GoHealth(US:GOCO)2023-11-09 15:27Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $132 million, a 12% year-over-year growth compared to $118.3 million in Q3 2022, excluding Lookback Adjustments and Non-Encompass BPO Services [21][36] - Adjusted EBITDA improved nearly 20% year-over-year, with a loss of $11.5 million compared to a loss of $14.3 million in Q3 2022 [37] - Cash flow from operations was $6.5 million for Q3, with an expected adjustment bringing it to approximately $79 million [37][44] Business Line Data and Key Metrics Changes - Non-agency revenue increased by over 161% year-over-year, from $12.9 million in Q3 2022 to $33.5 million in Q3 2023 [24] - The number of submissions increased by 31% year-over-year, totaling over 161,000 submissions [36] Market Data and Key Metrics Changes - The Centers for Medicare and Medicaid Services (CMS) announced the 2024 Medicare Advantage star ratings, with half of the top 15 health plans improving or maintaining their ratings, while the other half saw declines [25] - Increased consumer shopping behavior was noted due to changes in benefit and health plan structures, as well as shifts in CMS ratings [25] Company Strategy and Development Direction - The company is focused on leveraging technology to enhance consumer experience and streamline the shopping process through its Encompass platform [22][23] - Strategic investments in technology are planned to address future growth opportunities and expand serviceable markets [5][6] - The company aims to shift a larger percentage of revenue towards non-agency lines as it continues to transition to the Encompass model [62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the importance of technology in providing a pressure-free shopping experience for consumers [53] - The company is committed to building long-term relationships with consumers and ensuring unbiased service [12][40] - Management reaffirmed full-year guidance, expecting total net revenue between $800 million and $850 million, and adjusted EBITDA of $120 million to $140 million [45] Other Important Information - The company has exited the Non-Encompass BPO Services business, with all revenue now related to its core business [36] - The Plan Fit checkup program has been launched, with nearly 5,000 checkups completed in Q3, aimed at enhancing consumer trust and satisfaction [27][122] Q&A Session Summary Question: Can you discuss your debt maturities and strategy around managing debt? - Management indicated that term debt is due in September 2025 and the revolver in September 2024, with plans to refinance both in early 2024 [58] Question: How should we think about the growth of agency versus non-agency revenue? - Management expects a shift towards non-agency revenue as a percentage of total sales, with more workflows moving through the Encompass platform [62] Question: How does increased pricing affect your commission rates? - Management clarified that changes in plan types do not affect the general reimbursement structure, and the focus remains on understanding consumer needs [85][92] Question: Can you elaborate on the outcomes of the Plan Fit checkups? - Management explained that the checkups can lead to three outcomes: recommending a new plan, the consumer choosing to stay with their current plan, or confirming they are on the best plan [113][117]