eHealth (NasdaqGS:EHTH) Q4 2025 Earnings call February 25, 2026 05:00 PM ET Company ParticipantsDerrick Duke - CEOJohn Dolan - CFOConference Call ParticipantsGeorge Sutton - Senior Research AnalystJonathan Yong - Equity Research AnalystMax Young - Equity Research AnalystMichael Murray - Equity Research AnalystOperatorGood afternoon, everyone, welcome to eHealth, Inc. conference call to discuss the company's Q4 and fiscal year 2025 financial results. At this time, all participants have been placed in listen- ...

eHealth (NasdaqGS:EHTH) Q4 2025 Earnings call February 25, 2026 05:00 PM ET Speaker6Good afternoon, everyone, welcome to eHealth, Inc. conference call to discuss the company's fourth quarter and fiscal year 2025 financial results. At this time, all participants have been placed in listen-only mode. The floor will be open.Good afternoon, and thank you all for joining us. On the call today, Derrick Duke, eHealth's Chief Executive Officer, and John Dolan, Chief Financial Officer, will discuss our fourth quarte ...

Financial Data and Key Metrics Changes - In Q4, net income was $266 million or $3.29 per share, compared to $255 million or $3.01 per share a year ago, representing a year-over-year increase [4] - Net operating income for the quarter was $274 million, or $3.39 per share, an increase of 8% over the $3.14 per share from a year ago [4] - For the full year 2025, net operating income was $14.52, 2 cents above the midpoint of previous guidance [4] - Return on equity through December 31 was 20.9%, and book value per share was $74.17 [4][5] - Excluding accumulated other comprehensive income, return on equity is 16%, and book value per share as of December 31 is $96.16, up 11% from a year ago [5] Business Line Data and Key Metrics Changes - Total premium revenue in Q4 grew 5% over the year-ago quarter [7] - Life premium revenue for Q4 increased 3% from the year-ago quarter to $850 million [7] - Life underwriting margin was $350 million, up 4% from a year ago [8] - Health premium revenue grew 9% to $392 million, with health underwriting margin also up 9% to $99 million [8] - Administrative expenses were $92 million for the quarter, an increase of approximately 1% over the fourth quarter of 2024 [9] Market Data and Key Metrics Changes - In 2026, life premium revenue is expected to grow between 4% and 4.5%, while health premium revenue is expected to grow in the range of 14%-16% [8][18] - The average producing agent count trends for 2026 are projected as follows: American Income, mid-single-digit growth; Liberty National, high single-digit growth; Family Heritage, low double-digit growth [18] Company Strategy and Development Direction - The company focuses on providing financial security in the underserved lower-middle to middle-income market, which has significant growth opportunities [5][6] - The business model is designed to distribute basic protection products that are simple for agents and consumers to understand [5] - The company aims to maintain capital within its insurance operations at levels necessary to support current ratings, targeting a consolidated company action level RBC ratio in the range of 300%-320% [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and its ability to continue growing, citing favorable mortality trends and premium growth [6][39] - For 2026, the company estimates net operating earnings per diluted share will be in the range of $14.95-$15.65, representing 5% earnings per share growth at the midpoint of the range [39] - The company anticipates total premium revenue growth of 7%-8% for 2026, with specific growth expectations for life and health premiums [40] Other Important Information - The company repurchased approximately 1.3 million shares for a total cost of approximately $170 million in Q4 [30] - The parent company began the year with liquid assets of approximately $90 million and ended the year with approximately $80 million [30] - The company finalized the licensing and formation of Globe Life Re Ltd, a Bermuda reinsurance affiliate, to reinsure a portion of new business and in-force life insurance policies [35] Q&A Session Summary Question: First-year lapses across various channels - Management acknowledged that first-year lapses for direct-to-consumer and Liberty National were higher than expected, attributing it to fluctuations and monitoring the situation closely [46] Question: Dynamics between MedSup and Med Advantage - Management noted that claim trends have stabilized and rate increases are expected to bring margins back to normal levels [49][50] Question: Sales growth and efficiencies - Management indicated that technology investments will continue to drive efficiencies and sales growth, with more enhancements expected in the coming years [58][60] Question: Remeasurement gains - Management explained that favorable mortality and lapse experience are driving remeasurement gains, with expectations for continued gains in the future [63] Question: Excess cash flow and GAAP vs statutory differences - Management clarified that excess cash flow guidance remains consistent, driven by solid statutory earnings and dividends to the parent company [68][71] Question: American Income agent count drop - Management stated that a drop in agent count is not uncommon in Q4 and discussed initiatives to improve agent retention [73]

Financial Data and Key Metrics Changes - In Q4, net income was $266 million or $3.29 per share, compared to $255 million or $3.01 per share a year ago, representing a significant increase [3] - Net operating income for the quarter was $274 million, or $3.39 per share, an increase of 8% over the $3.14 per share from a year ago [3] - For the full year 2025, net operating income was $14.52, 2 cents above the midpoint of previous guidance [3] - Return on equity through December 31 is 20.9%, and book value per share is $74.17 [3] - Excluding accumulated other comprehensive income, return on equity is 16%, and book value per share as of December 31 is $96.16, up 11% from a year ago [4] Business Line Data and Key Metrics Changes - Total premium revenue in Q4 grew 5% over the year-ago quarter, with life premium revenue increasing 3% to $850 million [5][6] - Life underwriting margin was $350 million, up 4% from a year ago, driven by premium growth and lower overall policy obligations [6] - Health insurance premium revenue grew 9% to $392 million, with health underwriting margin also up 9% to $99 million [6] - For 2026, life premium revenue is expected to grow between 4% and 4.5%, while health premium revenue is projected to grow in the range of 14%-16% [6][37] Market Data and Key Metrics Changes - The company serves the underserved lower-middle to middle-income market, with over 50% of Americans being underinsured, indicating a significant growth opportunity [4] - The Medicare Supplement business is experiencing strong sales activity and premium rate increases, contributing to the growth in health premium revenue [6][15] Company Strategy and Development Direction - The company focuses on providing financial security in the underserved market, distributing basic protection products designed to meet the needs of this demographic [4] - The company aims to leverage technology investments to enhance agent productivity and sales growth [56] - The strategy includes maintaining pricing for profitability rather than chasing market share, ensuring long-term stability [82] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model and its ability to continue growing, citing favorable mortality trends and premium growth [5][36] - The company anticipates continued strong performance in the Medicare Supplement market due to dynamics in the Medicare Advantage space [48] - For 2026, the company expects net operating earnings per diluted share to be in the range of $14.95-$15.65, representing 5% growth at the midpoint [36] Other Important Information - The company repurchased approximately 1.3 million shares for a total cost of approximately $170 million in Q4 [28] - The parent company anticipates excess cash flow to increase to approximately $625 million-$675 million in 2026 [29] Q&A Session Summary Question: First-year lapses across various channels - Management acknowledged that first-year lapses were higher than expected, particularly in direct-to-consumer and Liberty National, but viewed it as fluctuations to monitor [41][42] Question: Dynamics between Medicare Supplement and Medicare Advantage - Management noted that claim trends have stabilized and rate increases are expected to restore margins to normal levels [43][44] Question: Sales growth and efficiency improvements - Management indicated that technology investments will continue to drive efficiency and sales growth, with more enhancements expected in 2026 and 2027 [54][56] Question: Remeasurement gains and their drivers - Management explained that favorable mortality and lapse experience are driving remeasurement gains, with expectations for continued gains in the future [59][60] Question: Excess cash flow guidance - Management clarified that excess cash flow guidance remains consistent due to solid statutory earnings, with no significant changes impacting the statutory or GAAP models [65][66] Question: American Income agent count drop - Management stated that a drop in agent count is not uncommon in Q4 and highlighted initiatives to improve agent retention [71][72]

Financial Performance - Q3 2025 total revenue was $53.9 million, a decrease of 8% year-over-year (YoY)[7] - Q3 2025 GAAP net loss improved to $31.7 million, compared to a $42.5 million loss a year ago[7] - Q3 2025 adjusted EBITDA was $(34.0) million, compared to $(34.8) million a year ago[7] - Q3 2025 operating cash flow was $(25.3) million, compared to $(29.3) million a year ago[7] - As of September 30, 2025, cash, cash equivalents, and marketable securities totaled $75.3 million, and commissions receivable balance was $907.7 million[7] Medicare Segment - Medicare segment revenue declined 6% YoY to $49.9 million, primarily due to lower enrollments[14, 16] - Medicare submissions decreased by 36% YoY, from 55,518 to 40,921[16] - Total acquisition cost per MA-equivalent approved member increased 19% YoY, from $1,256 to $1,489[15, 16] - Medicare segment gross loss improved from $(5.6) million to $(1.2) million[16] Guidance - The company updated its FY 2025 adjusted EBITDA guidance range to $60 million - $80 million and GAAP Net Income to $9 million - $30 million[21] - The updated guidance includes an estimate for positive net adjustment revenue in the range of $40 million to $43 million, compared to the prior range of $29 million to $32 million[20]

Financial Data and Key Metrics Changes - In Q3, net income was $388 million, or $4.73 per share, compared to $303 million, or $3.44 per share a year ago, representing a significant increase [4] - Net operating income for the quarter was $394 million, or $4.81 per share, an increase of 38% over the $3.49 per share from a year ago [4] - Return on equity through September 30 is 21.9%, and book value per share is $69.52, with a 12% increase in book value per share from a year ago [4] Business Line Data and Key Metrics Changes - Total premium revenue in Q3 grew 5% over the year-ago quarter [6] - Life premium revenue for Q3 increased 3% from the year-ago quarter to $844 million, with life underwriting margin up 24% to $482 million [7] - Health insurance premium revenue grew 9% in the quarter to $387 million, with health underwriting margin up 25% to $108 million [7][8] - Administrative expenses were $90 million for the quarter, an increase of 1% over the third quarter of 2024, maintaining 7.3% of premium [8] Market Data and Key Metrics Changes - The company serves the lower middle to middle-income market, which is vastly underserved and has significant growth potential [5] - The average producing agent count for the third quarter was 12,230, up 2% from a year ago, indicating growth in the agency force [10] Company Strategy and Development Direction - The company aims to surpass 28,000 exclusive agents and $1.4 billion in annual sales by 2030 [10] - New initiatives include a worksite enrollment platform and a recruiting CRM to enhance agent productivity and training [11][50] - The company anticipates total premium revenue growth of approximately 5% for the full year 2025, consistent with its 10-year average growth rate [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of the agent force and sales, citing a strong recruiting pipeline and improved agent productivity [42] - The company expects net operating earnings per diluted share for 2025 to be in the range of $14.40-$14.60, representing 17% growth at the midpoint [36] - Management noted that while there is uncertainty in the U.S. economy, the company is well-positioned to withstand economic downturns due to its conservative investment portfolio [23] Other Important Information - The company repurchased approximately 840,000 shares for a total cost of approximately $113 million in Q3 [26] - The company anticipates share repurchases will total $685 million in 2025 [27] - The overall impact of life and health assumption changes reduced policy obligations by $134 million, indicating an improved outlook for future policy obligations [33] Q&A Session Summary Question: What is driving muted sales growth in recent quarters? - Management indicated that the challenge is related to agent productivity and onboarding new agents, not consumer demand [40][41] Question: Does the $600 million-$700 million cash flow guidance include benefits from the Bermuda entity? - The guidance does not include any benefits from the Bermuda affiliate, which is expected to take at least two accounting periods for reciprocal jurisdiction [44][45] Question: Can you elaborate on the new worksite enrollment platform and recruiting CRM? - The new platform enhances agents' ability to customize coverage for clients, while the CRM system provides real-time data for managing the recruiting pipeline [47][50] Question: What are the expectations for claims trends and sales in the health business? - Management expects favorable trends in Medicare Supplement and group retiree health, with anticipated rate increases to improve margins [65][66] Question: What is the outlook for health sales given the aging baby boomer generation? - Management believes there will be continued demand for Medicare Supplement products, supported by demographic trends [74][78] Question: What is the status of the EEOC investigation? - The EEOC findings are not binding, and there is no pending litigation, with the company prepared to defend its classification of sales agents [80][81]

eHealth Conference Call Summary Company Overview - **Company**: eHealth (NasdaqGS:EHTH) - **Industry**: Health Insurance Marketplace - **CEO Background**: New CEO with extensive experience in life and health space, previously at Magellan Health and HealthMarkets [2][3] Key Points Company Mission and Differentiation - eHealth is a leading direct-to-consumer health insurance marketplace focused on guiding consumers through health plan selection [3] - Differentiation is based on: - Omni-channel capabilities combining online enrollment with licensed advisor support [4] - Brand-driven demand generation, moving away from third-party lead generation [4] - Strong commission receivable asset with a history of positive adjustments [4] Market Dynamics - Over 10,000 individuals age into Medicare daily, with a growing preference for Medicare Advantage plans [5] - Significant opportunity in the under 65 market through Individual Coverage Health Reimbursement Arrangements (ICRA), projected to grow at a 60% CAGR [6] - eHealth has relationships with approximately 180 carriers, enhancing its competitive position [7] Brand Strategy - Launched branded marketing in 2023, resulting in 80% of Medicare applications coming through eHealth branded channels in Q4 2024 [8] - Brand recognition is expected to drive higher retention and profitability [9] Financial Performance - Achieved $111 million in cumulative EBITDA improvement and $99 million in operating GAAP net income over three years [11] - 2024 guidance anticipates approximately 3% revenue growth and flat profitability year-over-year [11] - Long-term targets include 8-10% revenue CAGR and 8-10% EBITDA margin by 2026, with current margins at approximately 14% [12] Competitive Landscape - eHealth is positioned to capture market share as competitors exit the market due to recent disruptions [15] - Regulatory headwinds are easing, with favorable Medicare Advantage rates expected for 2026 [15] Cash Flow and Liquidity - Positive cash flow generation anticipated due to increased CMS rates and brand strategy [19][20] - Ample liquidity with over $100 million in cash and minimal debt, with a term loan extended to Q1 2027 [34][35] Growth Drivers - Continued scaling of Medicare Advantage business and diversification into ancillary products [21] - Focus on reducing seasonality through year-round products and flexible telesales structures [31] Technology and Consumer Experience - Investment in technology, including AI-powered voice agents, enhances customer experience and reduces costs [10] - High adoption of online unassisted enrollments, with enrollment margins improving from 31% to 50% year-over-year [26] Future Outlook - Anticipation of another dynamic open enrollment period with potential for significant market share gains [16] - Ongoing efforts to enhance capital structure and monetize receivables without diluting common shareholders [35] Additional Insights - eHealth's omni-channel approach allows for scalability and improved customer experience, setting it apart from competitors constrained by agent headcount [25] - The company is focused on building trusted relationships with consumers to unlock further opportunities in healthcare services and products [22][33]

Company Overview - CNO Financial Group focuses on securing the future of middle-income America by providing insurance and financial services [3, 4]. - The company has a market capitalization of $3.8 billion and total assets of $37 billion [8]. - In 2024, CNO Financial Group paid $2.1 billion in claims [8]. - The company distributes products through direct, career, and independent channels [24]. Financial Performance & Growth - In 2024, New Annualized Premium (NAP) generated was $353 million, excluding annuities and third-party products [30]. - Colonial Penn NAP grew from $72 million in 2018 to $116 million in 2024, representing a CAGR of 8.3% [32]. - Colonial Penn NAP from partners increased from $12 million in 2021 to $45 million in 2024, a CAGR of 55% [35]. - Annuity collected premiums grew from $1.4 billion in 2021 to $1.8 billion in 2024, with a CAGR of 8.7% [56]. - Client assets in securities increased from $2.9 billion in 2021 to $4.1 billion in 2024, a CAGR of 12.2% [57]. Medicare & Agent Network - Medicare Advantage (MA) enrollment increased from 127,000 in 2021 to 167,000 in 2024, a CAGR of 11.0% [41]. - The number of producing agents increased from 4,230 in 2021 to 4,450 in 2024, a CAGR of 1.7% [47]. - The number of representatives/advisors increased from 650 in 2021 to 720 in 2024, a CAGR of 3.5% [48].

Financial Data and Key Metrics Changes - Second quarter revenue was $60.8 million, with a GAAP net loss of $17.4 million and adjusted EBITDA of negative $14.1 million [12][29] - The company ended the quarter with $105.2 million in cash, cash equivalents, and short-term marketable securities, reflecting strong collections from new Medicare enrollments [12][30] - Year-over-year decline in second quarter Medicare enrollments and related revenue was expected due to regulatory changes limiting dual eligible beneficiaries from switching plans outside main enrollment periods [12][30] Business Line Data and Key Metrics Changes - Medicare segment revenue was $58.1 million, a decrease of 2%, reflecting lower enrollment volumes offset by greater tail revenue [23] - Total Medicare submissions declined 18%, largely due to changes in dual eligible enrollment rules [23] - Medicare non-commission revenue was $5.8 million compared to $8.6 million last year, primarily due to the timing of sponsorship revenue [23] Market Data and Key Metrics Changes - The company anticipates that this year's Annual Enrollment Period (AEP) could be as disruptive and complex as last year's, with implications for beneficiaries and the business [9] - Medicare Advantage continues to enjoy strong bipartisan support in Congress, reflecting its critical role in delivering healthcare to approximately 35 million seniors [10] Company Strategy and Development Direction - The company is focused on greater scale, business diversification, and sustainable cash flow generation under the new CEO Derek Duke [6] - The company is expanding its focus on insurance products that can be sold year-round to mitigate elevated seasonality in Medicare enrollments [13] - The company is leveraging technology and AI to optimize capacity and improve customer experience [17][20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the upcoming AEP, emphasizing the need for greater visibility through interactions with key carrier partners [34] - The company expects to navigate challenges in the Medicare Advantage market, including potential benefit reductions and service area changes [48][50] - Management highlighted the importance of member retention and the effectiveness of strategic initiatives aimed at improving retention [24][18] Other Important Information - The company is updating its full-year 2025 revenue guidance to a range of $525 million to $565 million, reflecting outperformance to date [31] - The company expects operating cash flow to be in the range of negative $25 million to positive $10 million [31] Q&A Session Summary Question: Why is the company not incorporating the rates in its guidance? - Management indicated that they are awaiting greater visibility through interactions with key carrier partners before making adjustments to guidance [34][35] Question: How does the AI voice agent function in the customer service process? - The AI agent serves as a screening process to collect demographic information and route calls to licensed agents, improving call handling and reducing hold times [36][38][40] Question: What is the company's strategy regarding its capital structure? - Management emphasized the need for financial agility and plans to address the term loan maturing in February while improving access to capital [41][43] Question: How will expected benefit changes in Medicare Advantage impact market growth and churn? - Management anticipates a balanced growth approach by carriers, recognizing the need to replace lost members while managing benefit reductions [48][50] Question: What is the outlook for the ACA market and its impact on membership participation? - Management does not foresee ACA plans going away but expects potential disruptions in subsidization, which could affect enrollment dynamics [52][54][56]

Financial Data and Key Metrics Changes - CNO Financial Group reported operating earnings per diluted share of $0.87, benefiting from favorable insurance product margins and solid investment results [7][22] - Book value per diluted share, excluding AOCI, increased by 6% to $38.5 [8] - The company returned $117 million to shareholders in the quarter and $234 million year-to-date [8][22] - Operating return on equity was 11.8% to 12.1% on a trailing twelve-month basis, with a target of around 10.5% for the full year 2025 [23][29] Business Line Data and Key Metrics Changes - The Consumer division achieved record total new annualized premiums of $120 million, up 17%, with double-digit growth in both divisions [7][10] - Annuity collected premiums surpassed $500 million for the first time in a single quarter, driven by 19% growth [11] - Life and Health NAP posted double-digit growth of 17%, with total life insurance up 20% and direct-to-consumer life insurance sales up 29% [13][14] - Worksite life and health NAP increased by 16%, with life insurance sales up 54% [17][18] Market Data and Key Metrics Changes - Client assets in brokerage and advisory rose by 27% to $4.6 billion, with new accounts up 13% [12] - The market value of invested assets grew by 5% in the quarter, with 96% of the fixed maturity portfolio rated investment grade [28] Company Strategy and Development Direction - CNO aims to serve the growing needs of the middle-income market with diverse products and distribution channels [31] - The company is focused on improving return on equity and delivering consistent, repeatable results [31][32] - Investments in technology are enhancing customer experience and operational efficiency [17][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustained profitable growth and the ability to navigate the evolving economic environment [31][32] - The company anticipates continued strong sales momentum and improved profitability in the second half of the year [31] Other Important Information - CNO reaffirmed its 2025 guidance, lowering the upper bound of the expense ratio range to 19.2% from 19.4% [29] - The company is engaged in discussions with regulators regarding opportunities with its Bermuda operation [97][98] Q&A Session Summary Question: Can you provide more color on the momentum from the web digital piece of direct-to-consumer sales? - Management noted strong growth in direct-to-consumer sales, particularly from web and digital channels, which were up 39% year-over-year [36][37] Question: Can you discuss the expense experience in the quarter and the change in guidance? - Management indicated that expenses were generally in line with expectations, with a better expense ratio reflecting improved operating leverage [52] Question: What is the claims experience for long-term care? - Management reported a continuation of favorable claims experience, with expectations for LTC claims to trend closer to pre-COVID levels [54] Question: How diversified is the mix of carriers for Medicare Advantage? - Management confirmed a diversified mix of about 20 carriers, with no concentration risk, and expressed confidence in the demand for both Medicare Supplement and Medicare Advantage products [66][68] Question: What is the outlook for annuity sales and spreads? - Management indicated that while strong sales are expected to continue, comparable conditions may become tougher, and spreads have remained stable [70][73]