GoHealth (GOCO) 9 May 242024 Q1 Earnings call transcript

Good morning, and welcome to GoHealth's First Quarter 2021 earnings conference call. My name is Victor, and I'll be your operator for today's call. [Operator Instructions] I will now turn the call over to John Shave, Vice President of Investor Relations. John, you may begin.

Thank you, and good morning. Quarter call. First GoHealth's to XXXX earnings Welcome

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

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

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

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you first everyone. I'm quarter good and results to excited John, morning, share you, our today. with Thank

resilience integrity and adjusted to targeted submissions, our resulting performance period expectations options. challenging are the enhanced for these EBITDA. to navigated support proud in adaptability being marked captive from. response uncertainty. market grew for these In observed importantly, successfully team's them consumers doing choose conditions, by a on One-third marketing plans options maintaining XX% identified plan stressful. as open exceeded Medicare XX in QX's and channel GoHealth new annual clarity the by enrollment in are the enrollment revenue efforts I'm more plan. to Medicare of county people Medicare, and during consumers volume of in performance workflow submission the of Notably, States dynamics during need great and we half of our Our Over they with good. and Navigating year-over-year. our more internal our We Medicare can better-than-expected period, provides consumers confusing confusion in landscape while at million about Encompass Advantage and a live eligible the than of United XX and available be at and

our to consumers the are mind the not who consumers plan needs. is over also via process, know current enrollments in new via XXX,XXX result, options, consumers to XXX,XXX As first with workflow. is incentive to as quarter nearly navigate empowered we of Medicare the their peace enough consumer or a they resource make supporting decision-making their best In over team best training and Along PlanFit dedicated utilizing to where We important their objective decision provided QX, enhancing structures. shopping Encompass confirming and XX,XXX trust to of this proprietary begin. XXXX, tools, personal our CheckUp to for the and proprietary our them don't GoHealth believe empower

year. could more to vital and approach Medicare influence consumers. a highlighted market last traditional Medicare We a company in interactive integrated shift handful enrollment on In call, high-quality, company evolution we from earnings care, Medicare a our building focused in This that engagement our a long-term of relationships the our continue landscape. cementing with the emphasizes unique consumer factors to role our our performance and

reminder, the for plan rate XXXX the is year. As on first commissions notice final a

the is final from CMS. marketing role Second XXXX

and Third is Fourth plan efficiency the degree benefit is season. marketing finally, and this within competitiveness planned the to election is And which effect XXXX differentiation plan there product health XXXX. mix. on relative there's and health the between

our have we quarter report As first on the two factors. we of results, first updates these

base the benefit increase which for issued nonspecial rate and CMS with needs notice, margin market disruptions notice plans, does exits, final pressure final our increases expectations. aligned First, for the rate likelihood a included of commission XXXX The health especially plan. schedule which

disruptions consumer model. in These Though annual major Some growth seeking is their markets and disruptions facing period, could health for increased pressure, health enrollment during products. upcoming benefit earnings to dynamic business switching which are XXXX are significant plans many targeted a QX shopping margin plans calls. GoHealth's and specific in lead positive confirmed have the

serve. by vary the These plans will health to in We priorities to specific strategies targeted grow and growth products. is very in indicated positioned audience Some plans GoHealth likely have and needs we and health be desire geographically special diverse. health differentially able help to a achieve believe population, and ideally that attract plan are an markets

special checkups product the target trust at types. are best the shop seamless Our onboarding from We validating a scale. can our delivering and enrollment population, and industry we and enrollment who to in Encompass and a proven We've transition and based believe high-quality attracts who at marketing on plan members. precisely consumers needs with from should switch, building geographies might workflow engaging facilitates new we likely planted benefit

Second, XXXX guidelines. including rules, compensation in broker April, agent new independent marketing marketing final the with and CMS addressing published along

some has and guidelines impact remain that to optimistic a We health We rule with cautiously continue to to impact on a and interpretations. with direct economic modest GoHealth final structure basis the these neutral plans their discuss them contract for review oversight.

workflow appropriate for the brokers believe above amongst to their Encompass cash strong full to the minimal contracts Our place provide who restrict agents with needs. but modifications. we and support inappropriate of CMS We compensation performance, final against proprietary support consumer also only efforts compliance practices our and support they differentially construct not with rule enforce

We set by third-party a reassuring already on violate believe blatantly consumer, restrictions standard GoHealth compensating right lead on when has support also our generators a agents new they're the marketing the We that plan. laws.

higher is GoHealth CMS and to our these plan standards, to service committed industry best-in-class consumers exceeding to health As partners. standards deliver sets

continue analytics to machine touch improve help we and our rule. match consumers and million the Advantage improved enhance aligns We our this Medicare year, plans plans consumer experience. needs. for for We Encompass marketing licensed final to the has nearly best accurately and the Medicare operating agents consumer shopping with experience using tool believe their model XX to points with the PlanFit learning CMS Last CheckUp efficiency introduced from

processes GoHealth improving does consumer Importantly, we're call on in an time based not even enrollment. handle if are compensated agents year, on the streamlining Fifth focusing feedback. assessment and result

while and original during consumer-centric part an beginning the deliver our of quality. effort, are our and better positively anticipated consumer fall Encompass to are includes and built period. and changes second chassis workflow. As this substantively standardization annual streamlined experience ultimately, we to of enhanced These this maintaining efficiency more quarter the results automation in model Express enrollment tech-driven handoffs scripting Encompass a on It launching impact is the Encompass Express. financial using

proprietary a quality. overall technology relationships capabilities from are consumers digital-first our process consumer shift PlanFit consumer launching consumer and XXX, to efficiency and deepen continuing Medicare Medicare consumer agent long-term of areas and engagement Additionally, interactive enhance to our online. we experience, shopping invest data CheckUp in shopping investments testing -- enabling Customer start and to improve engagement finally, company our a in improving And Key include of quality. are part service experience, tool to company. the expanding a to These enrollment investment

are the of performance are to of out in second of still this year, most and following we to factors more play expect the half I in terms While other our significant, thus, in likely XXXX. the market continue mentioned they

volume we line with the in to expect overall submission market. Medicare First, grow

Second, to efficiency, modest we expansion. with our resulting operating flat margin expect be in revenue year-over-year incremental

flow flat revenue. Encompass expected we our to is be to and the shift non-agency up to from as slightly continue model transition cash into operations Finally,

commitment to driven support values with our value. financial long-term it will innovation With our delivering results. shareholders by I our the dedication that, thank detail and to ongoing care their transforming for are health strategic and consumer turn our like our to to to and team commitment We their foresight. I'd over continuous Jason journey for to

you, Thank Vijay.

first quarter net in QX the and XXXX resiliency revenues of improvement to $XXX Our demonstrated compared We performance model. the overall year. our prior reported million million in $XXX business

We sustainable to $XX enhance Non-Encompass GoHealth's due year. increased and but growth XX% consumer consumer of retention involves and third-party positions revenue sales marketing which of to agents opposed sales quarter, EBITDA, believe a experienced growth. long-term brokers, also support captive excluding ability from internal Adjusted the million well leverage for internal GoHealth decrease Our not resources relying technology, optimize on the was improved Services, short-term prior effectively training strategies. enhanced or period combination to as the slight teams our external and to same for a relationships, gains, efforts, robust only BPO channel,

shareholder with to sales higher performance for improvement $XX.X strong per our quarter. initial pleased in submission. an the operations lawsuit submission settle are We unit X% year. from million a year-over-year to public offering. Adjusted economic cash cost quarter XXXX per million company's a same XXXX X% to $XX.X with includes $XX.X partially to offset to due the submission, by compared million increased last gross QX a the was related margin This per payment

the $XX flow Excluding item, this from cash onetime been would million. have operations quarter for

trends, reflecting operating We dependable and continue ongoing efficiency. cash cash see focus management on to flow our

to March neutralizes a XX adjusted measure business period. our results cash In cash cash $XX the $XXX our of improvement the that robust was impact March in as XX-month to generated XXXX, quarterly our LTV $XX years. in EBITDA ended trailing from future related $XX of the illustrated million a of we XXXX. versus compared is an the We as months of million As XX, it prior operations presentation, adjusted of QX, estimates the EBITDA trailing believe million, million year XX, flow helpful

simply plus from increased reported EBITDA adjusted and change reminder, cash adjusted is has back year-over-year. contract As our the year-over-year this if has net contract a decreased, contract asset true the book is cash of net net asset. a the EBITDA higher If in inverse the collections result our asset the is taking

first of of an negotiated the in filings, the year-end to the adjusting quarter our for in the XXXX, loan noted agreement, ratio amendment requirements successfully we our leverage we debt facility. As duration

April. provides the few conjunction investing focus with business early optimize us flexibility our for the refinancing continue to next amendment goal loan the as will debt to payment aim on term structure. this million We we allowing amendment, to additional In a $XX while in we growth. We debt over that believe months this future support our made in

an in make to additional this year. $XX expect down million QX We pay of early

we market will landscape, the As focus closing profitability we evolving remarks. continue creation. to now turn call on I Vijay to navigate value for and back the

Thank the consumers. We enhance Encompass not believe our initiatives, implementation only strategic to particularly the provided service Medicare successful of workflow, you, operational quality our have Jason. but also efficiency, boosted the

in select enrolled currently with advanced roll consumer benefits than Compensation rather partners the policy align closely Initiative more out suitable prioritizing of the are they with are aiming most incentives new We needs financial discussions enrollment. Safe PlanFit plan in health the our plans to to ensuring by

is Our with satisfaction by long-term this and but communicated aligned retain not priority PlanFit trust. plans firm health our prioritizes Safe overarching to consumer do that also belief approach membership, only the

enhance our insights to the to empowering ahead, and Medicare technology Looking dedicated health decision. further care well-informed consumers, to them journey using make we for are

ready We question. now to your are take

you. Instructions] Capital Thank RBC Our will come question Hendrix from of Ben from first Markets. [Operator line

quarter. the on Congratulations

rule there CMS And some some to like to Just wanted was targeting within the environment. rules, more carrier provisions regulatory from commissions in get get kind on confidence what with -- you're brokers. details thoughts of captive language kind It alignment Encompass. with detail how in the the wanted seeing thus arrangements far the or on I seems that the gives and you just of of

this joining morning. you appreciate Really

consumer over independent an is agents general on type agent us, or policy as the to agents and our whereby they rule, on one to mind. of enrolling as be have they focused health as have lot inappropriate top a variable solely there we another As operates, been hourly concept in agnostic. selling and think health reimbursement. know, final our on agents, in here a or CMS based to and compensation or further, or peace that sure I influenced write compensate their interpretations generally that, broker brokers, even uniquely you just independent one incentives a is are for making for very that do wage you that they different variable new go may out And wage GoHealth there, receive compensation. plan not minimal a by very know, is about And of of underlying salary the but we And then get policy plan think

So variable opposed enrollment. as for service providing a a the about really, new tide us to is delivering

CMS what It's we're not are on. that, our based health spent to separate about of meeting really thing structure in they health that about for and minimum that, with conversed are the is the In we the market fair very that threshold. the concert we're fact the consistent feeling built to how and also of beyond where to of our we've And minimum from that. were the is a to a off or that agents reimbursed process. that we're differentially All the is It's we regs that, model is efforts incentivized go outside the the ensuring value will basis focus we then plans within interpreted with and distinct consumers well right rules good begin established our services right was time the on And the designing way that have lot the finalized, direct the their focused for and was proposed better targeting, as meaning doing to what thing. though, upon topic the trying plans by efforts. deliver standards for with about we say and Encompass current being way with where us realm partner the do what CMS the be is on

what and how cautiously play So forward. to to going out consumer-centric optimistic that's going engagement elements advance health But focusing in were to we us with before that to be built basis fair marketing that market forward a continue on or we value are in contracts model where they're we the way basis plan that influences the sell It's agents and on we all our are around the influence and our contracts. the contracts, there But are of ultimately do appropriateness our in don't as the on about to of as we not personal of the admin dollars relationships our for way on the described as and -- there think we some go a about for sell. how that. consumers again, tweak the adjust plans just think need waivers we

things about landed pretty model. to we're where can excited with our service we So about differential and we're how excited continue pretty deliver

the of could in the we seems end for United targeting to over positioning It if coverage, is margins to this not kind AEP move away high backing And like carriers the of range. year. from our

the all It We big could on replacing even setup CVS markets seems for shopping being have the also coming in just certain Humana your some could that wanted What plans get behavior positioning like in the quarter. an commentary focused that and and which all and fourth AEP? carriers, them. you're a volume all, in how XXXX, from thoughts Without to earnest on include LTV really from mean margin recovery a for pulling both perspective? in

are No. astute very all it's said, the question market that a Ben. there, dynamics out That given

at landscape. look we the As market

more see their consumers of The coming there every there's previously. what's are is should shop, this said And forget calls, year. true more need what unquote, deal a shopping, to or either destination to we've to exit that that are assessments of them as able plan to current better benefit quote personalized believe needing And better of to them shopping this AEP year We will for right? shopping in for have have it. a been of who consumers unique them. number we're is previous consumers period have motivate that for benefit best to going who an expect the it if upcoming always status And They're be every significant disruption plan, alternatives to always we haven't degradation set we benefit enrollment element -- shop. They've shop them shop you're available. believe that annual always we in and you to to give of because that there the who a the those shoppers their happened will quo values

shopping And pushing so for advocating shopping, about more when and in hoping you think been we have and general.

as mouth increase. we ensuring -- what's that the for for do only where shopping significantly are money we're proving we've More us, we've highlighted, on right our consumer. put going to really is expect our to We

been So the the even disruption benefits volume of determines and increasing, has shopping of the dynamics justified the though also switching.

believe very these GoHealth that be that a and the which more operating for And upon plans, justified of our positive reason you so based described for dynamics will health we switching, there different with model. a dynamic is

to marketing Officer, to able can capabilities has everybody with disruption. to Moffat, it's that how to as the having want areas in areas different very the able think many important those our do and also remarks, that with Chief my have added to geographies identify targeted Marketing pockets who are been pain despite we plans many be we of and to what those health with Not referred I knows plans be grow prepared the also fact I to our points, etc. unique that really unique Steve get targeted those populations, to note demographic down bring team still -- greatest advantage. And health

that messaging targeted anticipate there. can likely modeling So a actuarial the that will going necessary we're where mobilize strong using laser-focused and and support teams, we to in be our help predictive with our shopping switching disruption really way in,

piece -- with strong a can year-over-year be started efficiencies prepared to And is we see and and in quarter, some launch add the some preparedness of which approaching our So in on learned efficient deliver And delivered where the the so really that's of agents. first other actually generally we we're was our less the Express do you how to I'll had has learnings remarks was what with more planning. our our that better more experience. how the we're Encompass doing we

comes our NOBLE from McCann line question Markets. Capital next of from And Pat the

last Really piggyback quickly, will just on question my to be first question. the

AEP of, plan would -- recent to were When for period most expect this and -- you objectively, the out look switching switching next question period. that to plan Does upcoming past it switching, make that for would in and would expectation ahead Or years, AEP how plan switching. the more you AEP, a go about talked that was to big to wasn't come AEP? we've low you an a characterize increased You've you be back we and as if just there have say I sense? the significant several relative the guess it is

No, it's of it Pat, it's ask it and about to does, the kind think an question. and interesting -- a way very

you've So I way it. appreciate the asked

me you. for kind replay Let it of

more? think more we get line to you're likely we question a in was it this of replay? justified of is, versus past the expecting years? those higher how going think asking we to will relative that accurate QX benefit I Are was what QX when investment we that with Is there okay, to that an But lot AEP we switching. on see and there yester compared that in in be be do 'XX, switching. there Are basis of to be 'XX a year are expecting

perfect. That's Vijay. that for Thanks Yes.

health those their which sure, process. know -- we We until what are just here's until plans benefits do don't October. in the understand won't We we bids, first, know of details final in won't officially say, So final let still know how the me for right?

it's And this. be you let that so predict. about going changing to us it's tell think how really be going me to dynamic a really important to we for But

to in the You few the to that's motivated There's last what three first years years, benefits. share. happened you QX you've little seeing typical a couple could last scenarios, just plans that in a of somebody that. putting can I what's invested the have playing if offense years, And In on we year's grab clear have talk you years, those call. But and foremost, side each improve have benefits in highlight right? -- said we one this last -- winner to think bit. can typical about who of just really been and

really or spot can a high scenario first pulling benefits benefits. they're In lot You a the a environment. have degrading the those when investing degradation where benefits, plans back benefits into neutral and don't on can in switching health the major are have of you the time last invest and

historically weren't looked and who is little the offensive who consumers, justify market it total, be what talking just to switching became a putting new again. probably But generate is a about over not and similar every for additive the maybe what going in the think some because be are worse at it if when But would scenarios. that were would haven't shopping benefits I staying is going to same leading year, will selected new I are observe say shopping Now the now AEP. consumers the be plan, getting may we high beyond Medicare to net to just was bit or interesting average, -- shopping shopping last to on to reasons be the to years, or there more the that's the getting same going better, just that disruption switching likely right, few the last a population

we're going want to to So that's monitor. what

to switching have there's resource those to for to more that year, historical hoping you're focus haven't clear But have AEPs shopping scenario but real that the significant negative similar I be past. haven't to year we're later really year-over-year will and they serve in in the where that will populations were describing. we again, your just say population. shoppers question, trusted on we see And the who those the I on because what same prior time expect, that's is all details what would our dynamics. of population seen would likely So a looking the more can disruption spending been on, this we're

And enhancements drill for allowing experience shopping mentioned business as you the that how -- consumers as guess would what's far example, shop Could developments to you my you're that a online. to certain if And guys just down little then of more the we mind you you the into in making, the the to drive enhancement make will also, and and driving begin that that I years demand. forward one year-by-year, crosses literate, move is be technologically going things as more XX-plus progress. the more population as is

term. sort just long of color you're just there? But you the up give a bit maybe more setting could little So for

Sure, Pat.

access -- digital to that while them opportunity. isn't you're the provide real you those also benefit themselves them it's self-driven yourself good approach how the and And around the as an going to not for doing But a As to space, digital learning about right your to peace you and go harm the visibility, somebody needs. to of and thing do populations with experience of we to the the providing that doing wrap your confirm for is and the educating increasing mind direct think point, question over going away be time.

to the of to that educate Medicare give out personalization focusing to to empowering before, the part can tools finding a a in I to And as providing augment options the or we've of lot population, their provide referred opportunities. transparent good who time to so way them is been need to empowered consumers, them those what shop, simple, to shop bring right? want how this, are Medicare is themselves. or segmenting opportunity in pursuing get be could spent that And And efforts no a just our out that pressurized we're not that of where as they general flexibility a Enabling with ultimately, into consumer them eligibility way decision. listening transparency very the we've make

and so in continue that invest going increase And away. know we're be isn't of to those we've continuing to tools. there testing types likely over to will to been start will go going And to Digital digital it time.

so to really consumers it for to And to be we're what in want And trying that. excited space. who about be that we're could responsive those play

And could squeeze one more just if I in.

arrangements the timing You health conversations any two mentioned we as expect additional so about and an like? forth. might PlanFit things. about announcements then on you're might I what as that? and -- with information there could arrangement guess, having Is additional any the Is compensation when Safe plans updates give look far you there And

to about and engagement to valuable the health closed No. today. are extremely model, we It's something in and fact really the as health retention based that can do we're very continuous we that consumers. I that plan to important plans excited PlanFit here the with where The right Safe proven upon compensation partners have our And thing. markets these

quarter did have, period, We open XX,XXX. in enrollment this again,

and XXX,XXX XXX we've So -- over between about AEP PlanFit Safe's OEP, already. done just

every to we as the be conversation them tested we're enrollment go programs think operations good high-quality we've QX in we that and nearly as launching of to about QX have looking in and to be expecting major and So health into with these plan, here the some annual substantively period. had

So the to our say, in we're But excited model about that. into not ready arrangements. born those economics I'm already of today. cost is get the to needless

And so will incremental anything in way them. the think those and coming we additive about be from

Sidoti. Sidoti question the James come our of from line And will from next

much non-agency like year. having XX% there's about about XX% revenue, forward? XX%, of I'm any breakdown revenue that and this risk looks lower revenue revenue looking last Can from up of it's at from the going reversals a we assume

the to exposures. related And and away that also in stable to quality just as more others. have non-agency, left high from on you say is always about potential model, that look you think should business Yeah, back kind again, you would of under it where plans then wrote, little that book a agency bit it's versus agency that It's also for you the we've you've move I much nuanced. that written any would how

there So, you rates, about for the a that yes, of you well. write tenure churn in simple intrinsic a have things But question little short, or those when mixed answer more is market risk back non-agency, bit impact values. book etc., there's as less would

quarter generated I a the with think free in it's cash cash you more flow. positive third row And free in quarter,

You're options at existing do you regards paying straight you compare the Are Can refinancing. what talk about other debt is down And some talked you looking your to debt? refinancing? rates about are now? how what the to and at with debt

We focused question. very it. It's on a obviously were great

those dynamics. me first Let flow just cash talk about

very our true able consistent the investments on in are CFO of both our and cash regimented. make to been team. obvious focused we've invest in in efficiency, And is be so of unnecessary technology, our support to as Hargis, standardization we find opportunities really experience well still here, We process. the as day with that's COO; is driver thoughtful drive experience that model variation Jason It the very consumer in agent pool. to and that as our out really proud we're Schulz, I'm the the business. workflow less our that to overall and how day to dynamics Michael in our of

substantive interest rates for us we've to to pay rigor confidence deliver we been that refinancing opened around thoughts get debt better high to us have debt our we've As enabled It carrying and that those and that cash to as been flow, levels debt. show have operations. cost the consistently able door also to downs able around make our done to has for

invest there But tools and we're alternatives some in continue looking great to so, our ability technology there position in continue that help down the business. we had think cash at tools, no differentially dollar look expense for pay of as two at structure. spot more that that debt interest to our has we Encompass be and ways utilize that a now, to can we we state we the looking to hope on over our invest path about put have We and workflow our exploring in so continuously look to as without our over debt refinancing you growing to the the enhance really speak at us to all And in our decrease of refinancing, other us and doubt, progress the the place. our stability more the assets those at good to any even optimize position in refinancing months via our market are revolvers markets we right those we taking that enabled a current growth that coming we've could years have our and debt to finding really what under around

a different it disappointed after guess have me a than Would you I rate way. you didn't if you put be have refinancing, better let today?

possible, be by Yes, that be that -- your Ben, is very Jim, I succinct. very would in Pat, I not would highly so that.Well, thoughtful. I disappointed disappointed to is expect you be very questions, obviously unlikely, but really I'd Yes, but much. very be that. to appreciate thank that

This highlight is couple years approach We a we I unique to of call enrollment annual as want the things. are most going here, one of close this just period. seen we've to but the

of need and will for -- expanding this can our that QX remainder be of we who more services ways the all as shoppers we set QX the about population We think an ever. than experimenting different QX serve continuously

have and an number enrollment the as to a company of just opposed to company. to and continue that tools of engagement trust tactics build enhance We different being

in that we about AEP, who've us uncertainty, another did because PlanFit PlanFit think Safe versus AEP you hearing reconfirm of to got OEP the they're over there's come If noise. we OEP, had Safe consumers what in in for XX% because back to

We proposition to being who being absolutely and for able deliver deliver who of opportunistic and both to to the about the helping on that are our deliver to opportunity consumers rewards consumers opportunity service and value them. seek way high right stakeholders us value truly services it in doing are the excited giving our our

time to So, thank again attention and we forward speaking soon. you look all today, and for you your to very

program. today's for This conclude Thank in your participation you conference. the does