AUSTIN,
Texas, Dec. 17, 2024 /PRNewswire/ -- eHealth,
Inc. (Nasdaq: EHTH), a leading private online health insurance
marketplace, today provided commentary on its Annual Enrollment
Period (AEP) performance and updated guidance ranges for the fiscal
year ending December 31, 2024.
"This dynamic enrollment period was marked by significant
changes to Medicare Advantage and Part D plan offerings, creating
an increased demand for the trusted, carrier-agnostic solutions
that eHealth provides to help beneficiaries navigate their coverage
options. eHealth's outperformance during this critical time is a
testament to the success of our extensive transformation
initiatives and the organization's tremendous AEP preparedness
effort," said Fran Soistman, Chief
Executive Officer of eHealth.
Continued Fran Soistman, "During
the AEP, we drove strong consumer demand to our omnichannel
platform coupled with conversion rates that exceeded our
expectations, allowing us to deliver substantial enrollment growth
at enhanced margins. Most importantly, we continued to execute on
our mission, assisting hundreds of thousands of Medicare
beneficiaries in evaluating their health coverage and either
enrolling in a new plan or determining that their existing coverage
remains the best option for their needs. I am proud of the eHealth
team and believe we are in the early stages of capturing the
exciting opportunities for scale, margin expansion and brand
advancement in our Medicare business."
AEP Operational Highlights
- Strong year-over-year growth in submitted Medicare applications
including significant outperformance within direct marketing
channels.
- All-time high AEP submitted application volume in the online
unassisted category.
- Telephonic and online conversion rates above expectations and
representing meaningful year-over-year improvement.
- Expansion in LTV-to-CAC ratio(1) in the Medicare
business.
- Successful implementation of eHealth's new comprehensive member
retention program driving consumers to return to the eHealth
platform to review their coverage and shop for healthcare
plans.
Updated 2024 Guidance
Based on information available as of December 17, 2024, eHealth is revising its
guidance ranges for the full year ending December 31, 2024.
- Total revenue is expected to be in the range of $500.0 million to $520.0
million compared to the prior range of $470.0 million to $495.0
million.
- GAAP net income (loss) is expected to be in the range of
$(12.0) million to $3.0 million compared to the prior range of
$(36.5) million to $(22.0) million.
- Adjusted EBITDA(2) is expected to be in the range of
$40.0 million to $55.0 million compared to the prior range of
$7.5 million to $25.0 million.
The above guidance includes the expected impact of positive net
adjustment revenue in the range of $14.0
million to $20.0 million.
- Operating cash flow is expected to be in the range of
$(15.0) million to $(5.0) million compared to the prior range of
$(10.0) million to $0.0 million. The change in operating cash flow
outlook reflects eHealth's investment in profitable Medicare
enrollment growth during the fourth quarter.
Said John Dolan, Chief Financial
Officer of eHealth, "The mid-point of our updated guidance ranges
implies a substantial expansion of our margins – an important
accomplishment for the company. We also believe the AEP cohort
we enrolled this year will drive attractive cash ROI. Our revised
operating cash flow guidance reflects greater than
expected AEP enrollment volume and associated acquisition
spend. As a reminder, we recognize revenue upon plan approval, and
member acquisition costs are expensed and paid upfront, while we do
not receive initial commission payments for most new policies until
the first quarter. Our guidance is reflective of this timing
dynamic within our Medicare agency fulfillment model."
These expectations are forward-looking statements,
and eHealth assumes no obligation to update these statements.
Actual results may be materially different and are affected by the
risks and uncertainties identified in this press release and in
eHealth's annual and quarterly reports filed with the Securities
and Exchange Commission.
About eHealth, Inc.
We're Matchmakers. For over 25 years, eHealth has helped
millions of Americans find the healthcare coverage that fits their
needs at a price they can afford. As a leading independent licensed
insurance agency and advisor, eHealth offers access to over 180
health insurers, including national and regional companies.
For more information, visit eHealth.com or follow us
on LinkedIn, Facebook, Instagram,
and X. Open positions can be found on our career
page.
Forward-Looking Statements
This press release
contains statements that are forward-looking statements as defined
within the Private Securities Litigation Reform Act of 1995. These
include: statements regarding factors that impacted our Annual
Enrollment Period (AEP) performance; our expected operating and
financial performance for the 2024 fiscal year; our 2024 annual
guidance for total revenue, GAAP net income (loss), Adjusted EBITDA
and operating cash flow; our estimates for positive net adjustment
revenue and its expected impacts on our 2024 annual guidance; our
expectation for the AEP enrollment cohort and its expected impact
on our financial condition; our estimates regarding Medicare
Advantage approved members and Medicare approved members for the
fourth quarter of 2024; our expectation for improvement in our
LTV-to-CAC ratio; our expectation for improvement in margin for the
fourth quarter of 2024; our expectation regarding timing of receipt
of commission and payment practices of health insurance carriers;
our expectations regarding AEP enrollment volume and associated
acquisition spend; our expectations regarding our financial and
operating condition and performance; our expectations regarding our
business, operations, initiatives and strategies; and other
statements regarding our future operations, financial condition,
prospects and business strategies.
These forward-looking statements are inherently subject to
various risks and uncertainties that could cause actual results to
differ materially from the statements made. In particular, we are
required by Accounting Standards Codification 606 — Revenue from
Contracts with Customers to make numerous assumptions that are
based on historical trends and our management's judgment. These
assumptions may change over time and have a material impact on our
revenue recognition, guidance and results of operations. Please
review the assumptions stated in this press release carefully.
The risks and uncertainties that could cause our results to
differ materially from those expressed or implied by such
forward-looking statements include, but are not limited to, our
ability to retain existing members and enroll new members during
the annual healthcare open enrollment period, the Medicare annual
enrollment period, the Medicare Advantage annual open enrollment
period and other special enrollment periods; changes in laws,
regulations and guidelines, including in connection with healthcare
reform or with respect to the marketing and sale of Medicare plans,
such as the Policy and Technical Changes to Medicare Advantage for
Contract Year 2025 released by CMS on April
4, 2024 and subsequent rules released by CMS relating
thereto; competition, including competition from government-run
health insurance exchanges and other sources; the seasonality of
our business and the fluctuation of our operating results; our
ability to accurately estimate membership, lifetime value of
commissions and commissions receivable; changes in product
offerings among carriers on our ecommerce platform and changes in
our estimated conversion rate of an approved member to a paying
member and the resulting impact of each on our commission revenue;
the concentration of our revenue with a small number of health
insurance carriers; our ability to execute on our growth strategy
and other business initiatives; changes in our management or other
key employees; our ability to hire, train, retain and ensure the
productivity of licensed insurance agents, or benefit advisors, and
other personnel; exposure to security risks and our ability to
safeguard the security and privacy of confidential data; our
relationships with health insurance carriers; the success of our
carrier advertising and sponsorship program; our success in
marketing and selling health insurance plans and our unit cost of
acquisition; our ability to effectively manage our operations as
our business evolves and execute on our business plan and other
strategic initiatives; the need for health insurance carrier and
regulatory approvals in connection with the marketing of
Medicare-related insurance products; changes in the market for
private health insurance; consumer satisfaction of our service and
actions we take to improve the quality of enrollments; changes in
member conversion rates; changes in commission rates; our ability
to sell qualified health insurance plans to subsidy-eligible
individuals and to enroll subsidy-eligible individuals through
government-run health insurance exchanges; our ability to derive
desired benefits from investments in our business, including
membership growth and retention initiatives; our reliance on
marketing partners; the success and cost of our marketing efforts,
including branding, online advertising, direct-to-consumer mail,
email, social media, telephone, television, radio and other
marketing efforts; timing of receipt and accuracy of commission
reports; payment practices of health insurance carriers; dependence
on our operations in China; the
restrictions in our debt obligations; the restrictions in our
investment agreement with our convertible preferred stock investor;
our ability to raise additional capital or to restructure our
existing debt obligations; compliance with insurance, privacy,
cybersecurity and other laws and regulations; the outcome of
litigation in which we may from time to time be involved; the
performance, reliability and availability of our information
technology systems, ecommerce platform and underlying network
infrastructure; including any new systems we may implement; public
health crises, pandemics, natural disasters, changing climate
conditions and other extreme events; general economic conditions,
including inflation, recession, financial, banking and credit
market disruptions; and our ability to affectively administer our
self-insurance program. Other factors that could cause operating,
financial and other results to differ are described in our most
recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K
filed with the Securities and Exchange Commission and available on
the Investor Relations page of our website at
https://ir.ehealthinsurance.com and on the Securities and Exchange
Commission's website at www.sec.gov.
All forward-looking statements in this press release are based
on information available to us as of the date hereof, and we do not
assume any obligation to update the forward-looking statements
provided to reflect events that occur or circumstances that exist
after the date on which they were made, except as required by
law.
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Footnotes to Certain
Operational and Non-GAAP Financial
Information
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(1)
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LTV-to-CAC ratio is
calculated as constrained lifetime value of commissions per
Medicare Advantage ("MA")-equivalent approved member for which we
are the broker of record divided by total acquisition cost
(including customer care and enrollment and variable marketing
costs) per MA-equivalent approved member. The number of
MA-equivalent approved members is calculated by adding the total
number of approved Medicare Advantage and Medicare Supplement
members and 25% of the total number of approved Medicare Part D
members during the period presented.
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(2)
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This press release
includes Adjusted EBITDA, a financial measure that is not
calculated in accordance with U.S. generally accepted accounting
principles (GAAP). Adjusted EBITDA is calculated by excluding
dividends for preferred stock and change in preferred stock
redemption value (together the "impact from preferred stock"),
provision for (benefit from) income taxes, depreciation and
amortization, stock-based compensation expense, impairment,
restructuring and other charges, interest expense, other income
(expense), net, and other non-recurring charges from GAAP net
income (loss) attributable to common stockholders. Other
non-recurring charges to GAAP net income (loss) attributable to
common stockholders may include transaction expenses in connection
with capital raising transactions (whether debt, equity or
equity-linked) and acquisitions, whether or not consummated,
purchase price adjustments and the cumulative effect of a change in
accounting principles.
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eHealth believes that
the presentation of Adjusted EBITDA provides important supplemental
information to management and investors regarding financial and
business trends relating to eHealth's financial condition and
results of operations. Management believes that the use of Adjusted
EBITDA provides consistency and comparability with eHealth's past
financial reports. Management also believes that Adjusted EBITDA
provides an additional measure of eHealth's operating results and
facilitates comparisons of eHealth's core operating performance
against prior periods and business model objectives. This
information is provided to investors in order to facilitate
additional analyses of past, present and future operating
performance and as a supplemental means to evaluate eHealth's
ongoing operations. eHealth believes that Adjusted EBITDA is useful
to investors in their assessment of eHealth's operating
performance.
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Adjusted EBITDA is not
calculated in accordance with GAAP, and should be considered
supplemental to, and not as a substitute for, or superior to,
financial measures calculated in accordance with GAAP. Adjusted
EBITDA has limitations in that it does not reflect all of the
revenue and costs associated with the operations of eHealth's
business and does not reflect income tax as determined in
accordance with GAAP. As a result, you should not consider this
measure in isolation or as a substitute for analysis of eHealth's
results as reported under GAAP. eHealth expects to continue to
incur the stock-based compensation costs, depreciation and
amortization and interest expense as described above, and exclusion
of these costs, and their related income tax benefits, from
Adjusted EBITDA should not be construed as an inference that these
costs are unusual or infrequent. eHealth compensates for these
limitations by prominently disclosing GAAP net income (loss) and
providing investors with a reconciliation from eHealth's GAAP net
income (loss) to Adjusted EBITDA for the relevant
periods.
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The accompanying table provides more details on guidance GAAP
net income (loss) attributable to common stockholders, which is the
most directly comparable GAAP financial measure to Adjusted EBITDA,
a non-GAAP financial measure, and the related reconciliation
between these financial measures.
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Non-GAAP Financial
Information Reconciliation – Fiscal Year 2024 Guidance (in
millions, unaudited)
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Year
Ended
December 31, 2024
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Low
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High
|
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GAAP net loss
attributable to common stockholders
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$
(57)
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$
(42)
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Impact from preferred
stock
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45
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45
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GAAP net income
(loss)
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$
(12)
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$
3
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Stock-based
compensation expense
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20
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17
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Depreciation and
amortization
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19
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18
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Impairment,
restructuring and other charges
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9
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9
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Interest
expense
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11
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10
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Other income,
net
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(8)
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(9)
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Provision for income
taxes
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1
|
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7
|
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Adjusted
EBITDA
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$
40
|
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$
55
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Investor Relations Contact:
Kate Sidorovich, CFA
Senior Vice President, Investor Relations & Strategy
investors@ehealth.com
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SOURCE eHealth, Inc.
