eHealth(EHTH) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total second quarter revenue was $65.9 million, a decline of 1% year-over-year, while excluding tail revenue, total revenue increased by 13% year-over-year [24] - The second quarter GAAP net loss was$ 28 million compared to a loss of $23.5 million a year ago, and adjusted EBITDA was negative$ 15.5 million compared to negative $14.8 million in Q2 of 2023 [32] - Operating cash flow was negative$ 32.2 million compared to negative $9.4 million in Q2 2023, primarily driven by higher payouts of previously accrued performance bonuses [32] Business Line Data and Key Metrics Changes - The Medicare segment generated$ 59.2 million in revenue, an increase of 7% compared to the second quarter of 2023, with Medicare revenue growing 16% year-over-year when excluding tail revenue [24][26] - The Medicare agency model delivered a 9% year-over-year growth in Medicare Advantage submissions, driven by strong performance in direct and affiliate marketing channels [16] - The Amplify platform generated $4.1 million in total revenue in Q2, contributing to a 37% year-over-year growth in non-commission or other revenue [17] Market Data and Key Metrics Changes - Total second quarter Medicare submissions grew 16%, including 17% growth for Medicare Advantage plans and a 25% growth for Med Supp [26] - The anticipated changes in Medicare plans could lead to significant market disruptions, with many plans discussing high single-digit to low double-digit member attrition [44] Company Strategy and Development Direction - The company is focused on enhancing its capital structure and preparing for the upcoming annual enrollment period (AEP) by training new advisers and rolling out new customer retention strategies [6][8] - eHealth aims to leverage its omnichannel choice model and trusted adviser position to capture strong consumer demand during the enrollment season [9] - The company is also enhancing user experience across its platform, including updates to planned comparison tools and the introduction of a video enrollment tool [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the upcoming AEP despite potential market disruptions due to political factors and regulatory changes [40][44] - The company is raising its guidance for Fiscal Year 2024, expecting total revenue to be in the range of$ 470 million to $495 million, reflecting strong performance and greater tail revenue year-to-date [35] Other Important Information - Fran Soistman announced plans to retire as CEO by or before the second quarter of 2025, emphasizing the importance of a smooth transition for the company [5][6] - John Stelben, the CFO, is also transitioning out, with John Dolan set to succeed him, ensuring continuity in financial leadership [22][37] Q&A Session Summary Question: How will the company adjust marketing budgets in light of political spending during AEP? - The company plans to shift marketing dollars to channels less affected by the national election, such as direct mail and SEO, while acknowledging the challenges posed by the election [39][40] Question: What is the expected churn for the 2025 AEP and how will the company gain market share? - Management highlighted retention as a key strategic priority and expressed confidence in their proactive measures to address potential churn while also seizing opportunities for growth due to market exits [44][45]