eHealth(US:EHTH)2024-11-06 17:22Financial Data and Key Metrics Changes - Third quarter revenue excluding net adjustment revenue was $57.2 million, a 9% year-over-year increase driven primarily by strong Medicare enrollments [44] - Including tail revenue, third quarter revenue was $58.4 million, reflecting a 10% decrease year-over-year [45] - Adjusted EBITDA excluding tail revenue was negative $36 million, an improvement of $4.3 million compared to Q3 a year ago [57] Business Line Data and Key Metrics Changes - Medicare segment revenue excluding tail revenue grew 13% year-over-year, while including tail revenue, it generated $53.2 million compared to $55.5 million in Q3 of 2023 [45] - Medicare Advantage submissions grew 26%, while Medicare supplement submitted applications grew 5% year-over-year [50] - Total acquisition costs per approved Medicare member improved 16% year-over-year [51] Market Data and Key Metrics Changes - The company experienced a 22% increase in total Medicare submitted applications, including Med Supp and prescription drug plans [35] - The Medicare supplement market is expected to gain greater adoption in areas where carriers have scaled back their MA benefits [36] Company Strategy and Development Direction - The company is focused on enhancing its capital structure and unlocking shareholder value while preparing for the annual enrollment period (AEP) [83] - A rebranding strategy and integrated marketing campaign titled "Your Medicare Matchmaker" were launched to improve customer engagement [17] - The company is diversifying its offerings by introducing a dedicated Medicare supplement sales team and expanding its carrier partnerships [38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to sustain momentum through the end of the year and into 2025, emphasizing a focus on achieving a successful AEP [82] - The company is well-positioned to take market share in an industry with decreasing competitive capacity, driven by a strong pipeline of appointments for new and existing members [16] Other Important Information - The company achieved HITRUST Certification, enhancing its credibility with carrier partners [32] - The company ended the quarter with $117.8 million in cash and cash equivalents, down from $160.6 million at the end of Q3 2023 [59] Q&A Session Summary Question: Can you quantify the larger pipeline early in the AEP and your ability to convert demand? - Management noted that the pipeline was significantly larger than last year due to proactive outreach efforts targeting beneficiaries affected by plan withdrawals and service area reductions [65][66] Question: How are advertising changes impacting the AEP? - Management indicated that political advertising did not hinder their messaging, and all channels are performing above expectations, leading to lower costs and higher conversion rates [70][73] Question: What is the outlook for tail revenues? - Management expressed confidence in the recent changes made to tail revenue constraints, indicating that they chose a conservative approach and have seen positive tail adjustments historically [76][78]