eHealth(EHTH) - 2023 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents eHealth's unaudited condensed consolidated financial statements and management's discussion and analysis for Q1 2023 ITEM 1. FINANCIAL STATEMENTS (Unaudited) This section presents eHealth's unaudited condensed consolidated financial statements for Q1 2023 and 2022, covering balance sheets, comprehensive loss, equity, cash flows, and detailed notes Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets show a slight decrease in total assets and stockholders' equity from December 31, 2022, to March 31, 2023, while cash and cash equivalents increased | Metric | March 31, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $180,633 | $144,401 | | Total current assets | $420,664 | $401,084 | | Total assets | $1,083,034 | $1,112,611 | | Total current liabilities | $51,467 | $60,565 | | Total liabilities | $183,672 | $198,372 | | Convertible preferred stock | $271,454 | $263,284 | | Total stockholders' equity | $627,908 | $650,955 | Condensed Consolidated Statements of Comprehensive Loss eHealth reported a significant reduction in total revenue and net loss for Q1 2023 compared to Q1 2022, driven by decreases in commission and other revenue, alongside substantial reductions in operating costs and expenses | Metric | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | Change (YoY) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :----------- | | Total revenue | $73,723 | $105,250 | (30)% | | Total operating costs and expenses | $96,617 | $144,964 | (33)% | | Loss from operations | $(22,894) | $(39,714) | 42% | | Net loss | $(19,878) | $(32,742) | 39% | | Net loss attributable to common stockholders | $(28,048) | $(39,960) | 30% | | Basic and diluted EPS | $(1.01) | $(1.46) | 31% | - Commission revenue decreased by 28% to $68,003 thousand in Q1 2023 from $93,850 thousand in Q1 2022, while other revenue decreased by 50% to $5,720 thousand in Q1 2023[20] - Marketing and advertising expenses decreased by 44% to $32,899 thousand in Q1 2023, and customer care and enrollment expenses decreased by 36% to $26,957 thousand in Q1 2023[20] Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity decreased from $650,955 thousand at December 31, 2022, to $627,908 thousand at March 31, 2023, primarily due to net loss and preferred stock dividends | Metric | December 31, 2022 (in thousands) | March 31, 2023 (in thousands) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Stockholders' Equity | $650,955 | $627,908 | | Retained Earnings | $73,799 | $45,751 | | Additional Paid-in Capital | $777,187 | $782,065 | - Net loss for Q1 2023 was $(19,878) thousand, contributing to the decrease in retained earnings[22] - Stock-based compensation added $5,306 thousand to additional paid-in capital during Q1 2023[22] Condensed Consolidated Statements of Cash Flows eHealth generated $60.8 million in net cash from operating activities in Q1 2023, an increase from $47.1 million in Q1 2022, primarily due to a significant decrease in commissions receivable | Cash Flow Activity | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net cash provided by operating activities | $60,803 | $47,112 | | Net cash provided by (used in) investing activities | $(24,240) | $26,121 | | Net cash provided by (used in) financing activities | $(439) | $65,373 | | Net increase in cash, cash equivalents and restricted cash | $36,232 | $138,637 | - The increase in operating cash flow in Q1 2023 was largely driven by an $82.5 million decrease in contract assets – commissions receivable[27] - Investing activities in Q1 2023 included $22.0 million in purchases of marketable securities and $2.2 million in capitalized internal-use software[27] Notes to Condensed Consolidated Financial Statements The notes provide detailed disclosures on eHealth's business, accounting policies, revenue disaggregation, supplemental financial information, fair value measurements, equity, debt, and income taxes Note 1 – Summary of Business and Significant Accounting Policies eHealth operates as a leading private online health insurance marketplace, offering a technology and service platform for consumer engagement, education, and enrollment in various health insurance products - eHealth operates as a leading private online health insurance marketplace, offering a technology and service platform for consumer engagement, education, and enrollment in various health insurance products from approximately 200 carriers across all 50 states and D.C[30] - The company's platform supports an omnichannel approach, allowing consumers to use services online, by telephone with licensed agents, or through hybrid online assisted interactions[30] - The condensed consolidated financial statements are unaudited and prepared in accordance with U.S. GAAP for interim financial information, reflecting normal recurring adjustments[33] Note 2 – Revenue This note details eHealth's revenue disaggregation by product category, highlighting a significant decrease in Medicare and sponsorship revenue, partially offset by growth in Individual and Family and Small Business segments | Revenue Category | Three Months Ended March 31, 2023 (in thousands) | Three Months Ended March 31, 2022 (in thousands) | Change (YoY) | | :----------------------- | :--------------------------------------------- | :--------------------------------------------- | :----------- | | Medicare | $58,963 | $85,710 | (31.2)% | | Individual and Family | $4,006 | $3,126 | 28.2% | | Ancillary | $2,422 | $2,831 | (14.4)% | | Small Business | $4,873 | $3,483 | 39.9% | | Commission Bonus and Other | $(2,261) | $(1,300) | (73.9)% | | Total Commission Revenue | $68,003 | $93,850 | (27.5)% | | Sponsorship and Advertising Revenue | $4,943 | $10,645 | (53.6)% | | Total Other Revenue | $5,720 | $11,400 | (49.9)% | | Total Revenue | $73,723 | $105,250 | (30.0)% | - Medicare commission revenue from members approved during the period decreased from $84,283 thousand in Q1 2022 to $56,617 thousand in Q1 2023[42] - Individual, Family and Small Business segment commission revenue increased from $9,516 thousand in Q1 2022 to $11,334 thousand in Q1 2023[42] [Note 3 – Supplemental Financial Statement Information](index=14&type=section&id=Note%203%20%E2%80%