of carriers. in then that because our So and align later, calls. with that with the discussions to that mean, of us I are works upfront heard exactly top with kind vague life But flow also similar the also with with

and is just predicated investment, Thanks. Most XXXX sure does not Okay. the of your is I’ll a the answered, make but them investment just HIG reiteration. to have understood hop one been off. I wanted for I on guidance not, correctly,

No, absolutely not.

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

line Your is now open.

investments underperforming. I’d channels lead on the to TV, so curious side an the like among shift need here business of better direct the there a any on that does was response It to there channel are technology you Gen that bit to make on of over-reliance like is if back Strategy. one marketing focus sound when various

Tim?

made from think we issue comes I we number and had move think send sources. The Yes, a a agents generate have was could on lot high had where how side, and demand I that spent to where QX had we that though it. upfront even that have improvements a and good lot already we in better to lot additional We that a lead of to a demand, incurred really too. we of we’ve, expense in of understanding other then TV didn’t quality nimbly we’ve that and invested a

acquire to just other demand So send opportunity We to it in got to places. for have the there us was you. workforce didn’t

and strength, seems things forward it wouldn’t the had then due foot but partnerships channel channel, just addresses and traffic, to side partnership a on little side. really the And is reduction PDP one email like most of quarter weaker harmful, get you traffic be benefit a is that it’s it I But thought it from the on the of physical strategy the expected curious on the lower addresses, you’ve going was foot been this called out wasn’t on in than of that in that provider particularly the terms bit so the historically on case. but partnership appears what through

Just the what going forward. there curious is strategy

out blue Yes, absolute let exclusive and top because and the will of our me hospital did start bullish are remain partnership channel. the chippers, traffic, handed in. Tim add channel. that in of we brochures physically, that hurt very and XX systems, signed we these We can suffer foot believe us new of I response signage agreements the X-year lack terms yes, in on be

We Tim, also faced don���t growth in lap view specifically, the of of won’t had QX we I we for transaction to M&A PDP channel. it lot driving speak in the the was but in out have headwinds been that XXXX. an us. that partnership pharmacy it think that channel your of lost to through called a we one a partnership

mean but year targeted year and fastest mentioned and providers are and can and better every gets to wasn’t, would I help was more bullish our in conversations your us channel marketing we get echo our growing it didn’t sentiment. our I every engaging Hi. it with engaging it that quite how on partners expectations, more more more, and more are them. our we

remain the is bullish very future. this it and build there in us momentum for of on year will lot So that channel that how a in differentiates

you. turn at the more And I questions to time. for Scott this no Flanders remarks. Presenters, closing over now will are call there Thank

quality having the I Thank you, but positive questions we appreciate a everyone. you soon. more long ran of QX. to and I See know the much after update, look forward we

participating. Thank today’s that gentlemen concludes and you call. Ladies for conference

all You may Good-bye. disconnect. now