eHealth(US:EHTH)2024-11-06 12:37Medicare Submissions and Membership - Q3 2024 Medicare submissions grew 22% year-over-year, with Medicare Advantage submissions increasing by 26%[3] - Total Medicare approved members increased by 6% year-over-year, driven by a 14% increase in Medicare Advantage approved members[3] - Total approved members as of September 30, 2024, were 58,266, a slight decrease from 58,467 in 2023, with Medicare members increasing by 6% to 42,871[27] - Medicare Advantage approved members increased to 143,529, a 9% growth from 131,117 in 2023[30] - Total Medicare members decreased by 2% to 1,159,422 in 2024 from 1,184,015 in 2023[31] - Estimated total Medicare membership for 2024 is 873,426, reflecting a 1% increase from 868,333 in 2023[31] Financial Performance - Q3 2024 total revenue was $58.4 million, a decrease of 10% from $64.7 million in Q3 2023, primarily due to lower positive net adjustment revenue[3] - Positive net adjustment revenue for Q3 2024 was $1.2 million, down from $12.2 million in Q3 2023[3] - Non-GAAP total revenue excluding net adjustment revenue increased by 9% year-over-year[3] - Q3 2024 GAAP net loss was $42.5 million, an increase of 15% compared to a net loss of $37.0 million in Q3 2023[3] - Adjusted EBITDA for Q3 2024 was $(34.8) million, compared to $(28.1) million in Q3 2023; adjusted EBITDA excluding net adjustment revenue improved by $4.3 million year-over-year[3] - Full year 2024 total revenue guidance is expected to be between $470.0 million and $495.0 million[5] - GAAP net loss for the full year 2024 is expected to be in the range of $(36.5) million to $(22.0) million[5] - Non-GAAP total revenue excluding net adjustment revenue for Q3 2024 was $57,211, a 9% increase from $52,505 in Q3 2023[37] - GAAP total revenue for Q3 2024 was $58,409, down 10% from $64,718 in Q3 2023[37] - Non-GAAP Medicare segment revenue for Q3 2024 was $52,131, a 13% increase from $46,232 in Q3 2023[38] - GAAP net loss for Q3 2024 was $42,473, compared to a net loss of $37,025 in Q3 2023, representing a 15% increase in losses[36] - Adjusted EBITDA for Q3 2024 was $(36,030), an improvement of 11% from $(40,310) in Q3 2023[36] Revenue Breakdown - Commission revenue decreased by 16% to $48,222 in Q3 2024 from $57,239 in Q3 2023, while other revenue increased by 36% to $10,187[16] - Medicare segment revenue for Q3 2024 was $53,221, a decrease of 4% from $55,523 in Q3 2023, while year-to-date revenue increased by 13% to $194,857 from $172,787[23] - Employer and Individual segment revenue dropped 44% to $5,188 in Q3 2024 from $9,195 in Q3 2023, with a year-to-date decline of 31% to $22,372 from $32,422[23] - The total commission revenue for Q3 2024 was $48,222, a 16% decrease from $57,239 in Q3 2023, while year-to-date commission revenue remained stable at $185,996 compared to $185,428[25] Operating Costs and Expenses - Total operating costs and expenses decreased by 2% to $101,608 in Q3 2024 from $104,114 in Q3 2023[16] - Marketing and advertising expenses increased by 2% to $29,665 in Q3 2024, while general and administrative expenses decreased by 12% to $20,297[16] - Non-GAAP operating costs and expenses for the nine months ended September 30, 2024, were $281,764, compared to $275,910 in 2023[33] - The company expects to incur stock-based compensation expenses of approximately $20.0 million for the full year 2024[41] Cash and Liquidity - Cash, cash equivalents, and marketable securities totaled $117.8 million as of September 30, 2024[3] - Cash, cash equivalents, and restricted cash at the end of the period were $67,122, down from $155,208 at the end of Q3 2023[18] - Net cash used in operating activities was $(29,283) for Q3 2024, compared to $(24,681) in Q3 2023[18] Segment Losses - The Medicare segment reported a segment loss of $17,933 in Q3 2024, compared to a loss of $15,331 in Q3 2023, reflecting a 17% increase in losses[23] - E&I segment profit (loss) for the three months ended September 30, 2024, was $(799) thousand, a decline of $(5,609) thousand or 117% from a profit of $4,810 thousand in 2023[40] - Medicare segment loss excluding net adjustment revenue improved to $(19,023) thousand, a decrease of $5,599 thousand or 23% from $(24,622) thousand in 2023[40] Methodology Changes - Starting Q1 2024, the company modified its expense allocation methodology, no longer allocating facilities-related expenses, which are now reported under "General and administrative"[61] - The reclassification of expenses from marketing, customer care, and technology to general and administrative had no impact on total operating costs, loss from operations, or net loss per share[61] Importance of Non-GAAP Measures - The company emphasizes the importance of non-GAAP financial measures for assessing its operating performance and trends[52] - The company estimates membership for Medicare-related, individual and family, and ancillary health insurance plans based on commission payments received, adjusting for historical cancellation rates[59] - For small business health insurance plans, membership numbers are updated based on notifications from groups or carriers, but cancellations are often communicated directly to carriers without informing the company[60]